Tuesday, March 27, 2018

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 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 want 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


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  1. For the price point of $299 a month. Does your bundle include any hardware?

  2. No hardware is included. This is just a bundle of services for up to five people. As an add-on we will place a small "server lite" onsite for a service fee (normally around $150/mo). That machine would only exist to provide onsite active directory and backup from the cloud storage. No line of business apps!

  3. Follow-up. I got an email from Tim. He asks two questions.

    "1. Are you bundling Office as in 365 or to buy licenses versions of office?
    2. For your storage / backup is that storage local or cloud?"

    For office, we buy/distribute O365 through Intermedia. I have used Rackspace and I recently signed up for a Sherweb account. Bottom line for me: I don't like the Microsoft program or interface. I don't like having Microsoft own the product. And I want to make money. So I bundle everything and keep Microsoft away from my clients.

    As for storage, we can go either way. My preference is for primary storage to be in the cloud and I back it up by bringing it down to a local device. But if the client has a server full of live data onsite, we use the storage we sold them to back it up to the cloud.

    Thanks for the question.

  4. I have in the past, not sold a web site due to issues that came up.The customer sometimes has the URL and is reticent to give us access to the DNS configuration. Other times the customer wanted a different OS (Windows vs Unix) or a different set of tools (to self create the website). Or want the website under their account so they maintain control. What has been your experience with selling a website along with the 5-pack.

  5. Great question, Denis. First of all, I sell a super-basic web site. That means either very simple flat-file site or I set up WordPress and give them the credentials.

    Second, most people don't take me up on this because they've already got a web site somewhere and they're just fine.

    I have a hosting plan at www.dreamhost.com - so a basic web site costs me almost nothing. I'm happy to let people have whatever access they need. I'm not responsible for backing it up or anything. That's on them.

    BTW, we have always controlled domain registration and DNS for 95% of all clients. Even now, I still control most domain registration and DNS (and even some web site) for almost every client we've ever had.

  6. Would you ever so a co-branded offering? SherWeb offers free 24/7 support on anything you but from them if you buy it co-branded instead of White label. It seems like it would add values and lower super costs, but it also seems like the current might think "if I can call them, why do I need you?". Just curious on your thoughts on this option.

  7. I have no problem telling clients I use Sherweb or Intermedia (etc.). I've never believed in white labeling. My clients know I don't own a programming house, a spam filtering company, and so forth. Yes, they "could" go to Sherweb, Rackspace, JungleDisk, Microsoft, etc. and put all this together themselves. But they'd come up with a crappy, glommed-together, un-coordinated set of services.

    At the end of the day, your clients want to be accountants, attorneys, architects, or whatever. They don't want to put all this stuff together and do it themselves. So telling them that you're putting together a bundle of brand-name services looks good to them and they rely on you to make it all work together.

    Also: If you have prospects who seriously think they can do all this themselves, walk away and find professionals upon whom you can build your service business.


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