If you’ve ever had a kid you know about product bundling. Fast food chains combine a burger, drink, fries and – most importantly – the toy in a colorful box. The customer escapes the agony of their three-year-old choosing specific items, and the chain prices the combo high enough to meet their profit objective. It works because it’s simple.
Based on early feedback, it seems like Cisco, VMware and EMC are a few fries short of a Happy Meal in pitching their bundles of physical servers, virtualization software and storage hardware to customers building private clouds (internal virtual data centers.)
Bundling can provide several benefits, but the new joint venture formed by the companies to sell these bundles has to pitch the right benefits to the right customers.
One benefit is lower costs, but most big companies can already beat up vendors on price – especially in today’s market. Simplicity is another potential draw, but large companies will still need to integrate these bundles with their legacy gear and applications. Even EMC says customers will have to do 20 to 30 percent of the required customization for their bundles.
Providing “one throat to choke” in the event of problems is a possible benefit of buying a bundle. Buying from a single source cuts down on the costs of vendor management and possibly also of troubleshooting. But that benefit, in turn, could be offset by the threat of vendor lock-in, as some of VMware’s virtualization software will be tweaked for use in these bundles.
Cisco and EMC/VMware are smart companies, and I’ll bet they’ve figured out a lot of these issues. But customers haven’t gotten the message yet. Hey, maybe they should talk about the free toy.
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