How to price BCDR as an MSP (with worked examples)

TL;DR

Three BCDR pricing models work in the Italian market: per VM (€12-25/month per VM), per protected GB (€0.15-0.40/GB), per workload (€8-30/month per workload). Target gross margin is 45-55%. Below 40% you work for free. The best model is hybrid.

The three surviving models

Per VM

Most common. Fixed fee per protected virtual machine. Typical: €12-25/month for warm standby with 10-min RTO, up to €40/month for hot standby.

Pros: predictable, simple to bill. Cons: penalises small VMs, rewards large ones.

Per protected GB

Good for file servers and archives. Typical €0.15-0.40/GB/month depending on SLA and redundancy.

Pros: scales with data, fair across heterogeneous workloads. Cons: customers cannot estimate the final cost, frequent disputes.

Per workload

Microsoft 365, ERP, file server, each with its own price. Transparent for customers, complex to bill.

Pros: speaks the customer's language ("protect my Office 365"), high perceived value. Cons: scales poorly above 5-6 distinct workloads.

Real margins on managed DR

In a competitive Italian market:

• Low-tier DR (managed backup): gross margin 35-50%.
• Mid-tier DR (warm standby): gross margin 45-55%.
• High-tier DR (premium DRaaS): gross margin 55-65%.

Below 40%, after onboarding and support, net margin goes negative.

Mistake #1 that burns the P&L

Selling promised RTOs without proportional pricing. Promising "5-minute RTO" on a €30/month plan means accepting four hours of unbilled emergency handling on the first event.

Rule: pricing must cover the "worst-case cost" averaged over 3 years.

A typical numerical example

Average Italian MSP customer:

• 12 VMs, 4 TB data, 2 special workloads (M365 + ERP);
• target fee: €700/month;
• vendor + cloud cost: €280/month;
• support and management: €120/month (0.2 FTE);
• gross margin: €300/month (43%).

A reasonable starting point to optimise toward 50%.

Three margin levers

1. automate onboarding (template runbooks, multi-tenant console, APIs);
2. bundle DR + monitoring: raises average ticket by 30-40% without proportional cost;
3. select customers: refuse those with unique processes impossible to automate.

FAQ

Is a pay-per-restore model worth it?

Looks cheap to the customer, is a bomb for you: at disaster time the bill spikes and the customer disputes. Charge a fee.

Should I bill the quarterly drill separately?

No. The drill must be included. Billing it separately protects you accounting-wise but destroys the customer relationship at the first "no, thanks, next time".

How much onboarding to bill?

€500-1,500 one-off for standard plans. For complex onboarding, €3-5k.

For team structure, DR + monitoring bundle. For margin, MSP margin on DR.