Driving adoption of Project BlueSky in the Retail
Industry: A Vertical Market Approach
Cloud Computing Market Analysis
May 4th, 2011
Agenda
Provide recommendations on most attractive industry verticals which will allow the client to double its
cloud computing revenue over the next decade
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
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.
The Situation
Benefits of Cloud
Computing
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.
Drive adoption of Project BlueSky within the retail industry by offering more than just computing
power, but support and customized cloud recommendations as well
-3-
Project BlueSky
UWCC_SamplePresentation3.pptx
Challenges
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.
AARK Group
Analysis: retail industry & cloud computing is not a matter of “if”, but “when”
Industry Potential
Current Cloud Applications
Retail industry driven by constantly
changing customer demands, tastes, and
preferences—profitability is contingent
upon meeting demand.
Huge need for additional computing
power for analytics, product and service
innovation. Needed for core business.
 $4 trillion in revenue, steady growth
 Used to run web sites, mobile apps,
social media platforms
 Studies show retailers are more
interested in adopting cloud services
 Product and service innovation
Potential Cost Savings
Huge cost savings due to retail’s highly
variable nature.
 Typically using antiquated legacy
systems
 Enormous potential savings in storing
and maintaining data
 Analysis of customer, operational, R&D
data
Retail demand highly dependent upon
economy. Concerns with security of data.
 Industry manages large amounts of
data
Cost of Migration
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
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.
-4-
Needs of Retailers
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
Project BlueSky
UWCC_SamplePresentation3.pptx
Risks
AARK Group
Problems faced by the retail industry and BlueSky’s PaaS solutions
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.
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 decisionmaking.
With cloud computing, retailers can temporarily scale
transaction capacity without being locked into their
expensive capital investment.
Increased computing power allows companies to process
and analyze data quickly, thus providing greater agility in
adjusting supply to match the customer demand.
Inventory Shortages & Markdowns
High Customer Service Expectations
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.
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.
Inexpensive additional computing power allows companies
to increase their speed and agility to market for new
products and services.
Source: “Industry Profile: Retail Sector.” 21 Mar. 2011: n. pag. First Research. Web. 30 Apr. 2011.
-5-
Project BlueSky
UWCC_SamplePresentation3.pptx
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.
AARK Group
Differentiate by ensuring BlueSky’s services are more than just a commodity
Positioning Plan
Differentiation
Price
Promotion
Place
Create offers and
prices comparable to
major competitors
Educate decision
makers on cloud
computing
Advertise to retail
vertical, but tailor
message to individual
retail segments
Free Trials
Rates
Workshops
Advertisements
Org Partnerships
Representation
Free amount of
monthly usage &
features, standard
rates charged if
over threshold
Option to establish
cost ceiling, rates
charged if user
surpasses free
monthly allocation
Offer online classes
in cloud computing
& BlueSky
Advertisements of
BlueSky’s Iaas &
Paas, emphasize
service support
Partners such as
Association for
Retail Technology
Standards
Send BlueSky
representatives to
offer Paas services
to existing clients;
gain referrals
-6-
Project BlueSky
UWCC_SamplePresentation3.pptx
Diagnose customer needs and offer specific
cloud solutions and recommendations.
Additional support available for follow-up and
guidance if needed
AARK Group
Projected NPV of $6.61B, begin earning operating profits in 2013
Market Share Growth
Cumulative NPV
By entering into the retail market, BlueSky will increase its PaaS
market share by 15% over the next ten years.
$8
$6
 The PaaS market is projected to surpass $15 billion by 2016
Billions
$4
 IT spending in retail is expected to exceed $20 billion by 2014
$2
 The importance of technical innovation in the face of
customer demand will make cloud computing a priority in IT
spending
$0
($2)
($4)
Year
Source:
Operating Income
BlueSky Net Income
After the first two years of operating losses, 2013 will see a
positive net income and profits will continue to rise.
3
 BlueSky revenue is projected to increase over the ten years
as the PaaS market grows
2
1
 A high initial capital investment is necessary to set up data
centers across the country
0
(1)
(2)
(3)
Year
Source:
-7-
Project BlueSky
UWCC_SamplePresentation3.pptx
Net Income (Billions)
4
AARK Group
Risks and challenges that may hinder BlueSky’s adoption
Control and Security
Consumer Confidence
The economic downturn can reduce
willingness of industry to invest in new
projects.
Two major concerns of cloud computing
that have resonated across all industries
are control and security.
 Has reduced consumer spending and
retail revenues available for investment
 Back-up servers in different physical
locations will minimize potential effect
of server failure
Recent events concerning the failure of
major cloud computing service providers
have significantly shaken consumer
confidence in the security and reliability of
cloud computing.
 Higher interest rates and greater
difficulty obtain financing could make it
more difficult to fund cloud transition
 Mitigate by emphasizing potential cost
savings
Competitors
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
 Continuously monitoring the status of
the servers, much like Amazon’s
CloudWatch, will prevent hacking
before it occurs
Regulation
 Recommend encrypting data
 Emphasize that unlike traditional
physical servers, cloud applications
need redundant virtual resources:
“design for failure”
User Based Pitfalls
Government regulation and
standardization are necessary to inspire
consumer confidence and sustain long
term adoption.
Due to lack of training and guidance,
improper development of PaaS
applications can tarnish customer
experience.
 Establishment of security regulations
and certification will help mitigate the
concerns about cloud computing
 Proper application development can
help users avoid these pitfalls
 Lack of industry standards may created
difficulties transferring data between
cloud providers
 Mitigate by offering training and
support—teach users how to properly
develop their applications
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.
-8-
Project BlueSky
UWCC_SamplePresentation3.pptx
Economic Downturn
AARK Group
Timeline to implementation of BlueSky in the retail industry
BlueSky PaaS Offering Timeline
Major Goals & Strategic Promotion Plan
1
2
3
4
5
6
7
8
9
10
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)
Evaluation Points
-9-
Project BlueSky
UWCC_SamplePresentation3.pptx
 Periodic evaluation & adjustment of product
Questions?
AARK Group
Appendix
Analysis
Evaluation Criteria
Implementation
Proposed Project BlueSky Usage
Rates
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
Proposed Project BlueSky Free Trial
Offer
Differentiation Strategy: offering
services & support
Financials
Financial Analysis
– Net Income and NPV
– Forecast of PaaS Market
– Operating Income
– Sensitivity Analysis
AARK Group
Evaluative analysis of potential cloud computing industry verticals
Industries with Most Cloud Computing Potential
Financial Services
Automotive
High Tech &
Communications
Government
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
Source: Harris, Jeanne G. and Alter, Allan E. “Cloudrise: Rewards and Risks at the Dawn of Cloud Computing.”
Accenture. Nov 2010.
- 12 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Weight
AARK Group
Retail vertical industry analysis: cloud computing is not a matter of “if”, but “when”
Industry Potential
Current Cloud Applications
Potential Cost Savings
Retail industry driven by constantly
changing customer demands, tastes, and
preferences—profitability is contingent
upon meeting demand.
Huge need for additional computing
power for analytics, product and service
innovation. Needed for core business.
 Large pool of resources:
 4 in 10 companies see greatest
potential in improved decision making
 No longer need to pay for additional
hardware to meet just a single day’s
forecasted demand
 Used to run web sites, mobile apps,
social media platforms
 Enormous potential savings from
storing and maintaining data
 Over 1 million outlets in U.S. alone
 Product and service innovation
 Studies show retailers are more
interested in adopting cloud services
Risks
 Analysis customer, operational, R&D
data
 Typically using antiquated legacy
systems
Retail industry demand is highly
dependent upon the economy. Consumer
spending drastically decreases during
times of economic distress.
Retailers typically using antiquated
systems already in need of upgrading:
looking for low cost opportunities.
Industry manages large amounts of data
from: customers, products, stores, sales,
supply chain, marketing, etc.
 Struggles with efficiency highlighted
during economic recession: emphasis
on becoming leaner
 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
Huge cost savings due to retail’s highly
variable nature.
– $4 trillion in revenue, steady growth
 However, US retail sales rose 8% in
the first 3 months of 2011
Cost of Migration
 Retail industry expected to be slower
to adopt cloud computing
Importance of Data Security
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.
- 13 -
Project BlueSky
UWCC_SamplePresentation3.pptx
– Expected to spend $20 billion in
technology by 2014
AARK Group
Automotive vertical industry analysis
High cost savings and improved efficiency, but costs of migration, integration, security too high to
immediately move to cloud
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
Current Cloud Applications
Potential Cost Savings
Cloud applications used primarily to build
private sites. Also being used to link
consumers to vehicles.
Automotive OEMs still heavily reliant on
traditional ERP-systems for management
processes and applications.
 3 key fields of application:
 Need low cost opportunities to upgrade
capabilities, decrease operating costs
1. Integration into vehicle
2. Community clouds for supply chain
coordination
3. SAP operations
 China annual car sales: 8.6 million,
expected to triple to 30.2 million by 2020
Risks
Cost of Migration
The greatest hurdles to cloud adoption in
the automotive industry are security and
data privacy.
Automotive industry heavily relies upon its
existing system for analytics, supply chain
management, etc.
 Major concerns about losing physical
control and access to data: automotive
industry built around reputation
 High integration costs: existing legacy
systems will require a lot of custom
development to integrate with the cloud
 Currently experiencing major loss of
sales due to recession
 Intangibles: still major concerns of
risks, hesitation to write off current IT
investments
 Industry runs a lot of analytics: high
cost of servers, software licenses,
maintenance, data center space,
electricity, IT support
Importance of Data Security
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)
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.
- 14 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Industry Potential
AARK Group
Financial services vertical analysis
Strong potential and movement of general data, still major doubts about security, performance, reliability
Industry Potential
Current Cloud Applications
Potential Cost Savings
Adopting cloud computing faster than any
other industry. Eager for agility, flexibility,
scalability.
Already widely used throughout financial
services industry: primarily for analysis,
scalability.
Major benefit from being able to scale up
analytics or transaction capacity without
heavy investment into physical servers.
 Lack of specific government
regulations
 Analytics
 Often random peaks of demand that
must be met: from spikes in trading
volume, credit card purchases
 Platforms for standardized, efficient
business processes
 72% of financial services executives
surveyed say that cloud enables
processes otherwise not cost-effective
or feasible
Risks
Cost of Migration
Many risks to consider: financial service
institutions dependent upon reliability.
Any data or system moved to cloud
typically has a high degree of integration
with other applications.
Protection of customer, transactional
financial information is crucial to the
institution’s reputation.
 Custom coding will likely be required to
integrate new cloud applications with
custom applications
 Culture of keeping data close: lack of
visibility typically associated with lack
of security
 Financial risk, regulatory risk, security
risk, performance risk, etc.
 Potential loss of information when
accessing data across applications
Importance of Data Security
 Will need to build in data sensitivity
tags and appropriate security
 Dependence upon constant, seamless
connection to cloud—cannot afford to
experience outages
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.
- 15 -
Project BlueSky
UWCC_SamplePresentation3.pptx
 Highly saturated market
 Additional transaction capacity
AARK Group
Government vertical analysis
Strong movement to the cloud, but intense competition and complex migration process
Industry Potential
Current Cloud Applications
Budgetary pressures on U.S. government
has driven agencies to look into low cost
alternatives.
Primarily used to help federal government
agencies reduce the cost, complexity, risk
and time associated with modernizing
legacy software applications.
 U.S. plans to consolidate many of its
websites, data centers and processes
– Systems valued at $20 billion may move
to cloud
 Cloud-based email is most common
application
Potential Cost Savings
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
 Collaboration tools
 Government mandate that certain
agencies migrate services to cloud
within next 2.5 years
Risks
Cost of Migration
Importance of Data Security
Complicated bureaucratic processes and
regulations. High value information target
for hackers.
Government agencies often complex and
highly integrated with other agencies.
Government data and information is
highly confidential. Protection of both
citizen and government data is essential.
 Struggle with inter/intra agency politics
 Microsoft, Amazon & Google already
intensely battling over government
contracts
 Potential difficulties: must adhere to
FISMA, ensure that they are following
government regulations
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.
- 16 -
 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)
Project BlueSky
UWCC_SamplePresentation3.pptx
 Complex legacy system requires costly
redesign for cloud
 Difficult to isolate singular applications
to move to the cloud, or integrate with
interlinked government applications
AARK Group
Health Services Vertical Analysis
Greatest potential, but strong movement to cloud not likely within next 10 years
Significant process and care of quality
benefits. Existing desire for electronic
records system.
 Consumer-oriented cloud applications
likely to be well-received, useful
Current Cloud Applications
Potential Cost Savings
Limited usage in diagnostics, transfer of
information between hospitals.
Savings in data storage, IT support,
coordination between record transfers.
 Sharing of radiology files at UC Sand
Diego Health System
 Massive amounts of data storage:
patient history, appointments, lab
results, etc.
 Top cloud usages:
 Need to improve collaboration across
organizations
– Data storage and analysis
 Eliminates potential file redundancy
– Backing up data
 Lowers high capital & operating costs
 Movement towards electronic health
records system
– Storing & archiving large files
Risks
Industry is most conscious of data
security, privacy, confidentiality.
 78% of executives concerned / very
concerned about these issues
– Analyzing data for R&D
Cost of Migration
 Analysis needed for huge quantities of
data
Importance of Data Security
Industry leaders need to adopt before
costs of migration are justified: greatest
benefit is integration across institutions.
High level of data security needed:
medical records are considered one of the
most sensitive types of information.
 Costs of migrating to the cloud not only
include recoding legacy systems, but
converting physical records to
electronic
 Lack of trust that cloud technology can
provide adequate data protection
 Questions regarding legality of moving
patient information to cloud
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.
- 17 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Industry Potential
AARK Group
Retail Vertical: Sub-sections and Functions
Retail Capability Map
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
Source: Fenwick, Nigel, et al. “Industry Innovation: Retail.” 28 July 2010: 3. Forrester. Web. 2 May 2011.
- 18 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Vendor management
AARK Group
Source: Mojica, Michael, et al. “Six Questions Every Retail Executive Should Ask About Cloud Computing.”
2010. Accenture. Web. 3 May 2011.
- 19 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Core Functions of Retail Business
AARK Group
Retail Industry: Top to Bottom Needs
Customer Fulfillment
Merchandising
In retail, pleasing customers is the number one priority. Cloud
computing lets retailers engage and communicate with their
customers.
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.
 Store customer information and communication on the cloud
 Scalable space to accommodate seasonal sales data without
spending a fortune on servers
 Create a space for customers to interact with the company
 Quick process and analysis to help meet customer demand
 Host promotions without spending more on servers
 Trend analysis can guide price management to maximize
profit
Supply Chain
Corporate Services
Supply chain interaction can make or break a retailer. Improving
inventory management and streamlining supply chain
communication can save the company time and money.
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
 Just-in-Time management will reduce excess inventory,
shortages and storage cost
- 20 -
Project BlueSky
UWCC_SamplePresentation3.pptx
 Services provided by PaaS reduces the responsibilities of the
IT department
 Open communication between retailers and manufacturers
will help both make more accurate forecasts
AARK Group
Source: “Cloud Infrastructure-As-A-Service: Interest and Adoption By Industry.” Forrester Research, Inc., May
2009.
- 21 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Retail Industry Attitude Towards Cloud Computing
AARK Group
Competitively Pricing Project BlueSky’s Usage Rates
Cloud Computing Industry Usage Rates
Google App Engine
Amazon Web Services
Microsoft Windows Azure
$10 per user, per month
$8 per user, per month
Standard On-Demand Instances
Compute (instances)
 Max $2,000/month
 max $1,000 / month

[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.
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
Outgoing Bandwidth: $0.12 / GB
Data Transfer
Data Transfers
Incoming Bandwidth: $0.10 / GB
Incoming Bandwidth: $0.10 / GB


CPU Time
CPU Time
Elastic Load Balancing
 $0.10 / CPU hour
 $0.10 / CPU hour

Stored Data
Stored Data
Amazon S3 (Storage)
Storage
 $0.15 / GB / month
 $0.15 / GB / month
 $0.14 / GB

$0.15 / GB / month

$0.01 / 10K storage transactions
$0.10 / GB in. $0.00 for first GB /
month. $0.15 / GB / month.
$0.10 / GB in. $0.15 / GB out.
Virtual Network: free during CTP
$0.025 / Elastic Load Balancer- hour
(or partial hour)
High Replication Storage
High Replication Storage
Amazon Route 53 (zone hosting)
Access Control
 $0.45 / GB / month
 $0.45 / GB / month
 $1.00 / hosted zone
 $1.99 / 100K transactions
Recipients Emailed
Recipients Emailed
CloudFront (Content Delivery)
Content Delivery Network
 $0.0001 / recipient
 $0.0001 / recipient
 $0.150 / GB out

$0.15 / GB

$0.01 / 10K transactions
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
Always On
AWS Premium Support
 $0.30 / daily

- 22 -
Bronze: $49 / month. Silver: > $100.
Gold: > $400. Platinum: > $15K
Project BlueSky
UWCC_SamplePresentation3.pptx
Project Blue Sky
AARK Group
Project BlueSky Free Trial Offer
Cloud Computing Industry Free Trial Offers
Project Blue Sky
750 hrs of compute instances
Google App Engine (per month)
Amazon Web Services (per month)
500 MB of storage
750 hrs of Amazon EC2 Linux
Micro Instance usage
Microsoft Windows Azure
750 hrs of XS compute instance
25 hrs of S compute instance

1 GB BlueSky database storage
5 million page views
613 MB of memory
25 Amazon SimpleDB Machine hrs

1 GB Web Edition database
1 GB of storage
10 GB of storage
5 GB Amazon S3 standard storage
20 GB of storage



30K total storage transactions
20K Get Requests, 2K Put Requests
Data Transfers
750 hrs of Elastic Load Balancer

20 GB transfers in


20 GB transfers out
Text line
50K storage transactions
100K Access Control transactions
15 GB data processing
10 Amazon Cloudwatch alarms
2 service bus connections
10 GB of Amazon Elastic Block
Storage
128 MB cache
 Bullet


Free one-on-one support for usage >
$200 / month

Free general access to BlueSky help
consultants
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
1 million I/Os, 1 GB snapshot storage,
10K snapshot Get Requests, 1K
snapshot Put Requests
Data Transfers
Data Transfers

15 GB transfers in

20 GB transfers in

15 GB transfers out

20 GB transfers out
- 23 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Premium Support
AARK Group
Basis of Differentiation Plan: Offer Support and Services
Diagnose Cloud Needs
Implementation
Support
Development Support
Recommendations
Have interested clients complete Recommend most helpful cloud Provide recommendations for
a survey in order to determine solutions, PaaS tools and
most optimal application
their specific, individual needs. components, etc.
development strategies.
Support for developers who may
need assistance making
transition to cloud.
Example:
Example:
Example:
Example:
 Size of application(s)
 Sample code
 Virtual resource redundancy  Community forums
 Development needed to
transition to cloud
 Toolkits for application
 “Design for failure” model
 Public data sets
 Establish cost ceilings
 Integration needs
 Tutorials, videos, workshops  Tutorials, workshops
 Pattern of usage demand
 Free access to BlueSky IT
consultant (via online help)
 One-on-one support if
monthly usage > $100
Differentiate by Pairing Commodity with Service
- 24 -
Project BlueSky
UWCC_SamplePresentation3.pptx
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.
AARK Group
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.
- 25 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Assumption
Lack of any of these major factors will decrease the
likelihood of cloud-computing adoption.
AARK Group
Financial Analysis: Net Income and NPV
Projected Financials
Total PaaS Revenue Forecast
2011
2.13
2012
4.86
2013
8.90
2014
11.82
2015
13.76
2016
15.18
2017
16.74
2018
18.24
2019
19.71
2020
21.14
2021
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
Costs
0.00
(2.50)
0.07
(0.40)
0.26
(0.42)
0.53
(0.45)
0.86
(0.48)
1.22
(0.50)
1.58
(0.54)
1.98
(0.57)
2.41
(0.60)
2.84
(0.64)
3.29
(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
($2.50)
($2.50)
($0.32)
($2.82)
($0.15)
($2.97)
$0.07
($2.90)
$0.32
($2.58)
$0.59
($1.99)
$0.83
($1.16)
$1.07
($0.09)
$1.33
$1.24
$1.55
$2.79
$1.76
$4.55
NPV
Cumulative NPV
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.
- 26 -
Project BlueSky
UWCC_SamplePresentation3.pptx
“Maximize Your Energy Savings From Server Virtualization With Three Process Improvements.” Forrester Research, Inc. August 2010.
AARK Group
Forecast of PaaS Market
Forecast: Global PaaS Spending By Segment
Projected BlueSky PaaS Revenue
Assumption
Source: “Platform-As-A-Service Market Sizing.” Forrester Research, Inc., July 2009.
- 27 -
Project BlueSky
UWCC_SamplePresentation3.pptx
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).
AARK Group
Operating Income, Revenues & Expenses
Projected PaaS Revenue
BlueSky Net Income
BlueSky Revenue & Expenses
3
Expenses
BlueSky revenue
3.59
3.13
2.68
2.22
1
1.81
1.42
$Billions
Net Income (Billions)
2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(1)
0.99
0.00
0.08
0.30
0.61
(0.40) (0.42) (0.45) (0.48) (0.50) (0.54) (0.57) (0.60)
(0.64) (0.68)
(2)
(2.50)
(3)
Year
Year
- 28 -
Project BlueSky
UWCC_SamplePresentation3.pptx
Source: “Platform-As-A-Service Market Sizing.” Forrester Research, Inc., July 2009.
AARK Group
Sensitivity Analysis: Comparison of NPV
Projected PaaS Revenue with 7% Growth
BlueSky revenue
Costs
NI
NPV
Cumulative NPV
2011
0.00
(2.50)
(2.50)
($2.50)
($2.50)
2012
0.07
(0.40)
(0.33)
($0.32)
($2.82)
2013
0.26
(0.42)
(0.17)
($0.15)
($2.97)
2014
0.53
(0.45)
0.08
$0.07
($2.90)
2015
0.86
(0.48)
0.38
$0.32
($2.58)
2016
1.22
(0.50)
0.72
$0.59
($1.99)
2017
1.58
(0.54)
1.05
$0.83
($1.16)
2018
1.98
(0.57)
1.41
$1.07
($0.09)
2019
2.41
(0.60)
1.81
$1.33
$1.24
2020
2.84
(0.64)
2.21
$1.55
$2.79
2021
3.29
(0.68)
2.61
$1.76
$4.55
2017
1.37
(0.54)
0.83
$0.66
($1.72)
2018
1.74
(0.57)
1.18
$0.89
($0.82)
2019
2.16
(0.60)
1.56
$1.14
$0.32
2020
2.57
(0.64)
1.93
$1.36
$1.67
2021
3.00
(0.68)
2.32
$1.57
$3.24
2017
1.16
(0.54)
0.62
$0.49
($2.26)
2018
1.52
(0.57)
0.95
$0.72
($1.54)
2019
1.92
(0.60)
1.32
$0.96
($0.58)
2020
2.31
(0.64)
1.67
$1.18
$0.60
2021
2.72
(0.68)
2.04
$1.38
$1.98
Projected PaaS Revenue with 6% Growth
BlueSky revenue
Costs
NI
NPV
Cumulative NPV
2011
0.00
(2.50)
(2.50)
($2.50)
($2.50)
2012
0.06
(0.40)
(0.34)
($0.33)
($2.83)
2013
0.22
(0.42)
(0.20)
($0.19)
($3.02)
2014
0.45
(0.45)
0.00
$0.00
($3.02)
2015
0.72
(0.48)
0.25
$0.21
($2.81)
2016
1.03
(0.50)
0.52
$0.43
($2.38)
BlueSky revenue
Costs
NI
NPV
Cumulative NPV
2011
0.00
(2.50)
(2.50)
($2.50)
($2.50)
2012
0.05
(0.40)
(0.35)
($0.34)
($2.84)
2013
0.18
(0.42)
(0.24)
($0.22)
($3.06)
2014
0.37
(0.45)
(0.08)
($0.07)
($3.13)
- 29 -
2015
0.59
(0.48)
0.12
$0.10
($3.03)
2016
0.84
(0.50)
0.33
$0.27
($2.76)
Project BlueSky
UWCC_SamplePresentation3.pptx
Projected PaaS Revenue with 5% Growth