“Free” features get paid for somewhere, usually at renewal.
The Idea
Bundling sells multiple products together at one price. It works for sellers because customers value components differently, so a bundle captures more total willingness to pay than selling each item separately. It also helps a vendor push a new product by attaching it to one you already depend on.
The economics were set out in a 1976 paper by William James Adams and Janet Yellen, who later chaired the US Federal Reserve. A simple example shows the logic. One customer values a word processor at $60 and a spreadsheet at $40; another values them the other way around. Priced separately at $40 each, the seller earns $160 from the two customers; at $60 each, $120. Offered together at $100, both customers buy the bundle, and the seller earns $200. Adams and Yellen also showed that “mixed bundling,” offering the bundle and its parts side by side, often does better still.
In ITAM Terms
Suites and premium tiers are bundles. They can offer real value, but they blur what you’re paying for and make it harder to compare alternatives or drop the parts you don’t use. The arithmetic above also works in reverse: a bundle priced on combined willingness to pay is only a bargain if you would have bought most of its parts anyway.
Where You’ll See It
- Software: Productivity and security suites include tools that overlap with products you already license elsewhere, so you pay twice for the same capability. Regulators watch this too: in 2025, the European Commission accepted commitments from Microsoft to offer its business suites without Teams at a lower price than with it.
- Renewals: An add-on arrives “at no extra cost” this year, then becomes part of the baseline that next year’s price increase applies to. Over a multiyear term, each uplift compounds on features nobody asked for.
- Hardware: Devices ship with bundled support, warranties, or software you would have sourced differently. Bundled support is often the hardest to compare, because its terms rarely match a third-party alternative line for line.
- AI: AI features get folded into existing suites, often justifying a price increase or tier change whether or not your users adopt them. In January 2025, for example, Google included Gemini in Workspace business plans, retiring a separate add-on and raising Business Standard from $12 to $14 per user per month.
Governance Takeaway
Unbundle for analysis even if you buy bundled. Map each component of a suite to actual usage and to any overlapping tools. That tells you whether the bundle is a bargain and whether you can retire standalone products it duplicates. Ask for component pricing even when you plan to buy the suite: the gap between the bundle and its parts shows what the vendor thinks each piece is worth.
Try This
Pick your largest suite and list every component. Mark each as used, unused, or duplicated elsewhere. The duplicates are your quickest win; the unused parts are your renewal talking points.
