Why Veeam Falls Short for MSPs and the Alternative to Consider

If you’re familiar with backups and data protection, you’ve definitely heard the name Veeam before. They’re one of the leaders in the data protection market, and for good reason; they do a solid job of restoring your data when you need it. However, Veeam isn’t designed with Managed Service Providers (MSPs) in mind—it’s an enterprise tool meant to be used for an enterprise.

I frequently hear complaints from MSPs who are using Veeam for their backup-as-a-service offerings, and the issues are often the same:

• Excessive storage growth leading to increased cost and loss of margin.
• The lack of a true multi-tenant architecture makes management difficult.
• Licensing is overly complex, making it hard to know what’s needed.

I could go on. The reality is, MSPs have a unique set of needs compared to enterprises. What works for an enterprise doesn’t always work for an MSP. Think about it—when you’re managing backups for a single enterprise, you have one environment to worry about. But as an MSP? You’re essentially managing dozens (or even hundreds) of enterprise environments, each with its own complexities and maintenance requirements. It’s like operating a taxi service with a fleet of Ferraris—impressive on paper, but impractical and expensive in reality.

This is where Cove Data Protection offers a compelling alternative to Veeam. In the following sections, we’ll explore the common challenges MSPs face with Veeam and why Cove is a better solution.

Veeam’s Licensing & Cost Issues That Can Hurt MSP Margins

For enterprises, Veeam’s licensing model may be manageable, but for MSPs, it can be a nightmare. The licensing is often based on per-socket or per-instance models, which means:

• Costs scale unpredictably as you onboard more customers.
• Storage growth can eat into margins, making it harder to remain profitable.
• Complicated licensing structures make it difficult to forecast expenses.

At first, everything seems fine. You set up your customer’s backup solution, and it works well. But fast forward a year or two, and you’re facing exponential storage growth, which eats into your margins. You’re now stuck with a tough decision: Do you absorb the cost, or do you have that uncomfortable conversation with your customer about price increases?

If you choose to host Veeam yourself, you’re now responsible for managing the infrastructure, handling security patches, planning hardware refreshes, and dealing with upgrades. Your team becomes responsible for the backup infrastructure in addition to their other tasks. On the other hand, if you’re outsourcing to a provider, you’re essentially reselling the service. Those healthy margins you were hoping for? They’re now going to someone else, leaving you with slim profits and limited control.

How Cove Solves This: Unlike Veeam, Cove Data Protection offers simple, predictable per-device pricing, with cloud storage included. This means no unexpected storage costs and a pricing model that scales with your business.

Veeam’s Complexity Creates Operational Overhead

One of the biggest pain points MSPs report is that Veeam requires a dedicated “Veeam guy.”

• Managing Veeam backups takes significant expertise and time.
• Each customer’s backup environment needs to be set up and managed separately.
• When your Veeam expert leaves, your backup operations suffer.

The reality is that what you’re really getting is enterprise-grade complexity multiplied across every customer you serve. It’s like buying an airplane when your customers just need a car—sure, it can fly, but do they really need that capability? And more importantly, can you afford to maintain it?

How Cove Solves This: Cove Data Protection is designed to be simple, intuitive, and easy to manage—without needing a specialist. The cloud-first architecture reduces manual maintenance, patching, and troubleshooting.

Veeam Lacks True Multi-Tenancy

For MSPs, multi-tenancy isn’t optional—it’s essential. You need to be able to manage multiple customer environments from a single interface without manually switching between them.

Veeam forces MSPs to:

• Manually segment each customer’s backups.
• Maintain multiple consoles.
• Spend more time on admin tasks instead of growing your business.

While Veeam’s scale-out backup repositories can help with scaling storage, it doesn’t reduce the operational complexity that comes with managing multiple backup environments. With a more streamlined, true multi-tenant architecture, MSPs could avoid the costly and time-consuming process of manually managing each customer’s backup environment separately.

How Cove Solves This: Unlike Veeam, Cove provides true multi-tenancy, allowing MSPs to manage all customer backups from a single, unified dashboard. This means:

• No need for separate consoles.
• Faster onboarding and management.
• Easier scalability as you grow.

Most MSPs Pay for Veeam Features They Don’t Need

Veeam comes with a long list of enterprise-grade features, but most MSPs don’t use 80% of them.

• Sure backup and tape backup integration are great for large enterprises, but SMB customers rarely use them.
• Feature bloat increases complexity without adding value.
• MSPs pay for 100% of the software, even if they only need 20% of its features.

How Cove Solves This: Cove is built specifically for MSPs—without unnecessary enterprise features that drive up costs and complexity.

The Right Backup Solution for MSPs

Veeam is a powerful backup tool, but it was never designed for MSPs. Its complexity, high costs, and lack of multi-tenancy create more problems than solutions for managed service providers.

The good news? MSPs don’t have to settle for enterprise software that doesn’t fit their business model.

Cove Data Protection was built for MSPs from the ground up.

• True multi-tenancy.
• Predictable pricing with cloud storage included.
• No specialist required—simple, intuitive management.
• Lower total cost of ownership. Click here to check out our Total Cost of Ownership calculator

Ready to make the switch?

Try Cove today and see how a backup solution built for MSPs can simplify your operations and boost profitability.

Kyle Lawhorn is a Cove Data Protection Sales Engineer at N‑able