"Business Development Proposal (BDP)Chapter – 3The Feasibility StudyFeasibility Research PlanThis chapter named - The Feasibility Study involves in - depth study and analysis of CloudUK business setup in UK. Several factors such as service type, potential clients, marketanalysis, financial analysis, they type of industry etc are studied. Primary and Secondary Data NeedsPrimary Research:Cloud UK Owners, who are the Company CEO and two Partners, conducted a primary orpreliminary research to identify latest trends in IT market. After, in – depth analysis, CloudComputing as a service was decided. Primary sources of research are internet sources,comparison with few case studies, regular discussions among partners etc. (Is4profit.com,2015) Primary research yielded few results. They are mentioned as follows:1. The type of Industry for setting up business (IT Industry)2. Decision on Product or Service that Company will work on that is Cloud ComputingServices3. Various benefits of Cloud Computing, leading Companies who provide services onCloud computing etcSecondary Research:Based on available resources secondary research was conducted by participants. Resourcesgathered during secondary research are: cloud computing case studies for start up small scalebusiness, market analysis results, conducting surveys, consulting experts etc. Also, the teamapproached various research agencies to get exact idea of Cloud Computing – market trendsand company’s revenue collection etc. Also, many other factors such as strategies adopted byvarious cloud services companies were studied and shortlisted, their revenue collection,potential clients etc were researched in the process. (Is4profit.com, 2015)15 Business Development Proposal (BDP)Research Methodologies AdoptedCloud UK owners or participants used several methodologies for researching businessopportunities and market. Initially they conducted interviewing to know basic data. This wascarried out by a key informant who provided necessary data to the team. Next methodologyused was FGD that is Focus Group Discussion. From the raw data obtained by key informant,the team conducted a group discussion with few business consultants. Pros and Cons ofbusiness opportunities were a result of Focus Group Discussion process. Then conductedsurveys, studied many case studies on cloud computing business for start up small scaleindustries. CEO (Chief Executive Officer) of the Company has three years of experience ofwork in one of the IT Industry. His overall experience and few main factors such as methodsof handling clients, process followed in his previous company, company structure, teammembers and their qualification, strategies followed by the organisation, methods ofmarketing the product and service, advantages and disadvantages of each product and servicedeveloped and delivered by the company etc were discussed. Another research methodologyadopted was participants’ keen observation on market analysis and trends. This particularresearch methodology helped the team to acquire much knowledge on market as research wasconducted individually and then discussed in a group. Key aspects of Feasibility ResearchThe major questions posed by feasibility study of business are: (1) does the product haveenough demand in market? And (2) can the product get enough profit to business owners?(Moyes and Lawrence, 2003)Following is the Feasibility study done in order to examine feasibility of Cloud UK businesswith Cloud computing services. Description of VentureCloud UK is a small – scale, UK based IT Industry which provides Cloud computing servicesto their clients. Services provided by Cloud UK are: IaaS (Infrastructure as a Service) andSaaS (Software as a Service). Services include hosting various applications, services based onemails, storage of data, information sharing etc. Business proposal is to locate Cloud UK inWales. (Moyes and Lawrence, 2003)Opportunities16 Business Development Proposal (BDP)Cloud Computing is one such technology that is growing extensively in market. AllCompanies are moving into cloud because of the unlimited benefits offered by Cloudcomputing services. Cloud computing services can be divided into three different servicesand they are: IaaS, PaaS and SaaS. Cloud UK will be providing services on IaaS and SaaS forfirst two years after establishment. Revenue collections of well established Cloud computingservice providers show that it is increasing every year. For example, Both AWS andRackspace's quick revenue increment can be credited from the growing use of the IaaS.(Tantow, 2011) According to Gartner, it is predicted that IaaS will increase the growth ofCloud Computing services. Figure 3.1 shows the Market Potential of IaaS services.Figure 3.1 IaaS Cloud services Market analysisAccording to Gartner’s prediction, IaaS cloud service will acquire CAGR (CompoundAnnual Growth Rate) of about 41.3 % through year 2016. Thus, IaaS is the fastest growingservice under cloud computing services. On the other hand, Gartner has predicted SaaSgrowth rate as CAGR equal to 19.5 % through year 2016. (Columbus, 2013) Thus, both theCloud UK services (IaaS and SaaS) are growing extensively in market with IaaS servicebeing the leading one. Market structure of cloud computing is simple. Business owners who wish to provide cloudrelated services have to purchase cloud services from some company and later serve theirclients by providing cloud computing services keeping their profit margin. Cloud computingas a business is widely accepted and thus there is tough competition in market. But equallythere are numerous clients or customers who wish to switch to cloud services. Thus, no17 Business Development Proposal (BDP)barriers to enter into market with cloud services as a business choice. Channels available toget access to cloud services are electronic media and cloud distribution channels. Benefits of Cloud computing services are: flexibility - all the business needs are achievedeasily, data recovery, enhanced collaboration, availability of automatic software updates,secured network, flexibility of working from anywhere, increased competitiveness, documentcontrol, environment friendly etc. (Salesforce.com, 2015)Service DescriptionServices to be provided in Cloud UK Company are cloud computing services namely IaaSand SaaS. Both services provide high performance to organisations having cloudimplementation. Cloud computing services are highly reliable, secured, quick access to data,high storage capabilities, efficient and flexible. Purchase Cost of IaaS and SaaS are to bediscussed with companies from which Cloud UK will be buying these services. Also, othercost details such as installation costs, maintenance costs etc are to be discussed. Asmentioned in Chapter – 1, IaaS will be purchased from Amazon Web Services and SaaS willbe bought from Salesforce Company. Links to contact these companies for costs are:- Amazon Web Services: http://aws.amazon.com/- Salesforce: http://www.salesforce.com/uk/Regular updates will be available in cloud computing services but there is no need ofpersonal attention as updation will be done automatically without affecting work. Cloud UKhas to work on security and maintenance aspects regularly. Trained employees are necessaryto help clients with installation process or any other issues related to cloud network. Employee Requirements:1. Employees from Engineering background (Computer Science domain): Experiencedcandidates (more than 3 years of expertise in Cloud Computing). This includesbusiness analysts, designers, developers, testers, delivery managers etc2. HRD (Human Resource Department): MBA3. Marketing Manager18 Business Development Proposal (BDP)4. Customer Care or Support Team Cloud computing services for Cloud UK are designed in such a way that it can attract morenumber of customers. Targeted clients are small and medium scale industries, Governmentbodies, Personal cloud users’ and MNC companies. For personal users’ a 30 days trial plan isdesigned so that they can check Cloud UK services. For other clients, low – cost services isdesigned. Other designed features include: Free 24 / 7 supports, free load balancing etcRevenue Generation: Cloud UK being a start up Company it is important to commercializeabout the company offerings or services in market. Also, an experienced Marketing Managerhas to be recruited who can convince potential customers. Also, retaining customers is veryimportant as it may put Company’s reputation at high risk. Marketing Manager will approachall the potential or target clients and produce Cloud UK’s services. Keeping a follow – upwith clients and expanding network is also very necessary. Commercializing can also be doneby posting ads in websites, newspapers, blogs etc. Also, Cloud UK should be an activemember in social – networking site so that personal cloud users’ can be attracted. (WhatShould Your Feasibility Study Include, n.d)IndustryCloud Computing is a technology that comes under the IT (Information Technology) Industrywhich is one of the blooming industries. As most of our work these days is Software based,IT Industry has seen many inventions. IT Industry is one such industry that will continuegrowing for many decades. With invention of Cloud Computing, IT Industry has gone to thenext level as Organisations can manage huge data easily and also critical data are secured.Starting a business in IT Industry domain is a great choice as resources available are plenty innumber and risk mitigation becomes easier. (Rahul, Haque and Muntjir, 2012)Target Market Target Market can be categorised into two different types. They are: Consumer Market andBusiness Market. Consumer Market: Consumer market focuses on the categorization of consumers or potentialclients based on certain criteria such as education, occupation, size of the company, type of19 Business Development Proposal (BDP)the company, type of users’ etc. Potential users’ for Cloud UK business are classified intofive types. They are: - Personal users’ - can be students, business people, freelancers etc. - Small scale industries – can be IT industry, product manufacturing industries such asmechanical, civil etc. This also includes educational societies such as Colleges andUniversities, travel agencies etc- Medium Scale industries -these can be IT Industries, other domain industries etc- MNC Companies – IT Industries, providing services to hotels, airlines etc- Government bodiesA market survey conducted to understand customer reviews on cloud computing depicts thatusers are willing to move to cloud computing services because of various benefits providedby cloud. Small scale industries, medium scale industries, other domains such as hotels,travel agencies, educational services etc are willing to move to cloud environment because ofsecurity and low - cost services. MNC companies are attracted to cloud services because ofbenefits such as flexibility of data access to employees as they can work anywhere using theinternet, cloud services are more economical and eco – friendly. On – site deployment needslot of computational action and comparatively the computational action is very less whenusing cloud services. Many organisations can securely share the same physical resources andthus this leads to high efficiency as resources are shared. Personal users’ are attracted tocloud computing services because of fast implementation time and pay per use benefits.(Cloud-lounge.org, 2015)Once the potential clients are identified, it is quite easy to reach them. Two ways of reachingclients is to meet them personally and explain cloud services and Cloud UK’s unique features/ value addition. Other way is to contact customers via emails, telephone, emails etc. But theeffective and most feasible way of contacting clients is by meeting them personally. Buying decisions are again based on the type of users’ and decisions are of two types. Theyare: Group decisions and individual decisions. Group decisions are made in medium scalecompanies and MNC companies. Individual decisions are made in small scale industries,20 Business Development Proposal (BDP)other business segments and personal users’. Convincing customers depends on factors suchas: Marketing Manager Communication skills, unique features provided for customers, costfactors etc. Buying decisions are again based on many factors such as level at which a clientis convinced regarding Cloud UK services, the low – cost strategy, Quality of Service (QoS),security aspects, unique benefits to users’ and also it is important to highlight importantfeatures and benefits of Cloud UK services when compared to other companies in market.Unique benefits or features (as discussed earlier) include: Free 24 / 7 supports, free loadbalancing features, availability of Integrated Power Management to all users’ etc. Business Market: Cloud Computing finds applications in almost all the fields of work where internet servicesare used. Thus, the Organisations that will purchase the product are small scale IT industries,medium – scale IT industries,Government bodies, MNC Companies and other fields of worksuch as education that is colleges and universities, travel agencies, airlines companies, hotelsetc. Also business people find it interesting to implement Cloud computing in their industry.Even in business markets, buying decisions are dependent on the type of industry Cloud UKis targeting. If it is small scale business, then buying decisions are mainly made by theCompany CEO and board of directors and if it is large scale business, then buying decisionsare made by some particular teams. Thus, different approval levels are observed in large scaleindustries. There are four main steps involved in the Budgeting process. They are: preparation of budget,then the budget is approved by CEO and board of directors. The next step is to execute thebudget. In this stage care is taken by chief executives to make sure money is not wasted inany step. Last stage in budgeting process, is the execution of budget. (Lander, 2015) Timerequired for the first contact with client to receipt of an order mainly depends on the clientrequirements. If client’s requirements are straight – forward and less complex and availablewith Cloud UK Company, then the duration would be approximately a week. If therequirements of clients are complex and a large implementation, then time required would beapproximately a month or two. Business markets also follow certain criteria to make buyingdecisions. They are low – cost services, quality of service, level of maintenance, uniquefeatures of services etc. 21 "