Not sure what you mean by "a heavily saturated market for cloud...

Not sure what you mean by "a heavily saturated market for cloud backup services." Something like 90% of businesses don't backup their cloud data, the market is the opposite of saturated.

As far as competitive advantages go, there are other businesses (I'm aware of one) which have more than 10x the scale of Dropsuite in terms of number of users, with similar products and prices, so I'd disagree with that one. I think Dropsuite does well promoting their brand by attending trade shows selectively and sponsoring the event, having a strong presence, etc. as well as winning awards, I'd say their brand is likely their strongest competitive advantage, but that it is not a very good one.

I see switching costs as the biggest thing that will protect Dropsuite's revenues when one day the market is eventually fully saturated (that is a long, long way off considering how many businesses actually use services like Dropsuite's and how quickly the market is growing). Another factor to consider is the fact that their customer who is paying the bill is the end user but they are selling to MSPs. It's like a mechanic buying car parts, they are going to buy the car part that they know will be reliable and result in the customer not coming back, they are less price sensitive as they just charge the price of the part to their customer. I think a product would need to offer a lot of advantage, either through a significantly better product, cheaper product or more convenience, such as they can get multiple products they sell through one company instead of another company + Dropsuite. But these advantages have to be enough to make it worth switching, worth retraining and worth the risk of the new solution not being as good. Considering the quality of Dropsuite's products (consistently winning awards for best product) and the simple, low-cost nature of the service they offer, I see the first 2 as unlikely concerns, and the last option has been a problem in the past (well I'd say it was at least related to this) and is why Dropsuite have made such an effort to diversify their customer base to mitigate this risk.

I don't think Dropsuite has much in the way of competitive advantage, but with a rapidly growing under-penetrated market for cloud backup products I don't think they really need one and a combination of always pleasing their MSP partners, innovating and developing new products (like the new QuickBooks backup product), maintaining their brand reputation so they are seen as a premium backup solution and switching costs, will continue to result in very low levels of churn (historically below 3%).