6 Things to Know Before You Start your Response to an IaaS Cloud Hosting RFP

In an earlier article, I discussed some of the things you need to get right in a proposal in order to stand any chance of being successful with it.

In this piece, I’ll be exploring an earlier stage – things you must understand before you even consider cutting the first word of your proposal in response to an RFP.

Can you actually do it?

I have known organisations to be half-way through preparing a proposal and already be admitting that they can’t meet the potential customer’s requirements.

My question in such cases is simple – why are you bothering then?

There may be odd times when such an apparently wasted effort is justifiable. Perhaps you’re trying to gain experience of submitting proposals to a certain industry segment or possibly you’re seeking to increase your profile and visibility with a client or in their wider network of contacts.

Generally though, you should regard your time as your most precious resource along with your personnel. It can be a painful realisation but if you see on an initial read of an RFP that this isn’t going to be doable, don’t sink your energies into a no-hope engagement.

Companies tend to respect providers who decline to submit a proposal for specified valid reasons. Your reputation will be protected or potentially enhanced by doing so.

Of course, don’t give up on the proposal if the challenges are few in number and relatively minor. The potential customer may be able to compromise on some of their requirements and typically won’t react badly if your proposal is predicated upon them doing so – within reason.

You must be able to survive a due diligence check

The potential customer will almost certainly be required, by their own compliance processes, to undertake a moderately in-depth investigation of your company. Some might do so before issuing an RFP, most will only do so once they’ve read a proposal and decided that it is broadly credible.

This check will usually entail them looking at a few basics:

  • how long your company has been around. If you are a new start-up or have less than 2-3 years trading experience, it’s going to be potentially very tricky for you – unless you can offer some very significant benefits to offset your ‘new kid on the block’ millstone;
  • how you’re doing in financial terms. They’ll normally ask for 2-3 years’ worth of annual accounts and will be looking at your profitability and balance sheet etc. This is essentially because they want to try and assess whether or not you’re still going to be trading in say, 24 months. If you’re posting lots of losses or display other indicators that suggest potential trouble, you may struggle to be seen as being credible;
  • how you conduct your financial affairs. This usually covers things such as your average invoice settlement, late submission of accounts and questionable credit score reports;
  • your public reputation. This often involves standard internet checks but some customers may also employ special analysts. Things like supporting charities and local institutions, speaking at seminars/trade shows and publishing articles are all good publicity. By contrast, news of strikes, employee disputes, accidents, problems at your site and legal judgements against you, will raise at least Amber and possibly even Red flags in the mind of the potential customer;
  • the people at the top of your organisation. This will be partly to research their expertise but also their track record in terms of what they have done in the recent past elsewhere in the sense of conducting themselves appropriately.

There’s no easy advice to offer here other than ‘be aware’. Minor glitches in these areas may be embarrassing but survivable. Lots of bad news probably won’t be.

If you’ve had, for example, some significant financial problems which you have now overcome, you may need to accept that you’ll need to log a period of stability before you’ll be able to be taken seriously with proposals to new prospects.

If you’ve had some negative publicity, you may be able to offset that in part by securing positive visibility in other areas.

Your price will need to be sensible

Contrary to some mythology, customers do not simply select the cheapest proposition they see arrive on their desk.

As you might expect and hope, they’ll be assessing your proposal on many factors alongside price including things such as service quality, risk assessment, your professional positioning and so on. For example, being the lowest-price won’t secure you the contract if you’re also perceived as being amateurish.

However, whether you like it or not, your prospect isn’t going to read through your proposal sequentially to begin with. They’re not going to want to dwell on your company’s mission statement and the strength of your organisation, whilst patiently waiting for you to get to a competitive price.

Studies have shown that typically, your prospect will look immediately at the pricing information in the executive summary or in the appendix. If your price is say, 40% higher than everyone else’s, the chances are the rest of your expensively-crafted proposal will never even be read.

Above all else, your price will need to be market-competitive. If it’s the lowest fine but if it’s not, you will need to have compelling propositions in your proposal to make that difference seem irrelevant.

Top tips here are:

  • know market pricing through market intelligence. If you are regularly say, 40% higher than everyone else, you need to know why and potentially fix it fast – including radical reviews of your cost base;
  • in the current marketplace, be very cautious about seeking big profit margins on individual clients.

You will need evidence of your capabilities – existing customers

It’s easy to make promises and self-aggrandise in a proposal. A little of that will be expected and permissible.

However, many prospects will want to see that you have a significant existing client base and very possibly ask to speak to or even visit some of them, perhaps with you not present. If you can’t provide a selection of clients who are willing to speak well of your services, you may again hit a wall here.

Broadly speaking, your clients made available for referencing will need to be:

  • relatively substantial. Very small enterprises probably won’t strike the right note, unless your prospect is also one such;
  • successful. Companies that are struggling to survive won’t create the right impression. Even if their troubles are entirely unconnected with you, it can sometimes be a case of reputational contamination by association;
  • roughly comparable in their systems and IT infrastructures;
  • very well disposed towards you. This is about CRM – because it’s far from unknown for a reference client to do a hatchet job on a provider in private!

On a related note, be cautious about supplying or mentioning existing customers who are direct competitors of your prospect. Some won’t feel comfortable with knowing that their equipment, systems and data sit alongside a rack accommodating those of their arch-enemies – however much you talk about firewalls and software segmentation!

If you can’t offer reference customers or an extensive client base, you may need to go into new start-up mindset and seek to incentivise the prospect to take what they will see as the added risk – usually meaning price.

You will need to spend a lot of time on your proposal

I make no apologies for repeating this from my other articles, it’s something I mention regularly.  


Some potential providers make the classic mistake of simply not allocating sufficient time, effort and resources to their sales activities in general and in this context, the production of their proposals. Be very clear, assuming a professional outcome is your objective, this is going to take a lot of time.


  • thoroughly read the RFP and be sure you understand it by asking questions of the producers. It’s likely to be fairly voluminous but you simply must do so if you plan to submit a response;
  • try to allocate a production team to it, comprising all the required expertise from your company. Make sure this is a priority for them and that they’re allocated time away from their normal activity schedule to produce it;
  • make sure the proposal is professionally written-up and don’t assume that technical personnel necessarily have these skills. Howling grammatical errors, formatting that is all over the place, ambiguous or incorrect terminology – these things and others like them are usually very poorly received by prospective clients;
  • segment your proposal into an executive / senior management summary of some form (perhaps just 2-5 pages) and a supporting heavily detailed publication for more technically qualified readers;
  • present the summary in person via meeting or presentation, if the prospect will permit. If they do, make sure the people leading the presentation have received appropriate presentation training and don’t simply look ill at ease while doing so.

These points are all about demonstrating to the prospect that you’re taking them and their requirements seriously. Fail to achieve that and your proposal will be discarded, however meritorious it may be otherwise.

That the potential ‘win’ return is sufficient to justify the cost/effort you need to invest   

I’ve already mentioned the substantial effort and cost associated with producing a proposal. You need to be sure before even starting that the potential benefit, should you win, will justify that investment.  

This is a complex area and it assumes you have a degree of tight understanding of your cost base. The two basic questions though are:


  • is this a proposal you have any realistic chance of winning;
  • is it big enough to justify the effort of participating?

I’ve discussed in other articles how important customer intelligence is. There is no point producing a proposal if, in reality, the contract has been notionally already decided upon and you’ve been invited to tender simply to make up the numbers.

There’s no need to labour that further.

The second point is equally tricky to assess at times. However, producing a proposal is typically hugely expensive and that holds true sometimes irrespective of the size of the contract under consideration.

So, it’s advisable to perform a quick thumbnail-sketch annual net profit projection based upon an initial skim of the RFP. If the cost-benefit analysis doesn’t make sense or the payback period is too long, it’s perhaps best to decline to go further (unless you see it as a loss leader of some form).

Finally, be very cautious about constructing a well-intentioned ‘light’ or as they’re sometimes called, ‘quick and dirty’, proposal for smaller companies who request such. It can lead to misunderstandings, disputes and troubles out of all proportion to your projected profit stats!