IT and Business Insights for SMB Solution Providers

What is the Cloud 5 Pack?

For more than ten years, I've made most of my money on the Managed Services side of my business with a product called the

Cloud 5 Pack

If you've attended my 2017 SMB Roadshow or attended my 5-week online course with ChannelPro, then you have heard the details of the the Cloud 5 Pack.

I've also mentioned the Cloud 5 Pack and the formula I've used to leverage it into millions of dollars worth of sales. For example, this video review of the HP Microserver mentions the Cloud 5 Pack.

Again and again, folks talk about the Cloud 5 Pack . . . and get it wrong. So let me explain what it is.

First: The Cloud 5 Pack is not something I sell to consultants. It's a formula I use for creating a bundle of hugely profitable cloud services. So you can't buy the Cloud 5 Pack from me. But sometimes I offer training on how to create YOUR Cloud 5 Pack using my formula.

Second: This is not rocket science. If there's any "secret" sauce here, it boils down to
1. Create a bundle. Never break up the bundle. Sell other stuff in addition to the bundle (manage services, other cloud services, HIPAA compliance, telephones, signage, etc.)
2. Always sell managed services on top of the cloud services. I prefer to sell them for the same price. e.g., $299 for the Cloud 5 Pack and $299 for the managed services component.

Third: The five-pack refers to five user licenses. So, the bundle is a collection of vital services, sold for "Up to five users." You have seven employees? You buy two 5 Packs. Someone reading this says it will never work because clients don't wan't to pay for unused licenses. Bullshit. They do it every day. But Symantec (or some other large company) gets the money for the unused licenses instead of you.

Fourth: The goal is to bundle "The core technology that every company needs." This Cloud 5 Pack is not the only thing you sell. But it is the thing you can sell to every single client you have. For example, my bundle includes
- Storage and backup
- Hosted Exchange mailboxes
- Office licenses
- Anti-Virus
- Spam Filtering
- Remote monitoring and patch management
- Web site
- Technology Roadmap (quarterly business review)
- Quarterly onsite training

It's extremely important that you move away from single-user licenses. They keep you from making real money. And they keep you competing on price. The bundle is a unique offering. Yours will be different from mine. And sold in a 5-pack (or 10- or 20-pack), you can offer an awesome package at a very reasonable price.

I make just over 100% on the cloud services bundle. Then I add managed services for those five users. And the managed services is almost 100% profit. So the overall package has massive value for the end user client and huge profit for me.

I've been delivering this basic bundle (with a few changes) since 2008. I've literally sold millions of dollars worth of this very simple collection of cloud services. In fact, it gets more profitable every year. Just the storage component alone has gone down in price in the last year by about $17 per 5-pack. That doesn't sound like much, but remember the total price is only $299. So without raising rates, my profit jumped more than 5% on one component.

Virtually every question I get about selling this offering is based on fear. IT professionals come up with all kinds of reasons why a client would not buy it. But most of those questions exist only in the heads of the IT Pros. Clients never ask me about unused licenses. Clients never ask me about what happens to their old AV or their old Microsoft account. They don't care about that stuff.

ALL of the client questions are based on security and reliability. And every day there's a new story about how SMB is under attack by cyber criminals. And every year there's a new disaster that demonstrates that the cloud is the place to be.

I hope this gives you a good idea of what I'm selling. It is a bundle that allows me to promise the client essentially 100% uptime, a great price, and all the core technology they need to run their company.

Last year I did six-hour trainings on this, so I obviously can't spell out all the details in one blog post. But I hope you can reverse-engineer from here.

More than ever, I firmly believe that servers are already a thing of the past. You need to be selling only serverless architecture to your clients.

Take a stab at it. Create YOUR Cloud Five Pack. I'll bet the first client you talk to about it will ask to sign up right away.

Questions welcome.

- - - - -

Update: I did a lengthy webinar and answered LOTS of question about this. Replay is here.
- kp


About the Author

Karl W. Palachuk, is a technology consultant, author, speaker, trainer, and coach. He is the author of fifteen books. He has built several successful businesses, including two managed services companies. His books include Managed Services in a Month and The Network Documentation Workbook. Karl is a frequent trainer and speaker in the SMB Community. His popular blog can be found at He has more than twenty years experience as an I.T. professional and serves on advisory panels for several hardware and software companies.

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