Microsoft 365 stores your emails, files, and collaboration data in the cloud, but it does not independently back up that data for long-term recovery. Microsoft operates on a shared responsibility model: they keep the platform running, and you protect the data inside it. When retention windows close, deleted or corrupted information can be gone for good.

That is where hosted Microsoft 365 backup providers come in. These services maintain independent copies of your Exchange, SharePoint, OneDrive, and Teams data so you can restore it on your own terms. Virtual Systems gives you Veeam-powered Microsoft 365 backup with managed support, immutable storage, and straightforward per-user pricing built for small businesses.

In this article, we compare five hosted Microsoft 365 backup providers and break down what matters most when choosing one for your business.

Quick guide: 5 best hosted Microsoft 365 backup providers for SMBs

1. Virtual Systems: The best Veeam-powered hosted Microsoft 365 backup for SMBs that need managed protection with verified recoverability
2. Dataprise: A Veeam-based option geared toward organizations that also need DRaaS and broader managed security services
3. Otava: Compliance-oriented hosting with Microsoft 365 backup, HIPAA and SOC audited data centers, and unlimited retention
4. Managecast: A provider with a self-service portal (VMOBACKUP) that automates Microsoft 365 backup setup and user detection
5. AvePoint: A SaaS backup platform that covers Microsoft 365 alongside Salesforce, Dynamics 365, and Google Workspace

How we chose the best hosted Microsoft 365 backup providers

Choosing a hosted backup provider is about more than checking a features list. You need confidence that your data will be there when you need it, that recovery is fast, and that the provider fits how your team actually works. Here is how we evaluated each option.

• Workload coverage: Does the provider protect Exchange Online, SharePoint, OneDrive, and Teams? Partial coverage leaves gaps that could cost you during a recovery event.
• Recovery speed and granularity: Can you restore a single email, an entire mailbox, or a full SharePoint site? The more flexible the recovery, the less downtime your team faces.
• Backup verification: Does the provider confirm that backup jobs complete successfully and that stored data is actually recoverable? Unverified backups are a liability.
• Security and compliance posture: Are backups encrypted in transit and at rest? Does the provider hold relevant certifications such as HIPAA, SOC 2, or PCI compliance?
• Managed support model: How much of the backup administration does the provider handle? For small teams with limited IT staff, fully managed services reduce operational burden.
• Retention flexibility: Can you define your own retention periods to satisfy regulatory requirements or internal policies, rather than relying on the provider’s defaults?

The 5 best hosted Microsoft 365 backup providers for SMBs

1. Virtual Systems: Best overall hosted Microsoft 365 backup for SMBs

Virtual Systems delivers hosted Microsoft 365 backup as a fully managed, Veeam-powered service designed specifically for small and mid-sized businesses. As a Veeam Platinum Cloud Service Provider, Virtual Systems operates from monitored Midwest data centers with a 99.999% uptime guarantee.

Your Exchange Online, SharePoint, OneDrive, and Teams data is backed up automatically, stored with immutable protection, and recoverable through granular or full-account restores. Virtual Systems also offers an optional Microsoft Entra ID backup add-on, covering identity data that many providers overlook.

What sets Virtual Systems apart is the managed experience. Their team handles configuration, monitoring, and verification so your IT staff can focus on other priorities. Backup jobs are tested for recoverability before an incident occurs, not after. According to the Veeam Data Trust and Resilience Report (2026), only 28% of ransomware-affected organizations fully recovered their data, which underscores why verified, recoverable backups matter.

Virtual Systems features

• Complete workload protection: Backs up Exchange Online, SharePoint, OneDrive, Teams, and optionally Entra ID from a single managed service, so you are not piecing together coverage from multiple tools.
• Immutable backup storage: Stored copies cannot be altered or deleted by ransomware, insider threats, or accidental changes, giving you a clean recovery point you can trust.
• Verified backup recoverability: Virtual Systems tests backup integrity proactively, confirming that your data is actually restorable before a disaster strikes.
• Granular and full-account restores: Recover a single email, a SharePoint list, or an entire mailbox depending on the situation. The Veeam Explorer-based restore portal gives you precise control.
• Straightforward per-user pricing: No bandwidth charges, no API fees, and no surprise overage costs. You pay a clear monthly rate per protected user.
• HIPAA, PCI, and SOC 2 compliant infrastructure: Virtual Systems holds these certifications, which means your backups meet regulatory standards required by healthcare, financial services, and other compliance-driven industries.

Virtual Systems pros and cons

Pros	Cons
Fully managed backup with proactive monitoring and verification	Regional data center focus may not suit organizations requiring global geographic distribution
Veeam Platinum partner status provides access to advanced Veeam recovery tools	Entra ID backup is an optional add-on rather than included by default
Transparent, fixed monthly pricing eliminates billing surprises	Onboarding requires coordination with Virtual Systems project managers, adding a brief setup window

 

2. Dataprise: Veeam-based managed backup with broader IT security services

Dataprise provides Microsoft 365 backup as part of a wider managed IT portfolio that includes DRaaS, cybersecurity, and cloud infrastructure services. Their Microsoft 365 backup is powered by Veeam Data Cloud, covering Exchange, SharePoint, OneDrive, and Teams with immutable storage and hands-on onboarding support.

The provider’s approach emphasizes personal setup assistance. Dataprise walks clients through configuration rather than sending self-service credentials, which can reduce misconfiguration risk for teams without deep backup expertise.

Dataprise features

• Veeam Data Cloud integration: Uses Veeam’s cloud-delivered platform to protect Microsoft 365 workloads with immutable and encrypted backup storage.
• Guided onboarding: Dataprise staff configure and validate the backup environment alongside your team, reducing the chance of setup errors.
• Broader managed services bundle: If you also need DRaaS, endpoint security, or infrastructure management, Dataprise provides those under one vendor relationship.

Dataprise pros and cons

Pros	Cons
Hands-on onboarding with dedicated staff support	Microsoft 365 backup is bundled with broader IT services, which may add complexity for businesses that only need backup
Covers Exchange, SharePoint, OneDrive, and Teams	Pricing details are not published publicly, requiring a quote
Includes Entra ID and Salesforce backup through Veeam Data Cloud	The company primarily serves mid-market and enterprise clients, which may affect response times for smaller accounts

 

3. Otava: Compliance-oriented hosting with unlimited backup retention

Otava offers Microsoft 365 backup powered by Veeam from data centers that hold HIPAA, PCI, SOC 1/2/3, HITRUST, and ISO 27001 certifications. Their backup service covers Exchange, SharePoint, OneDrive, and Teams with unlimited retention at no additional storage cost.

For organizations in regulated industries such as healthcare or financial services, Otava’s compliance-ready infrastructure can simplify audit preparation. Their backup is fully managed, so installation, configuration, and maintenance are handled by the Otava team.

Otava features

• Unlimited retention: Store Microsoft 365 backups for as long as your compliance or business policies require, with no added retention fees.
• Granular recovery: Restore individual items, folders, or full accounts using Veeam-based recovery tools.
• Multi-framework compliance: Data centers meet HIPAA, PCI, SOC 1/2/3, HITRUST, and ISO 27001 requirements.

Otava pros and cons

Pros	Cons
Unlimited retention included at no extra cost	The provider focuses on regulated mid-market companies, and resources for smaller accounts may be limited
Extensive compliance certifications across multiple frameworks	Entra ID backup availability is not prominently documented
Fully managed backup administration	Onboarding timelines are not published and may vary by engagement size

 

4. Managecast: Self-service portal with automated user detection

Managecast provides Microsoft 365 backup through its VMOBACKUP portal, a self-service platform built on Veeam technology. The portal automates user detection, so new Microsoft 365 accounts are picked up without manual intervention. Managecast has operated as a Veeam Cloud Service Provider for over 24 years.

The VMOBACKUP portal is designed for IT teams and MSPs that want to deploy, manage, and monitor backups from a single dashboard without coordinating with a sales team. Month-to-month terms and a free tier for up to 10 users lower the barrier to getting started.

Managecast features

• Automated user detection: New Microsoft 365 users are added to backup jobs automatically, reducing administrative overhead.
• Self-service restore portal: Search and recover individual emails, files, or entire mailboxes directly from the VMOBACKUP dashboard.
• MSP multi-tenant support: Manage multiple client environments from a single portal, which is useful for managed service providers.

Managecast pros and cons

Pros	Cons
Self-service deployment with no sales call required	The self-service model means less hands-on guidance during setup compared to fully managed providers
Automatic user detection reduces manual backup management	Compliance certifications for the hosting environment are not prominently documented
Free tier available for up to 10 users	Advanced reporting and monitoring features are limited compared to fully managed alternatives

 

5. AvePoint: Multi-platform SaaS backup with broad workload coverage

AvePoint Cloud Backup protects Microsoft 365 alongside other SaaS platforms including Salesforce, Dynamics 365, Google Workspace, and Power Platform. The service backs up Exchange, SharePoint, OneDrive, Teams, and Groups, with up to four backup jobs per day available on standard plans.

AvePoint positions itself as a data management platform rather than a pure backup tool. This broader scope can be an advantage if your organization runs multiple SaaS applications and wants centralized protection, though it also means the platform carries complexity that a single-workload backup service would not.

AvePoint features

• Multi-SaaS coverage: Protects Microsoft 365, Salesforce, Dynamics 365, Google Workspace, and Power Platform from one console.
• Teams chat backup: Includes protection for Teams chat messages, which several other providers require as an add-on.
• Entra ID protection: Backs up Entra ID (Azure AD) data as part of the core service.

AvePoint pros and cons

Pros	Cons
Covers a wide range of SaaS platforms beyond Microsoft 365	The broader data management platform may introduce complexity for teams that only need Microsoft 365 backup
Includes Teams chat and Entra ID backup in the core service	Pricing is not published and requires a custom quote
Up to four daily backups on standard plans	Restore speeds and granularity depend on the specific plan tier selected

 

Comparison table: The best hosted Microsoft 365 backup providers for SMBs

Provider	Verified Backup Recoverability	Immutable Storage Included	Entra ID Backup
Virtual Systems	✓	✓	✓ (add-on)
Dataprise	✗	✓	✓
Otava	✗	✓	✗
Managecast	✗	✗	✓
AvePoint	✗	✗	✓

 

Does Microsoft actually back up your Microsoft 365 data?

Microsoft keeps the Microsoft 365 platform available, but it does not provide traditional backup for the data you store there. Under the shared responsibility model, Microsoft handles infrastructure uptime, geo-replication for service continuity, and short-term recycle bin recovery. You are responsible for protecting your own data against accidental deletion, ransomware, insider threats, and retention policy gaps.

The built-in recovery windows are limited. Deleted emails can be recovered for 14 to 30 days. SharePoint and OneDrive files have a 93-day recycle bin window. Once those windows close, the data is gone unless you have an independent backup.

Microsoft does offer its own Microsoft 365 Backup product with pay-as-you-go pricing, but it stores backups within the same Microsoft ecosystem. For businesses that need copies stored outside of Microsoft’s infrastructure, a third-party hosted backup provider adds a layer of separation that strengthens your recovery posture.

What should SMBs look for in a hosted Microsoft 365 backup provider?

Start with workload coverage. Your provider should protect all four core Microsoft 365 services: Exchange, SharePoint, OneDrive, and Teams. Partial coverage creates blind spots that you may not discover until a recovery event is already underway.

Backup verification matters just as much as backup frequency. A provider that tests and confirms recoverability gives you evidence that your data is actually restorable. The Veeam Data Trust and Resilience Report (2026) found that 90% of security leaders believed they could recover within their RTOs, but only 28% of ransomware-affected organizations actually did.

Finally, consider the support model. Fully managed providers like Virtual Systems handle configuration, monitoring, and recovery assistance, which reduces the operational load on small IT teams. Self-service portals work for organizations with dedicated backup administrators, but they shift more responsibility onto your staff.

Why Virtual Systems is the best hosted Microsoft 365 backup for SMBs

Virtual Systems combines Veeam Platinum partnership with a fully managed service model designed around the needs of small and mid-sized businesses. Your Microsoft 365 data is backed up, stored immutably, and verified for recoverability, so you know your backups will work when you need them.

Unlike self-service platforms that hand you credentials and leave configuration to your team, Virtual Systems assigns project managers who handle setup, monitoring, and ongoing verification. This approach reflects a provider that understands most SMBs do not have dedicated backup administrators on staff.

Virtual Systems also delivers the full IT stack through a simple monthly subscription. Whether you need backup and disaster recovery, cloud workspaces, or infrastructure hosting, everything is available under one relationship. That consolidation simplifies vendor management and gives you a single team to call when something goes wrong.

Ready to see how Virtual Systems protects your Microsoft 365 data? Start a free 30-day trial or contact the team at 844-2-VIRTUAL to discuss your backup needs.

FAQs about hosted Microsoft 365 backup providers

Why do small businesses need a third-party Microsoft 365 backup?

Microsoft’s built-in recovery windows are limited to 14 to 93 days depending on the workload. After those windows close, deleted or corrupted data is unrecoverable without an independent backup. Virtual Systems provides hosted Microsoft 365 backup that stores copies outside of Microsoft’s infrastructure, giving your business a reliable recovery path.

What Microsoft 365 workloads should a backup provider cover?

Your provider should protect Exchange Online, SharePoint Online, OneDrive for Business, and Microsoft Teams at a minimum. Virtual Systems covers all four workloads plus an optional Entra ID backup add-on, so your identity data is protected alongside your files and emails.

How does Virtual Systems verify that backups are actually recoverable?

Virtual Systems proactively tests backup integrity and confirms recoverability before a disaster occurs. This verification process means you have evidence that your stored data can be restored, rather than assuming backups are working based on job completion status alone.

Is Microsoft 365 backup required for HIPAA or SOC 2 compliance?

Regulatory frameworks like HIPAA and SOC 2 require organizations to maintain data protection and recovery capabilities. A hosted backup provider with compliant infrastructure helps satisfy those requirements. Virtual Systems holds HIPAA, PCI, and SOC 2 certifications, which simplifies your compliance posture.

Can I try hosted Microsoft 365 backup before committing?

Yes. Virtual Systems offers a free 30-day trial for its hosted Microsoft 365 backup service. You can test backup and recovery for Exchange, SharePoint, OneDrive, and Teams with no upfront commitment, giving you a chance to evaluate the service in your own environment.