aark group final deloitte presentation

AARK GroupRachel Chamberland, Alex Diaz,Amanda Lui & Kevin Satre

May 4th, 2011

Cloud Computing Market Analysis

Driving adoption of Project BlueSky in the Retail Industry: A Vertical Market Approach

Agenda

Situation Analysis

Retail Industry Vertical Analysis

Retail Industry & Cloud Computing Opportunities

Strategic Positioning Recommendation

Financial Analysis

Risks & Challenges to Implementation

Strategic Roadmap & Timeline

Q&A

Provide recommendations on most attractive industry verticals which will allow the client to double its cloud computing revenue over the next decade

- 3 -- 3 - Project BlueSky

2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

AARK Group

Adoption of technology only occurs if it adds value to business processes

Cloud computing based applications have steadily gained acceptance over the past few years and are poised to become an integral part of the future.

Offers scalability, cost efficiency, customization, and flexibility. Users pay only for amount used, reducing the need for substantial capital expenditure to meet just a single period’s demand.

Some major hurdles hinder the adoption of cloud technology: security concerns and the need to integrate with existing architecture. In essence, though the cloud holds much potential, moving to the cloud is not necessarily better in every situation.

The Situation

Benefits of Cloud Computing

Challenges

Drive adoption of Project BlueSky within the retail industry by offering more than just computing power, but support and customized cloud recommendations as well


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Analysis: retail industry & cloud computing is not a matter of “if”, but “when”

Huge need for additional computing power for analytics, product and service innovation. Needed for core business.

Used to run web sites, mobile apps, social media platforms

Product and service innovation

Analysis of customer, operational, R&D data

Huge cost savings due to retail’s highly variable nature.

Typically using antiquated legacy systems

Enormous potential savings in storing and maintaining data

The basis of the retail industry has been contingent upon anticipating and fulfilling customer needs. Need agility and speed to get products and services to market.

Changing need: With the economic recession, customers have become more cautious about spending. Also have higher expectations about service: whether it be faster and more efficient, or more personalized

Cloud computing offers the low costs, speed and flexibility needed

Industry Potential Current Cloud Applications Potential Cost Savings

Risks Cost of Migration Needs of Retailers

Source: “Industry Profile: Retail Sector.” 21 Mar. 2011: n. pag. First Research. Web. 30 Apr. 2011; “Retail IT Spending to Exceed $20B.” ABIresearch (2010): n. pag. Web. 2 May 2011.

Retail demand highly dependent upon economy. Concerns with security of data.

Industry manages large amounts of data

Retailers typically using antiquated systems already in need of upgrading: looking for low cost opportunities.

Struggles with efficiency highlighted during economic recession: emphasis on becoming leaner

Retail industry driven by constantly changing customer demands, tastes, and preferences—profitability is contingent upon meeting demand.

$4 trillion in revenue, steady growth

Studies show retailers are more interested in adopting cloud services

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Problems faced by the retail industry and BlueSky’s PaaS solutions

Industry is driven by customer and demographic trends: must identify customer preferences and provide sufficient supply for demand. Gather customer data and behavior to guide decision-making.

Increased computing power allows companies to process and analyze data quickly, thus providing greater agility in adjusting supply to match the customer demand.

Improper identification of consumer preference trends lead to incorrect merchandise ordering decisions, forcing retailers into either a shortage or markdowns. Both situations are major sources of cost for the retail industry.

Inexpensive additional computing power allows companies to increase their speed and agility to market for new products and services.

Expectations of customer service have risen across the past few years. Customers are expecting better, personalized service. Retailers have found that personalizing a customer’s experience cultivates a stronger likelihood for repeat business: storing customer data has allowed retailers to more easily personalize a customer’s experience.

Massive amounts of data storage are accessible in the cloud, and companies are able to devote more resources to customer service rather than managing data/server costs.

Inventory Shortages & Markdowns High Customer Service Expectations

Transaction Flexibility Changing Customer Preference

Often experiences single high volume days. Meeting a single period’s demand typically requires large capital investments, which are then under used during the rest of the year.

With cloud computing, retailers can temporarily scale transaction capacity without being locked into their expensive capital investment.

Source: “Industry Profile: Retail Sector.” 21 Mar. 2011: n. pag. First Research. Web. 30 Apr. 2011.

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Differentiate by ensuring BlueSky’s services are more than just a commodity

Diagnose customer needs and offer specific cloud solutions and recommendations.

Additional support available for follow-up and guidance if needed

Differentiation

Create offers and prices comparable to

major competitors

Price

Educate decision makers on cloud

computing

Promotion

Advertise to retail vertical, but tailor

message to individual retail segments

Place

Free amount of monthly usage &

features, standard rates charged if over threshold

Free Trials

Option to establish cost ceiling, rates charged if user surpasses free

monthly allocation

Rates

Offer online classes in cloud computing

& BlueSky

Workshops

Advertisements of BlueSky’s Iaas & Paas, emphasize service support

Advertisements

Partners such as Association for

Retail Technology Standards

Org Partnerships

Send BlueSky representatives to

offer Paas services to existing clients;

gain referrals

Representation

Positioning Plan

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Projected NPV of $6.61B, begin earning operating profits in 2013

By entering into the retail market, BlueSky will increase its PaaS market share by 15% over the next ten years.

The PaaS market is projected to surpass $15 billion by 2016

IT spending in retail is expected to exceed $20 billion by 2014

The importance of technical innovation in the face of customer demand will make cloud computing a priority in IT spending

After the first two years of operating losses, 2013 will see a positive net income and profits will continue to rise.

BlueSky revenue is projected to increase over the ten years as the PaaS market grows

A high initial capital investment is necessary to set up data centers across the country

Market Share Growth

Operating Income

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Risks and challenges that may hinder BlueSky’s adoption

The economic downturn can reduce willingness of industry to invest in new projects.

Has reduced consumer spending and retail revenues available for investment

Higher interest rates and greater difficulty obtain financing could make it more difficult to fund cloud transition

Mitigate by emphasizing potential cost savings

Two major concerns of cloud computing that have resonated across all industries are control and security.

Back-up servers in different physical locations will minimize potential effect of server failure

Continuously monitoring the status of the servers, much like Amazon’s CloudWatch, will prevent hacking before it occurs

Recent events concerning the failure of major cloud computing service providers have significantly shaken consumer confidence in the security and reliability of cloud computing.

Recommend encrypting data

Emphasize that unlike traditional physical servers, cloud applications need redundant virtual resources: “design for failure”

In order to compete with other large players in the market BlueSky must differentiate itself.

The PaaS market is not yet saturated, but as the market expands more players will enter, driving down prices

Wide availability of cloud computing power could cause PaaS to become commoditized, instigating a price war

Government regulation and standardization are necessary to inspire consumer confidence and sustain long term adoption.

Establishment of security regulations and certification will help mitigate the concerns about cloud computing

Lack of industry standards may created difficulties transferring data between cloud providers

Due to lack of training and guidance, improper development of PaaS applications can tarnish customer experience.

Proper application development can help users avoid these pitfalls

Mitigate by offering training and support—teach users how to properly develop their applications

Economic Downturn Control and Security Consumer Confidence

Regulation User Based PitfallsCompetitors

AARK Group

Source: Harris, Jeanne G. and Alter, Allan E. “Cloudrise: Rewards and Risks at the Dawn of Cloud Computing.” Accenture. Nov 2010; York, Joel. “To Cloud or Not to Cloud in Financial Services.” Cloud Ave. 17 Sep. 2010.


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Timeline to implementation of BlueSky in the retail industry

Major Goals & Strategic Promotion Plan

Evaluation Points

10987654321

BlueSky PaaS Offering Timeline

AARK Group

General Awareness

Classes providing general education about cloud computing

Product reviews in trade magazines, Association for Retail Technology Standards

Press releases

Introduction of Product: Customer Trial

Online classes and tutorials introducing customer to BlueSky

Comprehensive trials for existing customers

Basic free trials for general public

Targeted Segment Advertising

Small: reach out through social media

Medium: send representatives to IT managers

Large: reach out to IT decision makers

Customer Adoption

Feedback outlets (i.e. focus groups, surveys)

Periodic evaluation & adjustment of product

Questions?

Appendix

Proposed Project BlueSky Usage Rates

Proposed Project BlueSky Free Trial Offer

Differentiation Strategy: offering services & support

Evaluation Criteria

Potential Cloud Computing Verticals

– Retail

– Automotive

– Financial Services

– Government

– Health Services

Retail Industry Vertical Analysis

– Retail Vertical: Sub-sections and Functions

– Basic core functions

– Top to Bottom Needs

– Attitude towards cloud computing

Financial Analysis

– Net Income and NPV

– Forecast of PaaS Market

– Operating Income

– Sensitivity Analysis

Analysis Implementation Financials

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Evaluative analysis of potential cloud computing industry verticals

Weight Financial Services AutomotiveHigh Tech &

CommunicationsGovernment

Health Services

Retail

Cost Savings 35% 3.0 2.9 3.4 3.5 2.7 2.9

Long-term cloud growth

15% 2.0 2.4 1.5 2.7 1.6 4.1

Cost of migration

15% 2.8 3.1 1.4 2.2 2.0 2.1

Varied usage demand

10% 1.7 2.6 3.2 3.2 2.7 4.8

Data control 10% 1.5 2.1 2.1 1.3 1.1 2.0

Market saturation

5% 2.7 1.8 0.3 0.3 0.9 3.2

Improved productivity

5% 4.2 3.0 2.9 3.4 2.8 3.1

Openness to cloud services

5% 3.6 3.2 3.5 3.4 1.9 3.7

TOTAL 100% 2.84 2.71 2.49 2.77 2.15 3.13

Industries with Most Cloud Computing Potential

Source: Harris, Jeanne G. and Alter, Allan E. “Cloudrise: Rewards and Risks at the Dawn of Cloud Computing.” Accenture. Nov 2010.

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Retail vertical industry analysis: cloud computing is not a matter of “if”, but “when”

Retail industry driven by constantly changing customer demands, tastes, and preferences—profitability is contingent upon meeting demand.

Large pool of resources:

– $4 trillion in revenue, steady growth

– Expected to spend $20 billion in technology by 2014

Over 1 million outlets in U.S. alone

Studies show retailers are more interested in adopting cloud services

Huge need for additional computing power for analytics, product and service innovation. Needed for core business.

4 in 10 companies see greatest potential in improved decision making

Used to run web sites, mobile apps, social media platforms

Product and service innovation

Analysis customer, operational, R&D data

Huge cost savings due to retail’s highly variable nature.

No longer need to pay for additional hardware to meet just a single day’s forecasted demand

Enormous potential savings from storing and maintaining data

Typically using antiquated legacy systems

Retail industry demand is highly dependent upon the economy. Consumer spending drastically decreases during times of economic distress.

However, US retail sales rose 8% in the first 3 months of 2011

Retail industry expected to be slower to adopt cloud computing

Retailers typically using antiquated systems already in need of upgrading: looking for low cost opportunities.

Struggles with efficiency highlighted during economic recession: emphasis on becoming leaner

Industry manages large amounts of data from: customers, products, stores, sales, supply chain, marketing, etc.

With quantity of data being gathered (i.e. store credit cards, loyalty programs), need to ensure that data is secure and that customers can entrust their information to retailers


Risks Cost of Migration Importance of Data Security

AARK Group

Source: “Industry Profile: Retail Sector.” 21 Mar. 2011: n. pag. First Research. Web. 30 Apr. 2011; “Retail IT Spending to Exceed $20B.” ABIresearch (2010): n. pag. Web. 2 May 2011.


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Automotive vertical industry analysis

Automotive OEMs need agility, reach, collaborative capacity.

Market power and revenues shifting to emerging markets (i.e. China, India); need to capitalize on changes in markets, customers and competition

U.S. annual car sales: 13.2 million, expected to rise to 15 million by 2020

China annual car sales: 8.6 million, expected to triple to 30.2 million by 2020

Cloud applications used primarily to build private sites. Also being used to link consumers to vehicles.

3 key fields of application:1. Integration into vehicle2. Community clouds for supply chain coordination3. SAP operations

Automotive OEMs still heavily reliant on traditional ERP-systems for management processes and applications.

Need low cost opportunities to upgrade capabilities, decrease operating costs

Industry runs a lot of analytics: high cost of servers, software licenses, maintenance, data center space, electricity, IT support

The greatest hurdles to cloud adoption in the automotive industry are security and data privacy.

Major concerns about losing physical control and access to data: automotive industry built around reputation

Currently experiencing major loss of sales due to recession

Automotive industry heavily relies upon its existing system for analytics, supply chain management, etc.

High integration costs: existing legacy systems will require a lot of custom development to integrate with the cloud

Intangibles: still major concerns of risks, hesitation to write off current IT investments

Automotive companies and customers need assurance that their data is safe.

Access to extremely private customer information (i.e. salary, financial data, insurance information, etc)



AARK Group

Source: Hoffman, Daniela. “Up in the air: cloud computing and the auto industry.” automotiveIT. 24 Nov. 2010. Web. 3 May 2011; Mentuccia, Luca. “Six Questions Every Automotive Executive Should Ask About Cloud Computing.” Accenture. 2010. Web. 3 May 2011.

High cost savings and improved efficiency, but costs of migration, integration, security too high to immediately move to cloud


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Financial services vertical analysis

Adopting cloud computing faster than any other industry. Eager for agility, flexibility, scalability.

Lack of specific government regulations

Highly saturated market

Already widely used throughout financial services industry: primarily for analysis, scalability.

Analytics

Additional transaction capacity

Platforms for standardized, efficient business processes

Major benefit from being able to scale up analytics or transaction capacity without heavy investment into physical servers.

Often random peaks of demand that must be met: from spikes in trading volume, credit card purchases

72% of financial services executives surveyed say that cloud enables processes otherwise not cost-effective or feasible

Many risks to consider: financial service institutions dependent upon reliability.

Financial risk, regulatory risk, security risk, performance risk, etc.

Potential loss of information when accessing data across applications

Dependence upon constant, seamless connection to cloud—cannot afford to experience outages

Any data or system moved to cloud typically has a high degree of integration with other applications.

Custom coding will likely be required to integrate new cloud applications with custom applications

Protection of customer, transactional financial information is crucial to the institution’s reputation.

Culture of keeping data close: lack of visibility typically associated with lack of security

Will need to build in data sensitivity tags and appropriate security



AARK Group


Strong potential and movement of general data, still major doubts about security, performance, reliability


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Government vertical analysis

Budgetary pressures on U.S. government has driven agencies to look into low cost alternatives.

U.S. plans to consolidate many of its websites, data centers and processes

– Systems valued at $20 billion may move to cloud

Government mandate that certain agencies migrate services to cloud within next 2.5 years

Primarily used to help federal government agencies reduce the cost, complexity, risk and time associated with modernizing legacy software applications.

Cloud-based email is most common application

Collaboration tools

Many redundant data centers that the U.S. government is looking to consolidate.

U.S. General Services Administration switch to cloud-based email estimated to save $15 million over five years

Complicated bureaucratic processes and regulations. High value information target for hackers.

Complex legacy system requires costly redesign for cloud

Struggle with inter/intra agency politics

Microsoft, Amazon & Google already intensely battling over government contracts

Government agencies often complex and highly integrated with other agencies.

Difficult to isolate singular applications to move to the cloud, or integrate with interlinked government applications

Potential difficulties: must adhere to FISMA, ensure that they are following government regulations

Government data and information is highly confidential. Protection of both citizen and government data is essential.

Hesitation about relinquishing physical possession and control over data

Very high security needed, especially for sensitive material

Need to ensure that cloud storage is appropriate for level of security (i.e. region/country of data center location)



AARK Group

Source: “Google nips Microsoft as government agencies move to the cloud.” 7 Dec. 2010. Reuters. Web. 4 May 2011; Jamrisko, Michelle. “U.S. CIO Kundra Says Government is Shutting 137 Data Centers.” 27 Apr. 2011. Bloomberg. Web. 4 May 2011; Davies, Gwil, et al. “Six questions every government executive should ask about cloud computing.” 2010. Accenture. Web. 4 May 2011.

Strong movement to the cloud, but intense competition and complex migration process


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Health Services Vertical Analysis

Significant process and care of quality benefits. Existing desire for electronic records system.

Consumer-oriented cloud applications likely to be well-received, useful

Need to improve collaboration across organizations

Movement towards electronic health records system

Limited usage in diagnostics, transfer of information between hospitals.

Sharing of radiology files at UC Sand Diego Health System

Top cloud usages:

– Data storage and analysis

– Backing up data

– Storing & archiving large files

– Analyzing data for R&D

Savings in data storage, IT support, coordination between record transfers.

Massive amounts of data storage: patient history, appointments, lab results, etc.

Eliminates potential file redundancy

Lowers high capital & operating costs

Analysis needed for huge quantities of data

Industry is most conscious of data security, privacy, confidentiality.

78% of executives concerned / very concerned about these issues

Industry leaders need to adopt before costs of migration are justified: greatest benefit is integration across institutions.

Costs of migrating to the cloud not only include recoding legacy systems, but converting physical records to electronic

High level of data security needed: medical records are considered one of the most sensitive types of information.

Lack of trust that cloud technology can provide adequate data protection

Questions regarding legality of moving patient information to cloud



AARK Group


Greatest potential, but strong movement to cloud not likely within next 10 years


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Retail Vertical: Sub-sections and Functions

AARK Group

Customer Fulfillment Merchandising Supply Chain Corporate Services

Physical store buy / sell Assortment planning BI / analytics Financial management

Store planning / layouts Allocations Logistics (warehouse management)

Tax reporting

Staffing management Buying Vendor-managed inventory Regulatory / compliance

Customer engagement Pricing management Inventory management IT

Sales (physical & online) Marketing HR

Inventory management Market research PR & investor

Vendor management

Retail Capability Map

Source: Fenwick, Nigel, et al. “Industry Innovation: Retail.” 28 July 2010: 3. Forrester. Web. 2 May 2011.


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Core Functions of Retail Business

Source: Mojica, Michael, et al. “Six Questions Every Retail Executive Should Ask About Cloud Computing.” 2010. Accenture. Web. 3 May 2011.

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Retail Industry: Top to Bottom Needs

In order to provide their customers with the best products and services retailers must be able to store and analyze information about the most current styles and trends.

Scalable space to accommodate seasonal sales data without spending a fortune on servers

Quick process and analysis to help meet customer demand

Trend analysis can guide price management to maximize profit

Supply chain interaction can make or break a retailer. Improving inventory management and streamlining supply chain communication can save the company time and money.

Just-in-Time management will reduce excess inventory, shortages and storage cost

Open communication between retailers and manufacturers will help both make more accurate forecasts

Cloud computing frees up corporate labor and capital and allows the company to focus on core business.

Only pay for the space needed instead of making high fixed payment for servers

Services provided by PaaS reduces the responsibilities of the IT department

Supply Chain Corporate Services

Customer Fulfillment Merchandising

AARK Group

In retail, pleasing customers is the number one priority. Cloud computing lets retailers engage and communicate with their customers.

Store customer information and communication on the cloud

Create a space for customers to interact with the company

Host promotions without spending more on servers


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Retail Industry Attitude Towards Cloud Computing

Source: “Cloud Infrastructure-As-A-Service: Interest and Adoption By Industry.” Forrester Research, Inc., May 2009.

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Competitively Pricing Project BlueSky’s Usage Rates

AARK Group

Project Blue Sky Google App Engine Amazon Web Services Microsoft Windows Azure

$10 per user, per month

Max $2,000/month

$8 per user, per month

max $1,000 / month

Standard On-Demand Instances

[Windows] S: $0.12 / hr. L: $0.48 / hr. XL: $0.96 / hr.

[Linux/UNIX] S: $0.085 / hr. L: $0.34 / hr. XL: $0.68 / hr.

Compute (instances)

XS: $0.05 / hr. S: $0.12 / hr. M: $0.24 / hr. L: $0.48 / hr. XL: $0.96 / hr.

Outgoing Bandwidth: $0.12 / GB

Incoming Bandwidth: $0.10 / GB

Outgoing Bandwidth: $0.12 / GB

Incoming Bandwidth: $0.10 / GB

Data Transfer

$0.10 / GB in. $0.00 for first GB /

month. $0.15 / GB / month.

Data Transfers

$0.10 / GB in. $0.15 / GB out.

CPU Time

$0.10 / CPU hour

CPU Time

$0.10 / CPU hour

Elastic Load Balancing

$0.025 / Elastic Load Balancer- hour (or partial hour)

Virtual Network: free during CTP

Stored Data

$0.15 / GB / month

Stored Data

$0.15 / GB / month

Amazon S3 (Storage)

$0.14 / GB

Storage

$0.15 / GB / month

$0.01 / 10K storage transactions

High Replication Storage

$0.45 / GB / month

High Replication Storage

$0.45 / GB / month

Amazon Route 53 (zone hosting)

$1.00 / hosted zone

Access Control

$1.99 / 100K transactions

Recipients Emailed

$0.0001 / recipient

Recipients Emailed

$0.0001 / recipient

CloudFront (Content Delivery)

$0.150 / GB out

Content Delivery Network

$0.15 / GB

$0.01 / 10K transactions

Always On

$0.30 / daily

AWS Premium Support

Bronze: $49 / month. Silver: > $100. Gold: > $400. Platinum: > $15K

Cloud Computing Industry Usage Rates

Source: “Google App Engine.” Google App Engine. Google, n.d. Web. 1 May 2011; “AWS Free Usage Tier.” Amazon Web Services. Amazon, n.d. Web. 1 May 2011; “Free* Windows Azure Platform Trial.” Windows Azure. Microsoft, n.d. Web. 1 May 2011


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Project BlueSky Free Trial Offer

AARK Group

Project Blue Sky Google App Engine (per month) Amazon Web Services (per month) Microsoft Windows Azure

750 hrs of compute instances 500 MB of storage 750 hrs of Amazon EC2 Linux Micro Instance usage

613 MB of memory

750 hrs of XS compute instance

25 hrs of S compute instance

1 GB BlueSky database storage 5 million page views 25 Amazon SimpleDB Machine hrs

1 GB of storage

1 GB Web Edition database

10 GB of storage

30K total storage transactions

5 GB Amazon S3 standard storage

20K Get Requests, 2K Put Requests

20 GB of storage

50K storage transactions

Data Transfers

20 GB transfers in

20 GB transfers out

750 hrs of Elastic Load Balancer

15 GB data processing

100K Access Control transactions

Text line

Bullet

10 Amazon Cloudwatch alarms 2 service bus connections

Premium Support

Free one-on-one support for usage > $200 / month

Free general access to BlueSky help consultants

10 GB of Amazon Elastic Block Storage

1 million I/Os, 1 GB snapshot storage, 10K snapshot Get Requests, 1K snapshot Put Requests

128 MB cache

Data Transfers

15 GB transfers in

15 GB transfers out

Data Transfers

20 GB transfers in

20 GB transfers out

Cloud Computing Industry Free Trial Offers

Source: “Google App Engine.” Google App Engine. Google, n.d. Web. 1 May 2011; “AWS Free Usage Tier.” Amazon Web Services. Amazon, n.d. Web. 1 May 2011; “Free* Windows Azure Platform Trial.” Windows Azure. Microsoft, n.d. Web. 1 May 2011


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

AARK Group

Basis of Differentiation Plan: Offer Support and Services

Have interested clients complete a survey in order to determine their specific, individual needs.

Example:

Size of application(s)

Development needed to transition to cloud

Integration needs

Pattern of usage demand

Recommend most helpful cloud solutions, PaaS tools and components, etc.

Example:

Sample code

Toolkits for application

Public data sets

Tutorials, videos, workshops

Provide recommendations for most optimal application development strategies.

Example:

Virtual resource redundancy

“Design for failure” model

Establish cost ceilings

Tutorials, workshops

Cloud computing’s motto has been, “In the cloud, anything is possible.” Cloud service providers often offer a wide array of abstract pieces that developers can choose from to help develop their cloud applications. However, as cloud computing is a relatively new technology, developers may struggle to determine which tools and components are best for their purpose. BlueSky will offer developers a starting point and support for application development based upon their specific needs.

Support for developers who may need assistance making transition to cloud.

Example:

Community forums

Free access to BlueSky IT consultant (via online help)

One-on-one support if monthly usage > $100

Diagnose Cloud Needs Recommendations Development Support Implementation Support

Differentiate by Pairing Commodity with Service


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Basis for evaluation criteria weights

Source: Harris, Jeanne G. and Alter, Allan E. “Cloudrise: Rewards and Risks at the Dawn of Cloud Computing.” Accenture Research Report. 2010 Nov.

Assumption

Lack of any of these major factors will decrease the likelihood of cloud-computing adoption.

AARK Group


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Financial Analysis: Net Income and NPV

AARK Group

Projected Financials

Source: “Platform-As-A-Service Market Sizing.” Forrester Research, Inc., July 2009.

"Dell to invest $1 billion in data centers." 7 Apr. 2011. Associated Press. 4 May 2011.

“Maximize Your Energy Savings From Server Virtualization With Three Process Improvements.” Forrester Research, Inc. August 2010.

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Total PaaS Revenue Forecast 2.13 4.86 8.90 11.82 13.76 15.18 16.74 18.24 19.71 21.14 22.43

Comparny X PaaS Revenue 0.43 1.04 2.04 2.90 3.61 4.26 4.93 5.63 6.36 7.07 7.77

BlueSky revenue 0.00 0.07 0.26 0.53 0.86 1.22 1.58 1.98 2.41 2.84 3.29Costs (2.50) (0.40) (0.42) (0.45) (0.48) (0.50) (0.54) (0.57) (0.60) (0.64) (0.68)

NI (2.50) (0.33) (0.17) 0.08 0.38 0.72 1.05 1.41 1.81 2.21 2.61

NPV ($2.50) ($0.32) ($0.15) $0.07 $0.32 $0.59 $0.83 $1.07 $1.33 $1.55 $1.76Cumulative NPV ($2.50) ($2.82) ($2.97) ($2.90) ($2.58) ($1.99) ($1.16) ($0.09) $1.24 $2.79 $4.55


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

AARK Group

Forecast of PaaS Market

Forecast: Global PaaS Spending By Segment


Assumption

As a major player we currently hold approximately 20% of the PaaS market as a whole (using SalesForce’s Force.com as an approximate equivalent).

Projected BlueSky PaaS Revenue


2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Operating Income, Revenues & Expenses

AARK Group

Projected PaaS Revenue



2011

Del

oitte

UW

Cas

e C

halle

nge

Pre

sent

atio

n T

empl

ate.

ppt

Sensitivity Analysis: Comparison of NPV

AARK Group

Projected PaaS Revenue with 7% Growth

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021BlueSky revenue 0.00 0.07 0.26 0.53 0.86 1.22 1.58 1.98 2.41 2.84 3.29Costs (2.50) (0.40) (0.42) (0.45) (0.48) (0.50) (0.54) (0.57) (0.60) (0.64) (0.68)NI (2.50) (0.33) (0.17) 0.08 0.38 0.72 1.05 1.41 1.81 2.21 2.61NPV ($2.50) ($0.32) ($0.15) $0.07 $0.32 $0.59 $0.83 $1.07 $1.33 $1.55 $1.76Cumulative NPV ($2.50) ($2.82) ($2.97) ($2.90) ($2.58) ($1.99) ($1.16) ($0.09) $1.24 $2.79 $4.55

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021BlueSky revenue 0.00 0.06 0.22 0.45 0.72 1.03 1.37 1.74 2.16 2.57 3.00Costs (2.50) (0.40) (0.42) (0.45) (0.48) (0.50) (0.54) (0.57) (0.60) (0.64) (0.68)NI (2.50) (0.34) (0.20) 0.00 0.25 0.52 0.83 1.18 1.56 1.93 2.32NPV ($2.50) ($0.33) ($0.19) $0.00 $0.21 $0.43 $0.66 $0.89 $1.14 $1.36 $1.57Cumulative NPV ($2.50) ($2.83) ($3.02) ($3.02) ($2.81) ($2.38) ($1.72) ($0.82) $0.32 $1.67 $3.24


2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021BlueSky revenue 0.00 0.05 0.18 0.37 0.59 0.84 1.16 1.52 1.92 2.31 2.72Costs (2.50) (0.40) (0.42) (0.45) (0.48) (0.50) (0.54) (0.57) (0.60) (0.64) (0.68)NI (2.50) (0.35) (0.24) (0.08) 0.12 0.33 0.62 0.95 1.32 1.67 2.04NPV ($2.50) ($0.34) ($0.22) ($0.07) $0.10 $0.27 $0.49 $0.72 $0.96 $1.18 $1.38Cumulative NPV ($2.50) ($2.84) ($3.06) ($3.13) ($3.03) ($2.76) ($2.26) ($1.54) ($0.58) $0.60 $1.98


aark group final deloitte presentation

Documents