Most MSPs underprice backup — not because they're bad at math, but because they price against their wholesale storage cost instead of against what the service is worth. Customers aren't buying gigabytes. They're buying the guarantee that the worst day of their business year turns into a minor inconvenience. Price the guarantee.
The three pricing models
Per gigabyte
Simple to compute, terrible to sell. Per-GB pricing invites customers to compare you to raw cloud storage rates, makes bills unpredictable as data grows, and punishes you for the compression and deduplication your platform does well. Use per-GB only as an internal cost metric or for very large, storage-dominated accounts.
Per device
The workhorse. A flat monthly price per workstation and a higher one per server, each with a fair-use storage allowance. Customers can budget it, you can quote it in one sentence, and it maps cleanly to how businesses think about their own infrastructure. Most MSP backup catalogs should start here.
Per seat / per tenant
The right shape for SaaS workloads like Microsoft 365 backup, where "devices" don't exist. A per-user monthly price with all mailboxes, OneDrive, and SharePoint included is easy to attach to the per-seat licensing the customer already pays.
The margin math
Work an example against our wholesale rates: $6.95/TB storage, $3 per device, and per-workload add-ons. A typical 20-workstation, 2-server client with disk-image protection on both servers and compressed, deduplicated backups fitting in a terabyte costs you about $79/month wholesale (22 × $3 devices + 2 × $3 disk image + $6.95 storage). Price it at a market-normal $10 per workstation and $50 per server and the account bills $300/month — roughly 74% gross margin before your labor. Even after allocating an hour of monthly monitoring and restore time, backup outperforms most services on an MSP's line card. The leverage comes from the platform doing the operational work; see how the reseller model works.
Packaging rules that protect the margin
- Three tiers, not ten. Workstation, server, and M365 add-on covers 90% of demand.
- Bundle restores. "Unlimited restore assistance included" sells the outcome and justifies the price gap versus DIY storage.
- Include the storage allowance, sell overages calmly. A fair-use cap (e.g. 250 GB/workstation) with a small per-100GB overage keeps whales from eating the pool without scaring normal customers.
- Anchor to compliance where it applies. Healthcare and finance clients should be on a premium tier with retention, audit reports, and a BAA — see HIPAA-Compliant Backup for MSPs.
- Never itemize your wholesale cost. White label pricing only works if the customer can't see the seams (why that matters).
Mistakes that quietly kill backup revenue
- Grandfathering forever. Storage grows ~20%/year; reprice or re-tier annually.
- Charging for backup but not monitoring it. A failed job you didn't notice is a refund and a reputation event. Build the monitoring time into the price.
- Free trials of a trust product. Backup value shows up at restore time, which may be months away. Offer a paid first month with a restore drill instead — the drill demonstrates the value on day one.
- Competing with consumer products on price. You will lose to $5/month consumer tools on price and win on accountability. Sell accountability.
Put it on paper
Whatever you choose, write it down as a one-page rate card and hold to it. Ad-hoc backup pricing erodes into ad-hoc margins. If you're building your catalog from scratch, How to Start a Backup Business walks through the full launch sequence.