Business Strategies for RevenueForce Cloud Computing - Case Study Example

Business Strategies for Cloud Computing Executive summary Business plan is mainly a printed document, which outlines different strategies for a new business. In the current study, innovative business strategies will be developed for a new cloud computing start up business. RevenueForce Cloud Computing is the start up organisation which is planning to provide cloud computing services to various medium sized firms in the UK. New start-up business will be aiming to provide a separate IT atmosphere to the businesses, which will help them to increase the compatibility and security. Cloud computing system is providing most effective resources utilisation. It is providing the clients with statistical information of resources, cost of resources and pricing structures of the service module. RevenueForce Cloud Computing business will be providing their clients a separate server or IT base, which empowers them with more innovative business process. New business will be targeting the medium sized firms like grocery retailers, fast food retailers, and consultancy. Moreover, the business is planning to earn revenue of £1450 during the 2014-15 financial years and increase the revenue generation to £2665 during the 2017-18 fiscal years. Cloud services industry is booming in terms of market share and profitability. Organisations are able to maintain proper resource utilisation strategies with the help of cloud database. Thus, new cloud computing business plan is expected to get fair success. Table of Contents Table of Contents 3 Introduction 4 Business offering and Target Customer(s) 5 Customer Relationship Management activities 11 Revenue and Cost model for RevenueForce Cloud Computing 14 Reference list 17 Introduction According to Clarke (2010), web-based architectures and online data storage facilities are attracting firms for achieving growth and sustainability. Cloud environment is rapidly used by the multidepartment organisations in terms of using available resources and statistical data use. In addition, data mining and sharing is easy in cloud computing base, and firms are able to make more effective and feasible strategic decisions. RevenueForce Cloud Computing is a new business setup headquartered in the White Hart lane area of London. Mainly they are offering cloud computing system. This is a sole trading firm, initially having the employee base of 55 employees like HR manager, financial manager, technicians, software and hardware engineers and marketing employees. Target customers of RevenueForce Cloud Computing are medium grocery retailers, fast food retailers, medium manufacturing organisations and consultancy firms. RevenueForce Cloud Computing will offer client firms with some shared servers where management can be able to record and store their important resource information. Cloud will be providing statistics of resources, and various computing software to the clients from different area. For example, if client of RevenueForce Cloud Computing is having different branches in Birmingham, London, Manchester and Wales, they are able to store their data in one single log book via cloud system (Barrow, 2011). Mainly, RevenueForce Cloud Computing helps their clients to maintain a unique database. In the UK retail chain, restaurant chains and small sized manufacturing firms are facing intense challenge from the competitors. Cloud computing system will be offering those organisations with a new domain of internet storage system. However, Baligh (2007) argued that cloud computing system is having limited storage options and various small business clouds are less secured and they can be accessed through normal internet connections. Barringer (2010) stated that globalisation is affecting economies and business environments are reducing scope of profitability for small and medium sized business. RevenueForce Cloud Computing offers new dimension of computing and decision making for the small and medium sized firms. Open access is promoted among the clients in terms of managing different type of resources via web portals. Business offering and Target Customer(s) Offering of RevenueForce Cloud Computing RevenueForce Cloud Computing will be providing cloud computing support to various small and medium sized businesses. According to Farrell (2007), cloud computing facilities can reduce the complexity in utilising various organisational resources. Cloud based portals are providing proper evaluation of resources and making feasible strategies for utilising available resources. Cloud computing facilities of the RevenueForce Cloud Computing will be developing innovative cloud computing software. Clients or firms are able to store their financial, inventory, and other resources related data very easily. Management can use the data from authenticated servers. Moreover, processing of the information and utilising those in the decision making is quite easy and faster (Guffey and Loewy, 2010). Start-up business will be providing various applications and computing software to the clients. RevenueForce Cloud Computing is adopting incorporated power management system that helps the clients to make more feasible strategic plans, managers are able to forecast performance in the future tenure. Henderson and Hooper (2006) argued that managers are able to supervise resource utilisation rate of different branches from the headquarters only. They can manage the resource utilisation dynamically through the cloud servers. RevenueForce Cloud Computing has restricted cloud space. Customer segmentation and targeted customers groups of new setup business RevenueForce Cloud Computing setup will be segmenting their customers as per different industries and geographic areas. The organisation will be targeting clients like grocery and apparel retail outlets, food retail chains, consultancy firms, small manufacturing organisations and many other UK based firms. Cloud computing will be helping clients with an effective CRM or customer relationship management. In addition, cloud will be offering high amount of backup to the target groups (Barney, 2009). Currently, majority of the global firms are adopting the cloud based services to increase their decision making potentials. More than 70% of the global companies are planning to use the cloud backup of their operational and production related data during the year 2013- 2014 (Cloudindustryforum.org, 2015). However, actual use of cloud system reported as only 30-33% of the international organisations (Cloudindustryforum.org, 2015). RevenueForce Cloud Computing will be targeting clients like the retailers and medium sized manufacturers from different areas of England. Cloud bases are required to have accessible platforms along with attractive pricing. Cloud system will be offering access through platform like Windows operating system, Mac OS, and Linux operating system (Harris and Mongiello, 2012). The business offering of the RevenueForce Cloud Computing: RevenueForce Cloud Computing will be providing different cloud based services. Cloud computing services will be helping clients in developing strategic directions. New start-up will be aiding coffee shop, retail chains, fast-food retails, grocery shop chain, online marriage agency, consultancy service organisations, in storing financial, customers, employees and other resources related data and information. Clients of RevenueForce Cloud Computing will be able to maintain unique storage of resource related information (Luther, 2011). The organisation segmented their cloud in three different parts for different type of services. They are IaaS or infrastructure-as-a-service, PaaS or platform-as-a-service and software-as-a-service or SaaS. These cloud system offerings are justified in below: Justification of offering and target customer segments for RevenueForce Cloud Computing IaaS package offers customers with cloud storage environment that will include various servers, storage of different database of the firms and providing firewalls (Lennon, 2007). Emerging technologies are used rapidly in terms of developing virtualized database of the organisational resources. Cloud environment will empower the client organisation to share their data efficiently among different departments or different branches. Such service range will be helping medium scaled multi-department firms like retailers and fast food chains. PaaS platform develops online environment or clouds with different type of analytical and data storage applications. PaaS platforms are requiring authentication for the servers to access data storage from different areas. Clouds are enabling authorisation among the managers of each branch. RevenueForce Cloud Computing is offering session management options for the clients and metadata storage as part of cloud computing service. According to Rhyne (2009), medium sized manufacturing organisations will be able to analyse their resources, reordering level and time of project completion. SaaS platform of the RevenueForce Cloud Computing is providing the clients with more sophisticated and composite cloud system. This cloud platform is offering the clients with some software that will solve complexity or statistical problems faced. In addition, RevenueForce Cloud Computing will be providing supports like commercial aptitude, Web based consultation, e-mail process, and office computerization program and sales forecasting. Lennon (2007) argued that Hospitality and small sized consultancy firms can use this platform to communicate with different groups of employees who are working in various locations. In addition, they can use more personalised virtual media. Thus it can be said that RevenueForce Cloud Computing is offering the potential customers with various cloud service that are increasing their compatibility. Legal, regulatory and practices for start up New cloud based organisation need to maintain legal and statutory practises defined by different licensing authority like the Solicitors Regulation Authority or SRA. According to SRA guidelines, business plans must outline practises for different operational aspects. Business plans are supposed to have proper dissemination of business offer, target market, marketing strategies, team members, management employees, operational plans, infrastructure, resources, financial and investment plans. RevenueForce Cloud Computing needs to develop their business strategies according to various commercial laws (Kaufman, 2010). They are supposed to maintain the rules outlined in various statutory registers like the “Register of members, inspecting the register of members, Register of directors and Register of secretaries” (Gov.uk, 2015). Regulatory requirement of SRA outlines different aspects. Outcomes Focused Regulation or the OFR seeks for the communication or documentation of outcomes of the business. SRA Practise framework rule 15 of 2015 requires the documentation of features of composition and structuring of cloud setup business (Gov.uk, 2015). According to the SRA, authorisation rule RevenueForce Cloud Computing need to recruit compliance officer for legal practice (COLP) and compliance officer for finance and administration (COFA) for recording and handling of complaints from the clients (Longenecker, 2008). Value proposition for the targeted customers of RevenueForce Cloud Computing: Cloud computing of new organisation is increasing the value proposition for the clients. This will increase the compatibility in the cloud service industry in the global segment. Cloud computing system does not mean any technology; it is a model or structure used by the firms to record operational information. Cloud is backing up data and information in a unique manner to aid managers in making feasible strategic decisions. Mainly it is found that the UK based medium business is facing the challenge in recording and storing data regarding the financial, HR related, production or resource related statistics. Organisations which are having multiple locations are facing the problem of maintaining unique database and complexity in developing strategies. RevenueForce Cloud Computing is going to provide shared clouds to the clients. Multiple clients are able to use frequent technology platform to store and use data. Mainly, cloud of the new set-up will be empowering clients to use their sole data base from authenticated servers. Clients are able to access database from any geographical locations with the help of user id and password (MacMillan and Venkataraman, 2009). According to Lasher (2010), pricing model or the charges of using cloud database are developed on the rate of consumption. Fixed cost or charges will reduce the equality among the customers as per consumption. Therefore, cloud services of RevenueForce Cloud Computing are charging the customers in variable mode. User’s consumption of clouds is based on data storage, use of transaction data, and timing of use. There are various cost options for the clients using new cloud system which enables more economic prosperity for the clients. Clients will be able to get proper value proposition of their investment in the post economic condition. However, RevenueForce Cloud Computing is restricting the usage capacity of their clouds. RevenueForce Cloud Computing is targeting medium sized multidepartment and multi-location organisations. They are offering clients with frequent access to cloud database without any limitations of geographic locations. Clients are provided with the power of accessing. Cloud model of the organisation is segmented into private and public clouds. Public clouds are offering service to clients via Internet. Public clouds are mainly used by the restaurant and retail chains in terms of disseminating list of products options along with prices. On the contrary, Private clouds refer to the data storage set for a sleeted group of clients, which can be accessed through internet servers with the help of particular user id and passwords. Private networks are used by the manufacturing or retail organisations. Those organisations are able to share resource related information with different branches of different geographical locations (Ireland and Sexton, 2010). RevenueForce Cloud Computing will help in imposing customer relationship management (CRM) strategies and develop loyalty base among the customers. The organisation is developing portal for the client’s feedback collection. In addition, post sales services and maintenance of the risk free database can attract more clients from the UK market. The new cloud business is required to develop proper strategies that will aid them in marketing of the service they are offering, sales of service, service delivery, and ongoing customer support. RevenueForce Cloud Computing business plans are providing the segmentation on the basis of customer requirement (Baligh, 2007). Thus it is obtained that RevenueForce Cloud Computing will be reducing the complexity faced by the potential clients or the firms regarding data storage. They will offer the use of shared clouds and different software package. Clients can store unique database in the cloud, access them from multiple servers. Clouds database can be analytically justified so that strong business strategies can be developed. Managers of the small firms can access and edit those data and make suitable resource allocation strategies. Customer Relationship Management activities Marketing plan of RevenueForce Cloud Computing is focussing on the restaurant chains, medium retail segments and medium multidepartment manufacturing organisations. New setup business is allowing the users to view and edit database stored in the cloud with user ID and password. Cloud is offering more security and files encryption facilities in terms of mitigating the risk of hacking and misuse of corporate data. In addition, RevenueForce Cloud Computing is offering higher storage facility in competitive charges. Post service support or technological improvement will help the clients in order to obtain highest satisfaction. Therefore, service features must be promoted in the marketing process via suitable marketing channel (Barrow, 2011). Clarke (2010) stated that sales and marketing channels are one of the crucial elements of developing marketing plans. Effective marketing channel will help in reaching more potential cloud service customers. RevenueForce Cloud Computing have two options of marketing channels like Cloud based online marketing channel and On-Premise or offline marketing channels. Offline marketing channels are less secure than the cloud based marketing system. Clouds ensure higher control over the promotional policies and message via clouds. Guffey and Loewy (2010) critically evaluated that Third-Party access is the emerging threat for the cloud marketing. There is an intense risk of hacking or stealing of confidential cloud data. As per Henderson and Hooper (2006), offline marketing channels require recurring payment policies, whereas clouds are required to be purchased once. Hence, cloud based marketing channel are more cost effective for the organisation. Both Cloud and offline marketing system have fair level of reliability. Although there is possibility of facing risk in using servers or channels, the organisation can face risk regarding downtime, outages and technological failures. It is easy to customise cloud based marketing channels. In addition, people can explore cloud data through any web friendly devices. There are no demographic restrictions in using cloud portals. Therefore, RevenueForce Cloud Computing can use the cloud channel to reach to maximum number of potential customers in lower cost (Ireland and Sexton, 2010). RevenueForce Cloud Computing is offering different types of cloud based services to the clients like restaurant chains, medium retail segments and medium multidepartment manufacturing organisations. Mainly IaaS, PaaS and SaaS are the major cloud service offering to the clients. Clients are using SAAS solutions in terms of developing their online sales process, HR policies, and ERP system. Henceforth, clients are able to increase their operational efficiency and resource planning infrastructure (Harris and Mongiello, 2012). RevenueForce Cloud Computing is providing utility based cloud services. This system will help the clients to use the virtual storage option and servers to access the resource related database. Such virtual data storage ensures more backup and editing rights for the registered users. Clouds users will be able to reduce the challenge of the data redundancy. However, these clouds are seeking for the authenticated user ID and passwords in terms of reducing the data manipulation or misusing. According to Farrell (2007), cloud services are majorly used in the E-commerce firms, and fast food retail industry. SAAS solutions and managed services are integrated to provide more efficient data storage and data evaluation. Thus clients are able to develop proper strategies to obtain growth and sustainability. Organisations are able to track resource utilisation and developing solution of different problems faced in the operational process. In order to develop one cloud business setup in the London area owners have to arrange various resources. RevenueForce Cloud Computing needs to arrange the physical assets or equipments like the servers, desktops, laptops and smart phone gadgets. Physical platforms are developing platforms of application and infrastructure for providing cloud storage system. On the contrary, intangible resources are other crucial resources that are helping the organisations in terms of managing growth and success. Brand values are playing crucial part in developing market share and sustainability in the cloud service industry (Guffey and Loewy, 2010). Human resources define the software and hardware engineers developing cloud service solutions. In addition, RevenueForce Cloud Computing must develop proper strategies to maintain skilled HR force so that they can provide proper maintenance service of clouds used by the clients. Financial resources are crucial in terms of managing operational policies. RevenueForce Cloud Computing will require proper financing in terms of exacting proposed business. Financing sources are selected on the basis of lower interest rate and risk will be charged on the organisation. Selection of proper financial source is the most crucial part of the business plan preparation (Barrow, 2011). Customer support activities of new set up are mainly developing post sales service or support. Engineers are resolving the problems faced in the database management, servers are updated with latest analytical software. Data storage capacity can be increased as per requirement. Post sales service also includes analytical support to the clients. Revenue and Cost model for RevenueForce Cloud Computing Any new organisation need to develop proper planning in terms of financial segmentation. Revenue and cost model is a part of planning financial resources for the new setup organisation. RevenueForce Cloud Computing needs to plan the price and revenue earning in order to recover the investment made initially. The organisation is offering different types of cloud based services mentioned in the above segment. Therefore, various revenue and cost based models are adopted to meet more profitability from the cloud support system (Lennon, 2007). Recurring revenue RevenueForce Cloud Computing has selected recurring revenue model for IaaS support system. This model refers that the organisation will be charging its clients once for using the virtual database. In addition, they are going to offer the clients with usages of cloud platforms for recording their data. However, Lasher (2010) argued that RevenueForce Cloud Computing will be limiting the storage capacity with initial payment. Clients need to pay more if they use more storage space in the cloud of RevenueForce Cloud Computing. This model of revenue is the most popular among the cloud server users. Market based revenue and cost model Cloud based service industry is highly competitive in the global segment, therefore, RevenueForce Cloud Computing need to set competitive pricing for the service they are offering to the clients. Competitive prices are set with the help of contrasting supply and demand of the cloud service in the UK (Lennon, 2007). PaaS service of RevenueForce Cloud Computing will be set on the basis of such pricing model. Mainly, this model adopts price of service on the basis of competitor’s prices. Free sampling model SaaS model of the RevenueForce Cloud Computing are using free sampling models. The organisation is offering the clients to use free trial period of 1 month for the cloud system, if the customer gets satisfied they can subscribe the SaaS cloud for their business in exchange of $50 per month. This policy will attract the customers and they will feel more valued. RevenueForce Cloud Computing must be able to develop proper policy for their business costs. Mainly any set up can have two types of cost like fixed and variable. Moreover, the organisation will be facing the challenge of meeting the inflation affected economy. Cost of various resources will increase gradually and recession will reduce client’s capacity of making higher expenses for using clouds (refer to appendix). RevenueForce Cloud Computing will be paying for the costs like market research expenses, payment of insurance premium, license fees and work permit fees. The organisation needs to pay for the cost of the equipments like servers and other computer peripherals. Moreover, RevenueForce Cloud Computing needs to pay for the marketing and promotional policies. They are required to pay loan charges or interest on loans. RevenueForce Cloud Computing needs to pay the employee wages or remuneration and technological expenses to develop clouds for the clients (refer to appendix). Most expensive resources of RevenueForce Cloud Computing are financial resources and technological resources. The organisation will be setting up a new business; therefore, they are supposed to take loan from the commercial banks in the UK. UK based commercial banks are charging almost 19.5% compound interest rate on the principal amount of loan. It needs to be paid off within 12 years. Moreover, purchasing of servers and other software and hardware will cost RevenueForce Cloud Computing a lot (Business.hsbc.co.uk, 2015). RevenueForce Cloud Computing needs to make the major investment in the project of developing the clouds. The process starts from initial selection of engineers and ends in offering clouds to potential clients. Thus, it can be said that RevenueForce Cloud Computing needs to manage their financial assets to achieve growth and profitability (refer to appendix). Reference list Baligh, H. H., 2007. Organization Structures: Theory and Design, Analysis and Prescription. 5th ed. Heidelberg, New York: Springer Verlag. Barney, J. B., 2009. Strategic factor markets: Expectations, luck, and business strategy, Management Science 32(1), pp. 1231-1241 Barringer, B., 2010. Managing Your New Business Finances. 4th ed. 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UK Cloud Services adoption growing well. Available at: [Accessed 8 Apr. 2015] Appendix Projected income statement of the RevenueForce Cloud Computing for the year 2014-15: Particulars Details Amount Per hour (£) Raw material 12000 120 Cost of maintenance 5000 50 Prime cost 17000 170 Office and administrative overhead Office Rent 900 9 Depreciation 40 0.4 Other general expenses 180 1.8 Total office and administrative overhead 1120 11.2 Cost of service de 18120 181.2 Selling and distribution overhead of new set up Advertisement expenses 950 9.5 Other expenses 350 3.5 Total 1300 13 Cost of service sold 19420 194.2 Selling Price 22000 220 Profit 2580 25.8 Statement of forecasted profit and loss of RevenueForce Cloud Computing for the next five financial year plans: Particulars 2014-15 2015-16 2016-17 2017-18 2018-19 Sales 22000 23500 24500 25000 26800 Direct selling cost 19420 21500 22100 22800 23100 Other production Expense 0 0 0 Total cost of sales 19420 21500 22100 22800 23100 Gross margin 2580 2000 2400 2200 3700 Gross margin% 88.27% 91.49% 90.20% 91.20% 86.19% Expenses : Depreciation 40 30 35 36 40 Rent 900 750 700 750 760 Other general expenses 180 185 150 155 165 Selling and expense 0 0 0 Total Operating Expense 1120 965 885 941 965 Profit before interest & tax 1460 1035 1515 1259 2735 Interest Expense 0 100 75 25 35 Taxes Incurred 10 20 25 30 35 Net Profit 1450 915 1415 1204 2665 Comparison of the investment with the profit earned: Year 1 2 3 4 5 Net Profit 1450 915 1415 1204 2665 Investment 1000 1000 1200 1000 1800 Read More