Idrive CEO Promises Bigger Channel Reach With Object Storage
Joseph F. Kovar
‘We wanted a new reseller plan customized for e2 object storage. And that’s what we are launching. And we are making it very easy for resellers to buy storage and then slice it and dice it up and resell it to their customers with the right privacy and security requirements that they may have,’ says iDrive CEO Raghu Kulkarni.
Reaching Out To The Storage Channel
The storage industry is full of cloud storage providers, big and small, each trying to carve out its niche in a market characterized by commoditized offerings and ever lower prices. It features an eclectic mix of mature companies and hot startups, with some focused on providing just the raw storage while others offer a range of various services including storage-related services such as data backups and archiving, as well as some non-storage-related services.
One of those vendors is Idrive, a Calabasas, Calif.-based company founded nearly 30 years ago as a provider of raw storage capacity along with data protection. Idrive, which also offers a remote PC access technology called simply RemotePC, this spring started offering raw cloud storage compatible with the ubiquitous Amazon Web Services S3 object storage protocol.
While Idrive has grown primarily by offering its technology direct to end users, the company has a small but growing indirect channel partner base. And with the introduction of its S3-compatible object storage service, that indirect focus is growing, said CEO Raghu Kulkarni.
To make that happen, Idrive recently introduced a formal channel program specifically for its Idrive e2-branded AWS S3-compatible cloud storage. The program includes a bulk reseller plan for channel partners who can purchase capacity in bulk and then “slice and dice” that capacity as needed to provision end-user accounts using the company’s APIs or via a browser, Kulkarni told CRN.
‘[Partners] can manage the storage for their users with full control of the privacy and security,” he said. “They can let end users have all the security controls, or they can manage the whole thing for their end users for ease of use. So they can choose whichever approach they want based on their use cases.”
While Idrive e2 object storage, like all Idrive products, is available direct to consumers, Kulkarni said the company is incenting partners to bring it to their customers as part of their services bundles.
“[Partners] provide not just plain S3-compatible storage, they have applications like Veeam or Veritas or others that work with S3-compatible storage behind the scenes,” he said. “When they provide a service to the customers, it’s usually a bundled service. And they can have their margins on top of what they pay us in a substantial way. So it’s really up to the resellers to create the solution.”
Here is a look at the opportunities of working with a cloud storage provider like Idrive
Define IDrive. What does your company do?
IDrive is a cloud backup company. It is one of the premier cloud backup companies for consumers and small businesses, and for midsized companies as well. We have evolved also into remote access with a product called RemotePC. RemotePC is a leading remote access product to connect to PCs, Macs, servers and even Android devices from anywhere. It was a hit product during the whole work-from-home time of the last two years, and it still is. So it’s a good complement to the cloud backup that we offer.
You mentioned small and midsize business as well as consumer. Is the consumer business done direct or via indirect channels?
The consumer business, I would say most of it is direct, although some of it is through the MSPs and resellers. I would say roughly about 80 percent is direct and 20 percent is through our reseller network. [Our SMB business] is a little bit more skewed towards resellers, maybe 70 percent direct and 30 percent indirect.
Why is such a small part of that business indirect? Given the work needed on the business side to do backup and recovery properly, wouldn’t it be a better fit for the channel?
These are fairly easy products. We focus on ease of use. Most of our customers don’t need much help signing up. They can just sign up online and start backing up. With one click, you can back up your PC or Mac. Once you sign up, just download the executable, and it automatically backs up the things you want to be backed up. So for example, for your computer, it will back up your desktop, your pictures, videos, all the Office documents. It pre-selects all those things so you don’t need to do anything. You can customize it if you want. But there is not a whole lot that you need to do. You don’t need hand-holding. It’s very efficient and very easy to use. And same with RemotePC. All these products are so easy to use. We have 24/7 support, but most users don’t need support.
So what’s new at Idrive?
New from Idrive is a product called Idrive e2, which is S3-compatible storage that we launched back in April. It competes with the likes of Wasabi or Backblaze B2 or Digital Ocean and others. We manage over 500 petabytes of storage so we have experience of managing large amounts of distributed storage. That’s where this DNA came from. We thought we could offer generic storage, not just for backup. We can also create a service to address the needs of businesses who want S3-compatible storage because that’s the de facto standard for object storage now.
So we launched Idrive e2 to address the needs of developers and businesses who need S3-compatible storage. At launch, we had eight locations in all within the USA. And a few months later, we added five more locations in Europe. So we have a total of 13 locations now between the U.S. and Europe just within a span of six months. And it performs really well. It performs equal to or better than Wasabi and Backblaze and most of the other third-party providers of S3 compatible storage. And it’s at a price point that is better than anybody else. It’s at $0.004 per gigabyte per month. It’s about 20 percent better than Backblaze, and about 30 percent better than Wasabi, and 90 percent better than Amazon S3 in terms of pricing. And this we are able to achieve through economies of scale that we have built up over the years, and a unique combination of software and hardware that that we have created with our experience in handling large amounts of cloud storage. And it has been doing really well. We have been seeing a lot of interest from businesses of all sizes. We have many resellers who are approaching us, and in fact they’re demanding we let them resell this product. And so we’re launching a reseller plan now.
Is this your first formal reseller plan?
We have a fairly large network of resellers. As I said, 20 [percent] to 30 percent of our Idrive and RemotePC sales are through our reseller network. But there is a separate network for e2. The use cases are different. So we wanted a new reseller plan customized for e2 object storage. And that’s what we are launching. And we are making it very easy for resellers to buy storage and then slice it and dice it up and then resell it to their customers with the right privacy and security requirements that they may have. They can do this whole thing through the web interface, or they have APIs to manage all this provisioning process.
Are you selling just the raw storage to customers? Or are you also selling the data protection part as well?
We do offer data protection. But for this specific e2 service, it’s just raw S3-compatible storage. We try to provide it in the most efficient, most cost-effective way.
One of your competitors, Wasabi, likes to talk about being one-fifth the cost of AWS, and about how it has technology partnerships with practically every data protection vendor to make it easier for partners to connect the Wasabi raw storage with companies like Commvault and Nutanix, for instance. How do you compare?
I would say Wasabi is our No. 1 competitor. … As far as pricing is concerned, we are about 30 percent cheaper than Wasabi. And our performance is also at least as good as Wasabi’s. And in terms of technology partnerships, we are new in the game. Wasabi started many years ago. But in a very short span, we have already established some partnerships. One of them is Veeam. We have an ongoing discussion right now to become an official partner, but we are listed in the unofficial list of compatible services. So you could use Idrive e2 exactly the same way that you can use Wasabi with Veeam, for example. It’s the same case with almost every other technology partner that Wasabi has.
Veeam is one of the key products that we are compatible with. And Microsoft 365, which is actually a Veeam product to back up Microsoft 365. There is MSP360, which is S3-compatible and also works with Idrive e2, QNAP and Synology are hardware NAS providers which are e2-compatible. Cyberduck and Duplicati are S3 clients for different purposes and Idrive e2-compatible. [There are many more.] And we do have some partnerships with some companies like ExpanDrive where we are directly integrated into their product so there’s no configuration needed.
What’s different with the partner program between the e2 S3-compatible product versus your traditional products?
With a traditional partner program, we have two options. One is a referral program, where partners get 25 percent of the qualifying revenue for the life of the account. And we have a bulk reseller system, where they can buy storage, like 10 terabytes or 50 terabytes, and then can slice and dice and have the users back up to those smaller pieces. So this is what we have for the regular Idrive. And for the Idrive e2, it is closer to that bulk reseller concept, where they can buy the storage in bulk, and then provision those accounts for their end users, either through an API automated through scripting, or through a manual process through the browser application. They can manage the storage for their users with full control of the privacy and security. They can let end users have all the security controls, or they can manage the whole thing for their end users for ease of use. So they can choose whichever approach they want, based on their use cases. We normally offer a very big first-year discount as well.
Given that only about 30 percent of your business is through indirect channels, why would a reseller want to work with you given that you also are working with end-user customers, possibly some end- user customers that they might want to work with?
We bring a lot of things to the table which others don’t. Pricing is one aspect. Performance is another aspect. And number of locations is another aspect. And even this whole integration is so easy to use. With APIs, you can provision accounts on the flight scripted. I’m not sure if our competitors have this provisioning feature where you can automate it. So we are trying to provide as many incentives as possible to the resellers to use e2.
But those also sound like incentives for the end users to work with you directly, such as ease of use.
We don’t want to miss either one of these categories. So we make it so easy for the resellers because sometimes the users don’t really want to get into the whole aspect of management. They want to subcontract it to the MSP. So in this case, the reseller plan is the right fit. In cases where users directly want to work with us, we have that too. And both are attractive options in comparison to our competitors, I think.
And the core thing is the product. The product is substantially better, and it’s getting better every day. For example, if you go back to the cloud backup, we beat Carbonite in literally every review, honest comparison reviews. ... And we want to replicate that with e2 as well. [We can] show that this is a better product than Wasabi or Backblaze B2.
What type of solution providers do you work with? Primarily MSPs?
It’s definitely a lot of MSPs. We do get some resellers, as well. We are seeing definitely a lot more MSPs coming towards this product, but we’re seeing interest from resellers as well. So this is why we decided to go ahead and launch this program.
What are you doing to try to bring more MSPs and solution providers to your channel program? How are you incenting them?
I’m actually on a lot of phone calls from MSPs or resellers. And they’re essentially looking to cut costs, especially with where the economy is going these days. And when they’re able to cut some costs, they’re able to increase their revenue a little bit as well. So everyone seems to be doing that. We don’t charge for egress, so that’s a big differentiator between us and say, Backblaze B2. And so those are the conversations that we’re having. And the first year discount is a very big incentive. That reduces the overall cost if you spread it over the next three or four years. The first year discount is huge. It accounts for the whole migration cost because users typically already have a service from another provider, and for them to migrate over there is an extra. The first year discount helps make the whole process as painless as possible.
How can channel partners make money on this other than the sales revenue? What services can solution providers offer around this to make more money?
Partners usually have a bundled service. So they provide not just plain S3-compatible storage, they have applications like Veeam or Veritas or others that work with S3-compatible storage behind the scenes. When they provide a service to the customers, it’s usually a bundled service. And they can have their margins on top of what they pay us in a substantial way. So it’s really up to the resellers to create the solution. And as we mentioned earlier, we try to bring the most cost-effective, best-performing solution to them. So users don’t feel deficient in any way just because they got lower price. We are not compromising on the performance aspect here. Usually when you go for something cheaper, it has some catch like a performance hit. Here, there is no performance hit. You get top-of-the-line performance, and at a location near you. And with a company that has been around for 20 years and is a leading provider of cloud backup. So you have all these things working for you.