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May 4 th, 2011 Cloud Computing Market Analysis Driving adoption of Project BlueSky in the Retail Industry: A Vertical Market Approach Slide 2 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 Slide 3 - 3 - Project BlueSky UWCC_SamplePresentation3.pptx 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 periods 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 Slide 4 - 4 - Project BlueSky UWCC_SamplePresentation3.pptx 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 retails 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 PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationNeeds 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 preferencesprofitability is contingent upon meeting demand. $4 trillion in revenue, steady growth Studies show retailers are more interested in adopting cloud services AARK Group Slide 5 - 5 - Project BlueSky UWCC_SamplePresentation3.pptx Problems faced by the retail industry and BlueSkys 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 customers experience cultivates a stronger likelihood for repeat business: storing customer data has allowed retailers to more easily personalize a customers 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 & MarkdownsHigh Customer Service Expectations Transaction FlexibilityChanging Customer Preference Often experiences single high volume days. Meeting a single periods 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 Slide 6 - 6 - Project BlueSky UWCC_SamplePresentation3.pptx Differentiate by ensuring BlueSkys 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 BlueSkys 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 Slide 7 - 7 - Project BlueSky UWCC_SamplePresentation3.pptx 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 Source: Market Share Growth Operating Income AARK Group Slide 8 - 8 - Project BlueSky UWCC_SamplePresentation3.pptx Risks and challenges that may hinder BlueSkys 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 Amazons 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 supportteach users how to properly develop their applications Economic DownturnControl and SecurityConsumer Confidence RegulationUser 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. Slide 9 - 9 - Project BlueSky UWCC_SamplePresentation3.pptx Timeline to implementation of BlueSky in the retail industry Major Goals & Strategic Promotion Plan 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 Evaluation Points 10987654321 BlueSky PaaS Offering Timeline AARK Group Slide 10 Questions? Slide 11 Appendix Proposed Project BlueSky Usage Rates Proposed Project BlueSky Free Trial Offer Differentiation Strategy: offering services & support Evaluation Criteria Potential Cloud Computing Verticals RetailRetail AutomotiveAutomotive Financial ServicesFinancial Services GovernmentGovernment Health ServicesHealth Services Retail Industry Vertical Analysis Retail Vertical: Sub-sections and FunctionsRetail Vertical: Sub-sections and Functions Basic core functionsBasic core functions Top to Bottom NeedsTop to Bottom Needs Attitude towards cloud computingAttitude towards cloud computing Financial Analysis Net Income and NPVNet Income and NPV Forecast of PaaS MarketForecast of PaaS Market Operating IncomeOperating Income Sensitivity AnalysisSensitivity Analysis AnalysisImplementationFinancials AARK Group Slide 12 - 12 - Project BlueSky UWCC_SamplePresentation3.pptx Evaluative analysis of potential cloud computing industry verticals Weight Financial ServicesAutomotive High Tech & Communications Government Health Services Retail Cost Savings35%3.02.93.43.52.72.9 Long-term cloud growth 15%2.02.41.52.71.64.1 Cost of migration 15%2.83.11.42.22.02.1 Varied usage demand 10%1.72.63.2 2.74.8 Data control10%1.52.1 1.31.12.0 Market saturation 5%2.71.80.3 0.93.2 Improved productivity 5%4.23.02.93.42.83.1 Openness to cloud services 5%3.63.23.53.41.93.7 TOTAL 100% 2.842.712.492.772.153.13 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 Slide 13 - 13 - Project BlueSky UWCC_SamplePresentation3.pptx Retail vertical industry analysis: cloud computing is not a matter of if, but when Retail industry driven by constantly changing customer demands, tastes, and preferencesprofitability 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 retails highly variable nature. No longer need to pay for additional hardware to meet just a single days 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 Industry PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationImportance 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. Slide 14 - 14 - Project BlueSky UWCC_SamplePresentation3.pptx 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 vehicle 2. Community clouds for supply chain coordination 3. 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) Industry PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationImportance of Data Security 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 Slide 15 - 15 - Project BlueSky UWCC_SamplePresentation3.pptx 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 cloudcannot 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 institutions 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 Industry PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationImportance of Data Security 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. Strong potential and movement of general data, still major doubts about security, performance, reliability Slide 16 - 16 - Project BlueSky UWCC_SamplePresentation3.pptx 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) Industry PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationImportance of Data Security 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 Slide 17 - 17 - Project BlueSky UWCC_SamplePresentation3.pptx 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 Industry PotentialCurrent Cloud ApplicationsPotential Cost Savings RisksCost of MigrationImportance of Data Security 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. Greatest potential, but strong movement to cloud not likely within next 10 years Slide 18 - 18 - Project BlueSky UWCC_SamplePresentation3.pptx Retail Vertical: Sub-sections and Functions AARK Group Customer FulfillmentMerchandisingSupply ChainCorporate Services Physical store buy / sellAssortment planningBI / analyticsFinancial management Store planning / layoutsAllocations Logistics (warehouse management) Tax reporting Staffing managementBuyingVendor-managed inventoryRegulatory / compliance Customer engagementPricing managementInventory managementIT Sales (physical & online)MarketingHR Inventory managementMarket researchPR & investor Vendor management Retail Capability Map Source: Fenwick, Nigel, et al. Industry Innovation: Retail. 28 July 2010: 3. Forrester. Web. 2 May 2011. Slide 19 - 19 - Project BlueSky UWCC_SamplePresentation3.pptx 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 Slide 20 - 20 - Project BlueSky UWCC_SamplePresentation3.pptx 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 ChainCorporate Services Customer FulfillmentMerchandising 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 Slide 21 - 21 - Project BlueSky UWCC_SamplePresentation3.pptx Retail Industry Attitude Towards Cloud Computing Source: Cloud Infrastructure-As-A-Service: Interest and Adoption By Industry. Forrester Research, Inc., May 2009. AARK Group Slide 22 - 22 - Project BlueSky UWCC_SamplePresentation3.pptx Competitively Pricing Project BlueSkys Usage Rates AARK Group Project Blue SkyGoogle App EngineAmazon Web ServicesMicrosoft 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 Slide 23 - 23 - Project BlueSky UWCC_SamplePresentation3.pptx Project BlueSky Free Trial Offer AARK Group Project Blue SkyGoogle App Engine (per month) Amazon Web Services (per month) Microsoft Windows Azure 750 hrs of compute instances500 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 storage5 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 Slide 24 - 24 - Project BlueSky UWCC_SamplePresentation3.pptx 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 computings 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 Slide 25 - 25 - Project BlueSky UWCC_SamplePresentation3.pptx 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 Slide 26 - 26 - Project BlueSky UWCC_SamplePresentation3.pptx 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. Slide 27 - 27 - Project BlueSky UWCC_SamplePresentation3.pptx AARK Group Forecast of PaaS Market Forecast: Global PaaS Spending By Segment Source: Platform-As-A-Service Market Sizing. Forrester Research, Inc., July 2009. Assumption As a major player we currently hold approximately 20% of the PaaS market as a whole (using SalesForces Force.com as an approximate equivalent). Projected BlueSky PaaS Revenue Slide 28 - 28 - Project BlueSky UWCC_SamplePresentation3.pptx Operating Income, Revenues & Expenses AARK Group Projected PaaS Revenue Source: Platform-As-A-Service Market Sizing. Forrester Research, Inc., July 2009. Slide 29 - 29 - Project BlueSky UWCC_SamplePresentation3.pptx Sensitivity Analysis: Comparison of NPV AARK Group Projected PaaS Revenue with 7% Growth Projected PaaS Revenue with 6% Growth Projected PaaS Revenue with 5% Growth