Economics18 Aug 2026 · 5 min read

Calculating Backup Margin Mid-Call

Four numbers, no spreadsheet, no call to the vendor

By Kapardyn Engineering

A prospect on a call asks what backup would cost for 240 seats. The useful question is not what the answer is — it is how long it takes your account manager to produce it.

If producing it means opening a tier calculator, checking which add-ons are included, or emailing the vendor, you have a pricing model that quietly costs you deals. The competitor whose number is on a public page answered while you were still checking.

The calculation, in full

Four numbers. All of them available without contacting anybody.

240-SEAT PROSPECT · GROSS MARGIN
Platform cost per seat at this band$0.99
Published band: 100 – 999 seats
Typical resale, per seat per month$3.50
Gross margin per seat$2.51
Seats× 240
Monthly gross margin on this client$602
Resale figure is illustrative — substitute your own. The point is that every input except your own price is published.

Why so much of this market is gated

We tried to price eleven Microsoft 365 and Entra ID backup products from primary sources — the vendor's own page, quoted exactly, dated. Three published a clear ladder. A few published partially, or only on a cloud marketplace while their own site stayed gated. Eight published nothing at all.

Gating pricing is a legitimate commercial choice, and there are reasonable arguments for it: it protects margin in negotiation and keeps competitors guessing. It also transfers a cost onto the partner, because every quote becomes a call, every renewal becomes a negotiation, and you cannot model a margin on a number you do not have.

The full ladder

$1.99 per user per month at 1–9 seats, $1.49 at 10–99, $0.99 at 100–999, $0.79 at 1,000 and above. Storage is not bundled — backups land in a bucket you own.

What published pricing does not mean

It does not mean cheapest, and it should not be read that way. A published number is simply one you can plan against, which matters most at the point where you are quoting a client a fixed monthly figure and carrying the difference yourself.

It also does not mean there are no other costs. Storage sits outside the seat price under a bring-your-own-storage model, and that is a real line item — one you control, on a contract you hold, but a line item nonetheless. Any margin calculation that omits it is incomplete.

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