AARK Group Final Deloitte Presentation
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Transcript of 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
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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
- 4 -- 4 - Project BlueSky
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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
- 5 -- 5 - Project BlueSky
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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
- 6 -- 6 - Project BlueSky
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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
- 7 -- 7 - Project BlueSky
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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
- 8 -- 8 - Project BlueSky
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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.
- 9 -- 9 - Project BlueSky
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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
- 12 -- 12 - Project BlueSky
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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
- 13 -- 13 - Project BlueSky
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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
Industry Potential Current Cloud Applications Potential Cost Savings
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.
- 14 -- 14 - Project BlueSky
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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)
Industry Potential Current Cloud Applications Potential Cost Savings
Risks Cost of Migration Importance 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
- 15 -- 15 - Project BlueSky
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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
Industry Potential Current Cloud Applications Potential Cost Savings
Risks Cost of Migration Importance 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
- 16 -- 16 - Project BlueSky
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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 Potential Current Cloud Applications Potential Cost Savings
Risks Cost of Migration Importance 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
- 17 -- 17 - Project BlueSky
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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 Potential Current Cloud Applications Potential Cost Savings
Risks Cost of Migration Importance 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
- 18 -- 18 - Project BlueSky
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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.
- 19 -- 19 - Project BlueSky
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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
- 20 -- 20 - Project BlueSky
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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
- 21 -- 21 - Project BlueSky
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Retail Industry Attitude Towards Cloud Computing
Source: “Cloud Infrastructure-As-A-Service: Interest and Adoption By Industry.” Forrester Research, Inc., May 2009.
AARK Group
- 22 -- 22 - Project BlueSky
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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
- 23 -- 23 - Project BlueSky
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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
- 24 -- 24 - Project BlueSky
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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
- 25 -- 25 - Project BlueSky
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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
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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
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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 SalesForce’s Force.com as an approximate equivalent).
Projected BlueSky PaaS Revenue
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Operating Income, Revenues & Expenses
AARK Group
Projected PaaS Revenue
Source: “Platform-As-A-Service Market Sizing.” Forrester Research, Inc., July 2009.
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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
Projected PaaS Revenue with 6% Growth
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
Projected PaaS Revenue with 5% Growth
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