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Disaster Recovery for MSPs: The Critical Advantage Small Businesses Need

Table of contents

Executive Summary

Large corporations have dedicated IT teams, automated backups, and comprehensive disaster recovery plans. Small businesses typically operate day-to-day, often with backup on a portable drive that nobody has ever tested. With 91.7% engagement levels for disaster recovery planning among MSPs, this disparity represents both a critical vulnerability and a massive market opportunity for Managed Service Providers.

Why Small Businesses Fail at IT Disasters

There’s an old saying: “Before the fat man loses weight, the thin man will have died.” Usually referring to economics and competition, it perfectly fits the IT world, especially when discussing the differences between large corporations and small businesses in responding to outages and cyber threats.

Large companies have everything: extensive IT infrastructure, automated backups, detailed emergency procedures, and often even backup data centers. Add to this a team of backup and security experts. When something serious happens—system failure, cyberattack, even ransomware—such companies will suffer losses, but they won’t disappear from the market. They have time and resources to “go on a diet,” survive the difficult period, and return to form.

Small businesses live differently. They operate quickly, often on the edge of profitability, without large cash reserves or technology buffers. Backup? Sometimes it exists. Sometimes on a USB drive, sometimes in the cloud. But does it work? Nobody has ever checked. Emergency plan? Few owners have had time to think about it. Moreover, most assume that all disasters will pass them by, and cybercriminals only target “big fish.”

The Alarming Reality: Market Statistics

The statistics paint a sobering picture of small business vulnerability:

  • 43% of cyber attacks target small businesses, yet only 14% are prepared to defend themselves
  • 60% of small businesses shut down within six months of a cyberattack
  • 82% of ransomware attacks in 2021 were against companies with fewer than 1,000 employees
  • The global cost of cybercrime is projected to reach $10.5 trillion annually by 2025

In many small companies, IT is handled by the so-called “golden hands” person or jack-of-all-trades. They order toner cartridges, fix the printer, buy light bulbs for the kitchen and… occasionally make a backup copy.

Meanwhile, for cybercriminals, a small company is an easy target. And it’s precisely these companies that most often fall victim to ransomware attacks because they don’t have the resources, people, or procedures to defend themselves effectively. After an attack? There’s no talk of “slimming down.” In many cases, there’s nothing left to save. The company disappears from the market, sometimes after months, sometimes overnight.

This is the reality faced by thousands of small businesses today. According to the National Cyber Security Alliance, 60% of small firms close within 6 months after a major data loss.

Case Study: The Human Cost of Poor Preparedness

In late July, the BBC reported the collapse of KNP Logistics. In a publication with the telling title “Weak password allowed hackers to sink 158-year-old company,” it shows the human aspect of incidents. One employee used such a weak password that attackers from the Akira gang managed to crack it. As a result, they encrypted the victim’s data, demanding a ransom of £5 million for decryption. This was an amount exceeding KNP Logistics’ financial capabilities. Everything indicates the company had no backups or they couldn’t be restored. Ultimately, they had to cease operations.

KNP Director Paul Abbott didn’t tell the employee that cybercriminals exploited his account. “Would you want to know it was you?” Paul Abbott asked rhetorically.

Similar incidents happen daily in every corner of the world. However, media reports focus on attacks against large corporations because they generate reader interest. Nobody cares about smaller ones, unless they’ve been operating for 158 years.

The Invisible Assets Problem

Small businesses spend tens of thousands monthly on car leasing, maintain regular inspections and insurance, but forget that company data—contracts, invoices, customer documentation—are far more valuable than a new BMW X5. The problem is that the car is visible. You can show it off, but also easily assess the loss in case of damage. Data, however, remains invisible. As long as everything works, nobody considers that losing it could cost them their job. When a car breaks down, you can always call a tow truck. But what do you do when data crashes?

MSP Market Opportunity: The Numbers Don’t Lie

The disaster recovery market presents enormous opportunities for MSPs:

  • The global DRaaS market was valued at $8.5 billion in 2023 and is expected to reach $70.8 billion by 2032, with a CAGR of 26.57%
  • The MSP market is expected to reach almost $350 billion globally by 2024 and soar to over $1 trillion by 2033
  • Nearly 55% of MSPs provide disaster recovery planning solutions
  • The U.S. managed services market is expected to generate $10.60 billion in revenue by 2025

Contrary to popular belief, small and medium enterprises regularly fall victim to cyberattacks, particularly devastating ransomware. According to Datto’s report, 13% of small and medium companies experienced multiple such attacks in 2023. This might seem small, but hoping a company will avoid such threats is naivety that can be costly. Besides, attacks aren’t just ransomware. Attackers have a much richer arsenal of tools.

Beyond Ransomware: The Full Threat Landscape

A dramatic example is the story of Code Spaces—a hosting company that ceased to exist due to a cyberattack. It all started with a DDoS attack, but that was just the beginning. Criminals took control of the AWS account and demanded ransom. When owners tried to regain infrastructure control, attackers deleted everything—customer data, backups, virtual machines, configurations.

External attacks aren’t always necessary to paralyze a small company’s operations. Sometimes human error or internal sabotage suffices—a disgruntled, departing employee might delete a crucial database in a fit of anger. Downtime also results from ordinary failures: power outages, internet access interruptions, equipment damage, or wiring problems.

Fires are becoming an increasingly common threat, especially in smaller production facilities and retail outlets. A local fire can cause long operational interruptions, inventory loss, data loss, and even complete technical infrastructure destruction.

Disaster Recovery: Not as Scary as It Seems

Many small business owners, when asked about disaster recovery plans, will answer they of course have one—after all, they do backups. However, these are completely different things. Small companies often confuse these concepts or don’t understand the full scope of activities. When they think about protection, they usually focus on data that can be lost through accidental deletion, disk damage, or cyberattack. Implementing backup software seems simpler than developing a comprehensive DR plan.

Backup allows restoring individual files, databases, or other elements to a previous state. DR, however, is the rapid restoration of entire IT infrastructure after serious failure, natural disaster, or cyberattack. It’s about ensuring business continuity and minimizing downtime. At first glance, developing DR for a small business might seem an impossible mission. But fear has big eyes—it’s not as complicated as it seems.

Technical Deep Dive: RTO and RPO Fundamentals for MSPs

For MSPs designing DR solutions, understanding Recovery Time Objective (RTO) and Recovery Point Objective (RPO) is crucial:

  • RTO (Recovery Time Objective): The maximum acceptable time to restore business operations after a disaster. For e-commerce sites during Black Friday, this might be minutes. For a local accounting firm, it might be hours.
  • RPO (Recovery Point Objective): The maximum acceptable amount of data loss measured in time. A financial services firm might require an RPO of seconds, while a small manufacturing company might accept hours.

Industry-Specific DR Requirements

DR plans for small and medium companies are significantly simpler than corporate solutions because they have smaller amounts of data, software, and hardware. Regardless of organization size, the first step remains the same: comprehensive risk assessment. This process reveals potential threats to IT infrastructure, detects security gaps, and identifies single points of failure that could paralyze entire operations.

E-commerce: For online stores, continuous availability is most important. Every outage hurts, but its cost depends on downtime duration and timing. Server failure during Black Friday or pre-holiday shopping frenzy? That could mean financial catastrophe. In e-commerce, every minute of downtime during peak sales costs more than the entire annual IT budget.

The plan must distinguish critical periods—during Black Friday, Cyber Monday, or pre-holiday promotions, downtime tolerance is zero. What does this mean in practice? Enhanced monitoring and 24/7 support teams during peak periods. RTO must be a maximum of several minutes, not hours. This requires automatic failover to backup servers. Crisis communication doesn’t need to be complicated. A simple banner on the site suffices: “Our store is temporarily unavailable due to technical issues. We’re working on quick restoration.” Plus contact link and active social media updates.Regular load testing before each season is fundamental—simulate real traffic and check if systems can handle the peak.

Manufacturing: Local print shops need completely different plans than accounting offices or graphic studios. But the basics remain the same.

Advanced Technical Considerations for MSPs

  • Virtualization and Containerization: Modern DR solutions for small businesses should leverage virtualization technologies. VMware vSphere, Hyper-V, or KVM allow for rapid VM replication and failover. For more advanced setups, container orchestration platforms like Kubernetes can provide automated disaster recovery capabilities.
  • Network Segmentation: Implement proper network segmentation to contain potential breaches. Use VLANs to separate critical systems from general office networks. Consider software-defined perimeter (SDP) solutions for enhanced security.
  • Immutable Backups: Implement the 3-2-1-1 backup rule: 3 copies of data, on 2 different media types, with 1 offsite copy, and 1 immutable copy. Technologies like AWS S3 Object Lock or Azure Immutable Blob Storage prevent ransomware from corrupting backups.

DR plans aren’t just about securing files, databases, and applications. Equally important is hardware protection. One or two servers ready for immediate deployment can save the situation. Remember to ensure emergency backup power through UPS systems, protecting against power supply interruptions.

Companies that don’t believe in their own competencies or lack resources for DR implementation have an alternative: Disaster Recovery as a Service (DRaaS). This solution transfers DR responsibility to specialists.

Disaster Recovery as a Service for Small and Medium Businesses

Monday morning, 8:00 AM. The server just crashed, and all customer data disappeared with it. Panic? Not necessarily—if the company uses Disaster Recovery as a Service (DRaaS). This service gives small and medium companies access to advanced technologies without gigantic investments. No expensive servers, no specialized backup software. Just predictable monthly payments and automation that eliminates human errors.

The MSP Advantage in DRaaS Delivery

According to The Business Research Company, the DRaaS market is projected to expand from $11.99 billion in 2024 to $15.14 billion in 2025, reflecting a CAGR of 26.2%. This growth is driven by several factors that MSPs are uniquely positioned to capitalize on:

  • 24/7 Expert Support: DRaaS’s greatest strength is round-the-clock specialist teams. Hiring such an expert would cost a small company a fortune, but through the service, they gain access to an entire team of experienced professionals. It’s like having your own IT department working 24 hours daily.
  • Automated Recovery: About 85% of executives and technicians assert that automation is a must-have for MSPs. Modern DRaaS solutions provide automated failover, continuous data protection (CDP), and AI-driven threat detection.
  • Scalability and Flexibility: Cloud-based DR solutions can scale resources up or down based on business needs. This is particularly valuable for seasonal businesses or those experiencing rapid growth.

Technical Architecture: Building Robust DRaaS Solutions

  • Hybrid Cloud Approach: 72% of organizations use a hybrid cloud environment. MSPs should design DRaaS solutions that work across on-premises, private, and public cloud environments.
  • Replication Technologies: Implement both synchronous and asynchronous replication depending on RPO requirements. Technologies like VMware vSphere Replication, Hyper-V Replica, or Zerto provide comprehensive replication capabilities.
  • Orchestration and Automation: Use tools like VMware Site Recovery Manager, Azure Site Recovery, or AWS Disaster Recovery to automate failover processes and reduce recovery times.

DRaaS has its dark sides. One is dependency on external providers—their problems become client problems. Sometimes the weak link is the Internet. Poor connection means slow data recovery. Instead of several minutes, you might wait hours, and every minute of downtime is lost money. Many doubts arise about entrusting critical information to strangers, which may violate industry regulations and cause customer concern.

When DRaaS Isn’t Enough: Physical Infrastructure Challenges

DRaaS doesn’t always save the day. If a CNC machine fails in a small manufacturing company, the production line breaks, or PLC controllers burn out, no data recovery will help. This isn’t an IT problem—it’s physical failure requiring specific repair. In such cases, hardware redundancy matters, not the cloud. Spare controller, additional disk, backup industrial computer—these investments might prove more valuable than the most expensive DRaaS service.

Advanced MSP Technical Strategies

  • Edge Computing Integration

Enhanced resilience through edge computing is one of the key factors driving DRaaS growth. MSPs should consider deploying edge computing nodes for:

  • Local Data Processing: Reduce latency and bandwidth requirements
  • Distributed Backup: Store critical data copies at edge locations
  • Autonomous Recovery: Enable local systems to operate independently during WAN outages

  • AI and Machine Learning Integration

According to “The MSP Horizons Report 2024,” over 75% of MSPs already use Generative AI in some way in their offerings or processes. AI can enhance DR solutions through:

  • Predictive Analytics: Identify potential failures before they occur
  • Automated Threat Detection: Recognize unusual patterns that might indicate attacks
  • Intelligent Recovery Orchestration: Optimize recovery sequences based on business priorities

  • Multi-Cloud Strategies

Microsoft Azure has the highest usage, with Amazon Web Services (AWS) a close second and Google Cloud Platform (GCP) coming in third. MSPs should design multi-cloud DR strategies to:

  • Avoid Vendor Lock-in: Distribute risk across multiple cloud providers
  • Geographic Redundancy: Leverage different regions and availability zones
  • Cost Optimization: Use different clouds for different workloads based on pricing

  • Security-First DR Design

34.7% of MSPs say cybersecurity will shape the future of DRaaS. Security considerations for DR include:

  • Zero-Trust Architecture: Implement zero-trust principles in DR environments
  • Encrypted Data Transit: Ensure all replication traffic is encrypted
  • Air-Gapped Backups: Maintain offline copies for ultimate ransomware protection
  • Regular Security Testing: Conduct penetration testing on DR environments

Build DR solution with Storware

As you can see, small and medium businesses face the same cyber threats and system failures as enterprise organizations, but often lack the resources to implement comprehensive disaster recovery solutions. This is where Managed Service Providers (MSPs) become invaluable partners, and Storware’s specialized offerings provide the perfect foundation for MSPs to deliver enterprise-grade disaster recovery capabilities to their SMB clients.

Storware gives you the tools you need to provide top-tier data protection for your clients, all while increasing your efficiency and profitability. Here’s how:

  • Customizable and Cost-Effective: The solution is built on OpenStack, providing a flexible and scalable foundation that helps you keep costs down.
  • Easy Multi-Client Management: A single, centralized console lets you manage backups and disaster recovery for all your clients from one place.
  • Brand Growth: Use the white-labeling feature to offer these services under your own brand, building trust and strengthening your client relationships.
  • Broader Client Reach: With support for a wide range of platforms, you can serve a more diverse set of clients and their unique IT environments.
  • Simple Billing: Get granular control over resources and bill clients transparently based on their actual usage.

Storware’s scalable backup and recovery platform enables MSPs to cost-effectively protect their clients’ critical data and applications while maintaining the flexibility to customize solutions based on each business’s unique needs and budget constraints. By leveraging Storware’s robust technology stack, MSPs can offer their small business clients the same level of data protection and business continuity that was once exclusive to large corporations, creating a competitive advantage that not only protects SMBs from potentially devastating data loss but also positions MSPs as essential strategic partners in their clients’ long-term success. Learn MORE

Implementation Best Practices for MSPsAssessment and Planning Phase

  • Business Impact Analysis (BIA): Identify critical systems and acceptable downtime
  • Risk Assessment: Evaluate threats and vulnerabilities
  • Gap Analysis: Compare current state to desired recovery capabilities
  • Cost-Benefit Analysis: Justify DR investments with business case

Technology Selection Criteria

  • Compatibility: Ensure solutions work with existing infrastructure
  • Scalability: Choose platforms that can grow with the business
  • Integration: Select tools that integrate with monitoring and management systems
  • Support: Evaluate vendor support capabilities and SLAs

Testing and Validation

Testing recovery plans had only 8.8% engagement levels among MSPs, indicating a significant opportunity for differentiation:

  • Regular Testing Schedules: Quarterly failover tests for critical systems
  • Partial Testing: Test individual components without full failover
  • Documentation: Maintain detailed test results and lessons learned
  • Continuous Improvement: Refine procedures based on test outcomes

Conclusion: The MSP Imperative

In summary, DRaaS works perfectly for companies that don’t have their own IT department, manage critical customer data, expect rapid implementation, and have stable Internet connections.

The most successful MSPs will be the ones that expand beyond traditional IT support and truly align with their clients’ evolving needs. Disaster Recovery represents both a critical service gap and a tremendous growth opportunity.

DRaaS is a very good service, but not a magic wand. Before making a decision, it’s worth checking whether needs lie in the cloud or on the floor in your own server room.

For MSPs, the message is clear: disaster recovery isn’t just another service offering—it’s a business imperative that can differentiate your practice, protect your clients, and drive sustainable growth in an increasingly digital world. The question isn’t whether to offer DR services, but how quickly you can build the expertise and partnerships to deliver them effectively.

Key Takeaways for MSPs:

  • Market Opportunity: The DRaaS market is growing at 26%+ CAGR, representing a $70+ billion opportunity by 2032
  • Client Vulnerability: 60% of small businesses close within 6 months of a cyberattack, creating urgent demand for DR services
  • Service Gap: Only 55% of MSPs currently offer DR services, leaving significant market opportunity
  • Technology Integration: Success requires combining traditional DR with emerging technologies like AI, edge computing, and multi-cloud architectures
  • Business Model Evolution: Subscription-based, tiered DR services can provide predictable recurring revenue while meeting diverse client needs

The businesses that survive the next decade will be those that recognize disaster recovery not as an expense, but as insurance for their digital future. For MSPs, that means the opportunity to become not just service providers, but trusted guardians of business continuity.

Industry Insights:

Paweł Mączka Photo

text written by:

Pawel Maczka, CTO at Storware