IT and Business Insights for SMB Solution Providers

Cloud Bundles Mean Business: Page 2 of 3

Best practices for building high-margin cloud bundles that provide value for customers. By Samuel Greengard
Reader ROI: 
CLOUD BUNDLES that include services, software, and hardware provide healthier returns than just selling a cloud service.
BUNDLES also simplify the buying process for customers.
CHOOSE PRODUCTS that deliver the biggest impact to different market segments, produce the best result, and are affordable.
TO GET YOUR PRICING RIGHT, examine internal costs, margins on individual products, and the competitive landscape.

A best-practice approach, according to Thadani, is to package bundles so that they deliver the biggest positive impact to different market segments. It’s wise to “include everything that you think the majority of your customers need and over-deliver, so they are pleasantly surprised by your performance or support, or the included features,” he says. You can differentiate your offerings with consulting expertise, service, and support.

When bundling is done effectively, the sum is often greater than the individual parts. For example, SCO Cloud has combined numerous critical components to produce a complete cloud-based solution for clients backed by high-quality support. SCO Cloud builds the virtual machine (VM) and handles backups, snapshots, replications, bandwidth, and security issues such as authentication, VPNs, and malware protection. “A bundle allows you to sell the whole solution, without piecemealing it all together,” Thadani explains.

Creating a bundle requires an understanding of products, specifications, and functionality across a wide spectrum of vendors, and which combinations of products produce the best results at an optimal price. You should also familiarize yourself with a cloud vendor’s roadmap and what service-level agreements and support frameworks are in place. Staying on top of market and product changes is key as well, Long says.

In some cases, working with a cloud distributor that packages and sells bundled products can simplify the process. Of course, it’s important to check out a distributor thoroughly, and understand how fast it can provision services, how it handles licensing and billing, and what service and support it offers.

Eric Long

Whether you work with a distributor or with cloud providers directly, it’s vital for clients to feel a sense of stability with a bundle. Frequent changes in offerings can undermine trust—and ratchet up the complexity level for you and your clients. A chaotic approach can also undermine profits, Long says. As a result, when he assembles tiers or packages, he aims to establish a vendor relationship for at least one year, and preferably longer. However, he also leaves some wiggle room. “We let clients know that we reserve the right to make changes if we find a better mousetrap,” he notes.

Selling Value

It’s unwise to assume that a client already understands the value of a bundle—or even the products and solutions it contains. When buyers are confused, they’re likely to balk, so you must take the time to explain everything clearly and thoroughly—without reverting to hard-sell techniques. “Value is always determined by the client,” Palachuk notes.

Long recommends steering clear of hype and a marketing-centric approach. Success revolves around listening closely to what clients say, recognizing their pain points, and conducting a thorough analysis of their business. This makes it possible to address current needs and also build trust that leads to an ongoing relationship—and revenue stream.

Explain to customers what the products in your bundle do, how they work together, why they’re necessary, and the overall value proposition. For instance, in the cybersecurity arena, you may need to discuss what defense-in-depth is and why it’s necessary to layer cloud and software-as-a-service solutions to create a stronger defense against cyberattacks. In the finance space, you could point out how bundling various commerce and finance functions—along with backups and strong security—drives cost and performance gains.

Finally, Long says it’s critical to check in with clients regularly to ensure that their needs are being met. “You don’t want to wind up with a client paying several thousand dollars a month for a solution they don’t understand.”

About the Author

Samuel Greengard's picture

Samuel Greengard, a business and technology writer in West Linn, Ore., is the author of The Internet of Things (MIT Press, 2015) and Virtual Reality (MIT Press, 2019).

 

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