Backup Solutions
Disaster Recovery
Distributor cloud backup offerings
Distributor Cloud Backup Offerings: Secure EU Sovereignty and Predictable Margins
Unpredictable costs and compliance risks are squeezing margins for IT distributors. A new class of distributor cloud backup offerings provides a solution built on EU data sovereignty and a zero-egress fee model, creating sustainable partner profitability.
The topic briefly and concisely
Distributors can secure predictable margins by choosing cloud backup offerings with a zero-egress-fee model, eliminating the volatile costs associated with hyperscaler platforms.
EU-sovereign cloud storage ensures GDPR compliance and protection from the CLOUD Act, meeting a primary customer demand and reducing regulatory risk for the channel.
Partner-centric features like multi-tenant management, S3 Object Lock for ransomware protection, and full API automation are essential for scalable and secure distributor cloud backup offerings.
For UK and EU IT distributors, offering competitive cloud backup services has become a high-stakes balancing act. Navigating complex hyperscaler pricing, which includes variable egress and API call fees, erodes margins by up to 40%. Simultaneously, customers demand strict GDPR compliance and protection from threats like the CLOUD Act, a standard many non-EU providers cannot guarantee. This environment creates significant risk and financial uncertainty. A sovereign, partner-focused cloud storage model offers a clear path forward, enabling distributors to build profitable, compliant, and resilient cloud backup services. This approach transforms market challenges into a distinct competitive advantage for the entire channel.
Escape the Margin Squeeze of Traditional Cloud Models
Traditional distributor cloud backup offerings built on hyperscaler infrastructure present a significant financial challenge, with unpredictable egress fees consuming a large portion of revenue. Moving just 50TB of data can incur egress costs between $3,500 and $7,000, directly impacting profitability. This pricing model creates vendor lock-in, making it difficult for distributors and their MSP clients to migrate data without facing substantial financial penalties. A 2021 study revealed that profit margins on egress fees for some providers are estimated to be as high as 8000%. This economic barrier limits strategic flexibility and reduces negotiating power for the entire IT channel. The lack of cost transparency makes it nearly impossible for channel partners to forecast margins accurately, turning a core service offering into a financial liability. This uncertainty is compounded by regulatory demands for data sovereignty, which often require data replication across regions, further increasing egress costs by over 300% in some cases.
Additional useful links
German Data Protection Conference (DSK) presents a position paper outlining criteria for sovereign clouds.
Federal Statistical Office (Destatis) offers statistical data on cloud computing usage by enterprises in Germany.
Eurostat presents statistics on cloud computing usage by enterprises across Europe.
KPMG presents its Cloud Monitor 2025, offering insights and analysis on cloud adoption and trends.
European Data Protection Board (EDPB) reports on privacy recommendations for the use of cloud services by the public sector.
KPMG describes its cloud security services, focusing on protecting cloud environments from cyber threats.
Deloitte describes its cloud transformation services, focusing on helping businesses migrate to and optimize their use of the cloud.
FAQ
What is a sovereign cloud backup offering?
A sovereign cloud backup offering is a service where data is stored exclusively within a specific legal jurisdiction, such as the European Union. This ensures the data is subject only to EU laws like GDPR and is protected from foreign regulations like the U.S. CLOUD Act, guaranteeing data sovereignty.
How do zero egress fees create predictable margins for distributors?
Zero egress fees mean there are no charges for transferring data out of the cloud. Since data recovery is a core function of backup, this eliminates a major, unpredictable cost variable. Distributors can set prices for their backup services with confidence, knowing their margins will not be eroded by unexpected data transfer charges.
Is it complicated to migrate customers to a new cloud backup provider?
Migration is straightforward if the new provider offers full S3 API compatibility. Existing backup software (like Veeam, Acronis, etc.) can simply be pointed to the new storage endpoint. No changes to workflows or scripts are needed, minimizing downtime and technical effort.
What tools are provided for managing multiple end-customers?
A partner-ready platform provides a multi-tenant console that allows distributors and MSPs to manage all their clients from a single dashboard. This includes features like role-based access control (RBAC), centralized billing reports, and API access for automating client provisioning and management.
How does geofencing enhance a cloud backup offering?
Geofencing allows data to be restricted to a specific country or region, such as Germany or the UK, within the EU. This provides an extra layer of compliance for customers in regulated industries like finance or healthcare, who may have specific data residency requirements beyond general GDPR rules.
What is the 'Always-Hot' storage model?
The 'Always-Hot' storage model ensures all data is immediately accessible at all times, with no delays or extra fees for retrieval. This contrasts with tiered models (hot, cool, archive) where retrieving data from cheaper tiers can take hours and incur significant costs, complicating and slowing down disaster recovery.
