Top 10 BDR and Cloud Backup Predictions for 2017

As we continue our technology predictions for 2017, here's a look at 10 cloud backup and BDR( backup and disaster recovery) trends and milestones that we expect to unfold. Plus, how the trends will potentially impact VARs, MSPs and emerging cloud solutions providers.

10. Private Equity Rollups Will Continue: Instead of acquiring PSA (professional services automation) and RMM (remote monitoring and management) software businesses, PE firms will turn their attention to the storage market -- buying growth-oriented BDR companies that weren't growing quite quickly enough to generate IPOs or more venture backing.

9. Enterprise Capabilities Extend Into SMB: Companies like Carbonite, StorageCraft and Veeam will continue to balance enterprise and mid-market capabilities with SMB partner needs. A prime example: Veeam pioneered virtualization backup. Next up: Niche demand for container- and Docker-centric backup -- though that won't trickle down into SMB anytime soon.

8. eFolder May Pivot Like Autotask (Circa 2010): Anybody else remember when Autotask in 2010 named a new CEO, stopped trying to emulate ConnectWise's MSP user groups, and instead focused on areas of potential differentiation? At the time, Autotask's big shift involved localizing its PSA software and pushing into multiple international markets. A similar scenario will unfold at eFolder, I believe. Instead of competing head-on against Datto's MSP community, I suspect eFolder CEO Kevin Hoffman will focus more on traditional channel management -- with more channel team members reporting into a growing Denver headquarters, while also continuing to leverage distributor relationships. The person to watch: VP of Worldwide Sales Francois Daumard.

7. Datto Will Consider the IPO Waters: I'm not saying Datto will officially launch an IPO. But look at the company's business timeline. Under CEO Austin McChord, Datto raised $25 million in Series A financing in 2013, and $75 million in Series B financing in 2015. Is a Series C raise coming in 2017? Not necessarily. After all, I believe Datto is profitable or at least cash flow positive. I don't think the company "needs" to raise money through a Series C or an IPO. Still, current investors will want to take some of their dollars off the table at some point. Is 2017 the year? Hmmm... Another big wildcard: Can the company branch out beyond BDR to profit from unified threat management (UTM)? Indeed, a UTM appliance launch is expected in January 2017. And a new revenue stream could attract plenty of attention...

6. Security and BDR Will Converge (Even More): Companies like Barracuda Networks, Continuum and Datto will blur the lines between their BDR and security services. MSPs, in turn, will promote total business protection systems. The efforts will involve Barracuda's Intronis MSP Solutions business; Continuum Continuity247 married to a forthcoming Security Operations Center (SOC); and Datto's UTM appliance launch. PS: We'll see a similar blurring between RMM vendors that own their own BDR platforms. Namely, new blended offerings from...

5. Ransomware Will Lock Up A Backup System: Yes, backup platforms allow MSPs and customers to escape from ransomware nightmares. But at some point, hackers will turn the tables on BDR providers and their customers. We'll see somebody's backup systems completely locked up by ransomware -- forcing a new round of innovation from the BDR providers.

4. BDR Entrepreneurs Will Play An Encore: In particular, watch for former Carbonite CEO David Friend to make his next move...

3. BDR Meets Software-Defined Storage, Blockchain: The poster-child for those efforts is Acronis. Not sure how Blockchain potentially helps channel partners and their customers? Check out this Blockchain primer from IBM.

2. Platform as a Service (PaaS) Pitch: The Microsoft Azure and Amazon Web Services teams will increasingly pitch DRaaS (disaster recovery as a service) as part of their PaaS portfolios. However, relationship-driven MSPs will largely remain loyal to the major SMB-focused BDR providers.

1. FBI, NSA Will Come Calling: At some point, BDR encryption will face the same privacy challenges of iPhone encryption. The feds will come calling, demanding that a BDR vendor decrypt customers' backup information -- only to discover that the customers hold the keys. Still, the government will press hard to have backup companies implement back doors into their systems...

BONUS. Compliance Gets Extra Complex: Instead of coming together, the world gets more fragmented. President Trump will attempt to unwind regulations and push for enhanced NSA surveillance. Britain will figure out details of their Brexit. Additional members of the European Union will consider going solo. The result: MSPs and BDR customers will need to more carefully monitor and manage data, especially information that potentially travels across borders.

Note: ChannelE2E is running 2017 technology predictions throughout the month of December 2016. Submit predictions for consideration to [email protected]. Read all daily predictions here.