MSP margin on DR: real numbers, not brochure numbers

TL;DR

Typical Italian managed DR gross margins: 45-55% mid-tier, 55-65% premium. Below 40% you do not work, you bill. Three levers bring you back above 50% without raising prices: automation, bundling, customer selection.

Expected numbers

With a typical mix of 30 mid-tier BCDR customers, annual revenue ~€220k:

• vendor + cloud cost: ~€90k (40% of revenue);
• dedicated headcount: ~€60k (27%);
• indirect cost (admin, training, insurance): ~€20k (9%);
• gross margin: ~€50k (23%) year 1.

Steady state (year 3, onboarding amortised): margin ~€70k (32%).

The 5 factors that erode margin

1. Too manual onboarding: each new customer costs 25-40 hours.
2. Bad drills repeated: every failed drill = 4-8 extra hours.
3. Unbilled out-of-SLA support: customer pays €700/month and calls 12 times.
4. Vendor pricing not passed to the customer: increases swallowed to keep the customer.
5. High churn: customers lost before 18 months do not amortise onboarding.

The 3 margin levers

1. Automation

Multi-tenant console + APIs + runbook templates cut onboarding cost by 50-70%. Sefthy has native APIs for tenant creation and policy management.

2. DR + monitoring bundle

Raises average ticket by 20-30% without proportional cost increase. Monitoring uses the same DR infrastructure.

3. Customer selection

Refuse customers with unique, non-automatable processes. Five standard customers beat three "special" customers.

Strategic pivots for margin

• raise prices by 1%: in BCDR customers rarely switch vendor for 1%. Goes to full margin.
• renegotiate with the vendor: above 30 customers you have leverage.
• sell ISO 27001 as an upsell: ISO customers are higher-ticket customers.

FAQ

How soon does target margin show up?

Year 1: 20-25%. Year 2: 28-33%. Steady state year 3: 32-40%.

When do I need to hire?

Above 50 customers, yes. Between 30 and 50 it depends on average complexity.

For pricing, BCDR pricing for MSPs. For bundling, DR + monitoring bundle.