Date: May 4 th, 2011 Collaboration in the Cloud An Exploration of Cloud Applications in Vertical...

Date: May 4th, 2011

Collaboration in the Cloud

An Exploration of Cloud Applications in Vertical Industries

- 2 - Project BlueSky

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Project Blue Sky was undertaken to double the revenue of the cloud computing business in 10 years

As Deloitte consultants, we were asked to conduct a week-long assessment of the cloud computing market and make recommendations on the most attractive industry vertical

The Three Types of Cloud Computing:

Running head

Cloud Computing is the Cost-Saving, Scalable Platform of the Future

Infrastructure as a Service:

Compute, storage, network, and operations

resources

Platform as a Service:

Tools and environments to build applications

and services

Software as a Service:

On-demand use of software


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Running head

Industry Ratings & Analysis

Time to Implementation: 4

– Somewhat Integrated already; Moderate awareness

Market Growth Rate: 4

– 7.4%

Risk Tolerance: 4

– Mid/Low Information Sensitivity

Decentralization: 3

– Combo of Sm & Lg companies

% Change in IT Spending: 4

– 4.2%

Arts & Entertainment


– High awareness & cloud integration intentions


– 10.3%

Risk Tolerance: 3

– Moderate Information Sensitivity

Decentralization: 5

– Many players involved


– 3.4%

Life Sciences


– Policy Restraints


– 3%

Risk Tolerance: 1

– High Information Sensitivity

Decentralization: 1

– One main player


– 1.1%

Government


– Lack of Infrastructure


– 6 %

Risk Tolerance: 5

– Moderate Information Sensitivity

Decentralization: 5

– Many players involved


– 3.4%

Retail

Despite the existence of many attractive markets, Life Sciences emerged as the industry with the most promising opportunities for your company

Sources: Gartner: 2011 Top IaaS predictions, 2011.; Deloitte: Choices and Capabilities in Life Sciences, 2011.; Deloitte: Future of the Life Sciences Industry, 2009.; IBM: The Wisdom of the Cloud, 2011.; HP: Cloud Computing in the Media & Entertainment Industry, 2011.; US CIO: Federal Cloud Computing Strategy.; Forrester: Industry Innovation in Retail, 2011.

AVERAGE: 4.2 AVERAGE: 1.2 AVERAGE: 3.8AVERAGE: 3.8


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Life Sciences is an Industry with Growing Demand for Cloud Computing and Many Unmet Customer Needs

Running head

Soucre: Deloitte Life Sciences White Papers

Implicit industry trends that drive the need for cloud computing

Rising demand for clinical trials and trial research

Push for faster development of drugs

Growing market for advanced drugs

Increase in outsourcing of company functions to global locations

Explicit needs for cloud computing within Life Sciences

Need for large amounts of data storage

Need to reduce costs

Need for continuous innovation

Changing Landscape within Life Sciences

Industry consolidation

Mergers and acquisitions across the industry

Entrance into new markets


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Running head

Application of the Cloud Within the Life Sciences Industry

Utilizes IaaS

Specific application example:

– Computing a large quantity of data, such as DNA, with more speed and efficiency

Benefits Derived:

– Ease in modeling and simulation

– Analyzing clinical trials

– Computational research and testing

Utilizes IaaS

Specific application example:

– Accessing research data from a different organization and collaborating

Benefits Derived:

– Research partnering

– Clinical trial partnering

– Joint sales and marketing

Collaboration Analytics

Utilizes PaaS

Benefits Derived:

– User acceptance testing

– Large system stress testing

Development Tool

Utilizing the Cloud

Sources: IBM Global Business ServicesThe Wisdom of the Cloud 2010


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Running head

Application of the Cloud: Top-down Industry Model

How can the cloud help the Life Science industry as a whole?

Create a communication channel between

– Consumers and R&D

– Marketing and R&D

Examples of cloud usage in this vertical model.

A web application for consumers to interact with pharmaceutical companies

– Provide feedback, product ideas, concerns, etc.

A web application for doctors to submit patient data and prescription information

R&D Manufacture Design Distribution Consumer

Source: Rhodes, John, and Dean Arnold. "The Future of the Life Sciences Industries: Transformation amid Rising Risk." (March 2009). Web.


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Running head

Positioning The Company & Services: “We Have a Prescription for You!” Campaign

Educate our sales team about the:

– Life Sciences industry as a whole

– Specific customer needs within the industry

– Tangible and intangible benefits of cloud computing within this industry

Raise Awareness and Build Brand Loyalty through:

– Ads in Biotech/ Pharmaceutical magazines

– Sponsorship of a Symposium

Set Goals for the Sales Team

– Quotas for partnerships

– Hosting workshops

– Attending marketing events

Promote Specific Benefits through:

– Direct Personal Selling to larger companies

– Participating in product showcases among large companies

Sales Team Education

Launch Marketing Campaign

1

2

Proposed Company Revenue ModelComputing Rates

Standard On-Demand Instances

Small Instance Medium Instance Large Instance$0.01 $0.14 $0.40

$0.12 $0.25 $0.50

Hi-Memory On-Demand InstancesExtra Large Double Extra Large Quadruple Extra Large

$0.50 $1.15 $2.28

$0.70 $1.40 $2.76

Hi-CPU On-Demand InstancesMedium Large Extra Large

$0.20 $0.60 $0.76

$0.30 $1.10 $1.30*These rates are per hour

StorageFirst 1 TB Next 100TB Next 500TB

$0.15/GB $0.12/GB $.110/GB*$0.01 per 10,000 storage transaction

Data TransferFirst 1 GB / month

Up to 10TB/ month

Next 100 TB/month

Transfer -in $0.100/GB $.100/GB $.100/GB

Transfer-out $0.000 / GB $0.150 / GB $0.90/GB


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Risks of Entering the Life Sciences Market and Ways to Mitigate Them

Deloitte white paper studies show R&D collaboration is favorable

Optimization of:

– Focus

– Cost

– Flexibility

Education and awareness program through sales team

Elements of Cloud Computing

Security Guarantee• Warranty/Insurance

Sales team educates client on how entire aspect of the cloud works

Support Team

Making specific benefits of the cloud clear to the industry

Personal Selling

Scientific Magazines• Biotech magazines

Symposium Sponsorships

Sensitivity of Info Conflicts of Interest Transparency Lack of Awareness

Training of Sales Team

Goal Setting for Sales Team

Launch of Marketing Campaign to Raise Awareness & Increase Brand Loyalty

Implementation of Collaboration and Analytics within the Industry ( Iaas)

Implementation of the Development Tool (Paas)

International Expansion Re-evaluation

Present: 2011 Year 1: 2012 Year 2: 2013 Header: 2014

Timeline of Project BlueSky


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Full Cloud Computing Integration in a Vertical Market

Life Sciences presents an

opportunity to vertically integrate

because of the unmet customer needs within the

market

Running head

Cost Reduction

Data Storage

Innovation Because of Implicit Industry

trends towards the cloud, the following

applications can be used

Collaboration

Analytics

Development

We can use these three applications to tighten the linkages within the industry from R & D all the way to Consumer with a top- down cloud computing approach

21

2

3

Sales Team Education

Launch Marketing Campaign

1 2

OPERATIONS WITHIN THE COMPANY

By the successful implementation of cloud computing within the attractive Life Sciences vertical market, we will be able to double revenues of the company within

the next ten years


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Main Presentation

Analysis of the Cloud Computing Industry Today

Industry Ratings and Analysis

Defining the Life Sciences Industry

Demands and Needs for Cloud Computing Within Life Sciences

Applications of the Cloud Within Life Sciences

Application of the Cloud: Top Down Industry Model

Positioning the Company and Services

Risks and Mitigation / Timeline

Conclusion

Appendix Items

Industry Analysis Metrics

SWOT Analysis of the Company

Major Players in Cloud Computing

Major Life Sciences Companies

Marketing and Raising Awareness

Project Life Cycle

Projected Costs of Positioning Company Strategically

Questions?


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Running head

SWOT Analysis of Company

Industry-specific know how for various vertical markets is lacking

Corporate Strategy in relation to expansion is not clearly outlined

Integration in to attractive vertical markets

Expansion of sales strategy

Expansion of industry-specific employee training & Education

Privacy/ Sensitivity of Information

Initial hesitance to Collaborate because of perceived conflicts of interest

Transparency within the Industry

Existing Sales Infrastructure

Existing Brand Awareness

Pioneered IaaS within the cloud computing industry

Expansion of brand awareness strategies

Offering innovative applications of cloud computing within Life Sciences

Eventual international expansion

Brand Awareness within a specific industry Bullet

Strengths

Weaknesses

Opportunities

Threats

Strong presence in the cloud computing market

Resources Allocated for Project Blue Sky

Constantly looking for innovative strategies

Separate costs will be incurred for each market entered due to varying industry-specific information


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Running head

Industry Analysis Metrics

The projected time it will take for an industry to integrate at a desirable level.

Ranking 1 to 5

– 5 being ideal ( shorter time to implementation)

– 1 being not ideal (longer time to implementation)

The rate at which the market is projected to grow

Ranking 1 to 5

– 5 being ideal (high market growth rate)

– 1 being not ideal (low market growth rate)

Time to Implementation Market Growth Rate

Decentralization is classified by the number of players within an industry. More players results in a more decentralized industry.

Ranking 1 to 5

– 5 being ideal (Greater levels of decentralization)

– 1 being not ideal (lower levels of decentralization

The amount of risk an industry would be willing to take on. High Risk Tolerance signifies a greater willingness to take on risk.

Ranking 1 to 5

– 5 being ideal (high risk tolerance)

– 1 being not ideal (low risk tolerance

Projected percent change in amount of IT spending within each industry from 2010 to 2011

Ranking 1 to 5

– 5 being ideal (high % change in IT spending)

– 1 being not ideal (low % change in IT spending)

Risk ToleranceDecentralization of

IndustryPercent Change in

IT Spending


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Running head

Major Players in Cloud Computing

Amazon Web Services

Amazon Elastic Compute Cloud

– Dependable

– Flexible

Microsoft Azure

Focus on development not infrastructure

Build applications in several different programming languages

Salesforce.com

CRM application

– Worlds #1 sales application

RackSpace

Highly Scalable

Excellent Support

Google AppEngine

Run web applications on Google’s infrastructure

– No Hassel when building new web apps.

– Free for small web applications

Workday

Complete Suite of Business Management Services

– Human Capital Resources

– Payroll

– Financial Management

Infrastructure as a Service

Platform as a Service

Software as a Service


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Major Life Science Companies

Running head

Pharmaceutical Medical Devices Healthcare Biotechnology

Johnson & Johnson United States Surgical UnitedHealth Group Amgen

Pfizer Boston Scientific WellPoint Genetech

Roche Stryker Corp Aetna Gilead Sciences

GlaxoSmithKline CareFusion Corp Humana Biogen Idec

Novartis Zimmer Holdings Cigna Cephalon

Sanofi-Aventis Synthes Inc Blue Cross and Blue Shield Medlmmune

The Westaim Corporation Fresenius Medical Care Holdings Physical Medicine Associates Taconic Farms, Inc

Cornerstone Therapeutics Philips Healthcare Enduracare Therapy Management Wellmark Int Farnam Co

Alexza Pharmaceuticals Becton, Dickinson and Company Regional Health Services, Inc Mediatech, Inc

Theracance, Inc Medline Industries Tirr Systems Inc Suther Feeds

Elixir Pharmaceuticals Bausch & Lomb Incorporated Paragon Acquisition, Inc. Synthetech, Inc

Source: Fortune Magazine 2009Source: Hoovers.com


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Running head

Marketing: Raising awareness and Helping Improve Operations

Who to target?

– Key decision makers in companies• Science Daily• Biotech Magazines

Bullet

– Dash• Subbullet

What channels of media to use?

– Sponsorship of symposiums

– Magazine Ads

– Product show booths

Bullet

– Dash• Subbullet

What is the reach of media channels?

– Science Magazines• 1,000,000

– Sponsorship of symposiums• 1,000

– Product show booths• 5,000

3

1 4

2 5


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Target industries heavy in R&D primarily and manufacturing

Distribution

– Channels added as cloud computing grows and demand increases

Product Life Cycle: Determining the State of the Current Market

Life Sciences as an industry is growing at a 10% rate

Focus should be on building brand preference and maximize market share

Cloud computing services will target R&D firms primarily, but expand services as market grows

Cloud Computing

– IaaS/SaaS and PaaS offered• Increasing service opportunities from IaaS/SaaS to PaaS• Warranties and support services

Life Cycle Stage Product

Promotion

Running head

Life Sciences


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Projected Costs for Strategic Positioning of Cloud Computing Within Life SciencesA

mo

un

t in

Do

lla

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in

mill

ion

s)

Projected Costs for Implementing Strategy

Sales and Marketing Expenses

Key Cost Assumptions (in millions)

2010 Business Division Comparable Revenue (MSFT) - $18642

2010 Expected Sales and Marketing Expense - $3914.82

Sales and Marketing as Percent of Revenue – 21%

Expected Push in Sales and Marketing First Year - 2.50%

Percentage Growth Per Year - 1%

Time to Action for 2011 – 6 months

Key Assumptions About Cloud Computing Company

Major player in the industry comparable to Microsoft Corporation or Amazon

Proposed changes reflect current activities of the Microsoft Corporation Business Division Revenue

Source: Microsoft Corporation 2010 10-K Report

Classification of Sales and Marketing Expenses

Sales and marketing expenses include payroll, employee benefits, and other headcount-related expenses associated with sales and marketing personnel and the costs of advertising, promotions, tradeshows, seminars, and other programs

Date: May 4 th, 2011 Collaboration in the Cloud An Exploration of Cloud Applications in Vertical...

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