BEST PRACTICES RESEARCH North American Cloud Computing New Product Innovation Leadership Award

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1 North American Cloud Computing New Product Innovation Leadership Award 1

2 Background and Company Performance Industry Challenges Cloud computing technology has enabled enterprises to use computer resources, such as infrastructure, software applications, and networking, as a service rather than as a product. Using Infrastructure-as-a-Service (IaaS), organizations can save a significant amount of the expenses involved in buying, storing, maintaining, and licensing. IaaS allows enterprises to pay only for their usage rather than for the entire infrastructure. IaaS can be used on demand as required. However, the traditional first-generation cloud providers have certain limitations that hinder the large-scale adoption of IaaS solutions. One of the major drawbacks of these solutions is their failure to meet the performance expectations. As these solutions do not deliver satisfactory speed, enterprises are not very keen to adopt them. Since performance has been a key attribute facilitating the smooth migration from a physical infrastructure to a cloud-based virtual infrastructure, it is essential to address this limitation. Another critical issue in the use of IaaS is that most solution providers have fixed capacity packages of resources with fixed pricing structures. This often forces the users to pay for extra capacity and resources that they do not need. In addition, the billing for such resources is usually done on an hourly basis. Therefore, a user has to pay for a full hour of usage even if the actual usage was only a few minutes. The above-mentioned challenges have led to the need for an efficient IaaS solution that delivers optimum cloud computing performance along with flexibility in resource allocation and suitable billing procedures. In order to meet these requirements, Massachusettsbased ProfitBricks has come up with an innovative solution called Cloud Computing 2.0 an efficient IaaS solution offering best-in-class performance at an affordable rate. Visionary Innovation and Product Excellence of ProfitBricks Unmet Needs Users of IaaS have three major requirements from the solution: performance, affordability, and ease of use. While competing solutions fail to deliver the expected performance in terms of processing speed, ProfitBricks solution delivers more than twice the processing speed of its competitors solutions. Moreover, the pre-defined packages of resources offered by these competing solutions might not be required in their entirety by users; however, the users still have to pay for all the resources in order to get the ones they need. In contrast, ProfitBricks offers flexible plans tailored to its customers requirements. This results in customers incurring lower 2

3 costs for the IaaS solution. Unlike its competitors hourly billing approach that charges users for an hour even if they used only a few minutes, ProfitBricks s minute-based billing approach enables users to pay by the minute. This, too, lowers the costs for users of the IaaS solution. Ease-of-use has been a key area for enhancing the adoption and usage rates of IaaS solutions. In competing solutions, operations that involve designing, deploying, and maintaining cloud environments is a complex procedure requiring highly skilled personnel and a considerable amount of time. In contrast, the highly user-friendly graphical user interface (GUI) of the ProfitBricks solution makes designing, building, deploying, and maintaining a cloud environment effortless and fast. Blue Ocean Strategy ProfitBricks has been successful in meeting the market expectations for cloud computing technology by delivering an IaaS solution with optimum performance at an affordable price. This unique combination has given the company an advantage over its competitors in the cloud computing space. By offering flexibility in selecting resources according to requirements at the lowest prices and with the optimum processing speed, ProfitBricks has gained a considerable first-mover advantage. In response, the competing companies have tried to lower their prices and enhance the performance of their solutions by introducing new server sizes. However, their performance has not yet matched that of the ProfitBricks solution, and the pricing for ProfitBricks is still the lowest in the market. In order to maintain its competitive advantage, ProfitBricks depends on its large team of experienced engineers and officials to deliver best-in-class performance at the lowest prices. Aspirational Ideals The primary aim of competing companies is profit maximization, whereas that of ProfitBricks has been on making cloud computing available to all. To accomplish this goal, the company has been particularly attentive to meet customers needs while designing its solution. The low pricing and optimum performance enable users to enjoy the power, flexibility, and limitless nature of cloud computing. Big data has been a groundbreaking approach for various complex data-dependent solutions across sectors, such as health care and scientific research. Such research could result in innovations that are advantageous for humanity. However, the adoption of big data technology is highly expensive and, therefore, not affordable for many research organizations. ProfitBricks aims at make the storage, analytics power and functionalities of big data available to these researchers by using the capabilities of the cloud at a very low 3

4 price. The company aims to deliver the ability to analyze and solve big data problems by leveraging the cloud infrastructure for the betterment of society. Match to Needs ProfitBricks believes that its success depends on its customers satisfaction with a solution. In contrast to competitors that offer limited or helpline-based support and then charge for these services, ProfitBricks provides , phone, and online support absolutely free of charge. The support engineers interact directly with customers to solve their problems and obtain useful feedback to improve the solution. The company also has an efficient customer feedback portal where customers can submit their opinions. Using the information, the company can conduct regular meetings with customers to gather useful insights. ProfitBricks sales engineers continuously interact with the cloud computing community to obtain inputs that are channelized to the strategic teams for analysis of the priorities and the formulation of future roadmaps. Reliability and Quality ProfitBricks has primarily focused on ensuring the quality of its services and enhancing the reliability of its products. Unlike competing solutions that depend mainly on highly unreliable temporary storage, the company offers dual redundant RAID 10 block storage, which is highly reliable. In addition, to protect the integrity of customers data, all the data is copied into two separate data centers operated by the company. These are situated in two different physical locations and involve four disk drives. This unique practice ensures that no data is ever lost. Another focal point has been delivering performance at the lowest possible price. Whereas competing solutions leveraging first-generation cloud infrastructure provide low performance at lower speeds, ProfitBricks has been evaluated by specialized benchmarking suites to be delivering more than double the performance with optimum quality at less than half the price of competing solutions. Design The major product design elements that the ProfitBricks team focuses on are delivering high-performance cloud environments, flexibility, and a lower price. Unlike competing solutions using standard networking technology, the design team at ProfitBricks uses InfiniBand, a high-performance network interconnect that is capable of connecting servers at a speed of 80 gigabits per second (Gbps). This enables delivering a zero downtime maintenance environment due to this extremely fast speed. The company strives to deliver a highly efficient software platform that was designed and is now maintained by the engineering team. This solution allocates, releases, and 4

5 configures resources effortlessly. The solution leverages a proprietary data center designer element that helps visualize cloud computing resources through the GUI, making the design, deployment, and maintenance of cloud environments very easy. Conclusion ProfitBricks has created a new benchmark in the cloud computing space by introducing the Cloud Computing 2.0 IaaS solution. Its premium performance, coupled with enhanced flexibility at the lowest cost of usage, make the solution superior to competing IaaS solutions. The ease of operations for effortless cloud migration is an added advantage. In recognition of the uniqueness and innovative capabilities of this IaaS solution, Frost & Sullivan is proud to present the 2014 North American New Product Innovation Leadership Award in Cloud Computing to ProfitBricks. Significance of New Product Innovation Leadership Ultimately, growth in any organization depends upon continually introducing new products to the market, and commercializing those products to the greatest extent possible. For these dual goals to occur, a company must be best-in-class in three key areas: understanding demand, nurturing the brand, differentiating from the competition. This three-fold approach to delivering New Product Innovation Leadership is explored further below. 5

6 Understanding New Product Innovation Leadership Ultimately, innovation is about finding a productive outlet for creativity for translating ideas into things people want to buy, and doing it over and over again. Even a very good idea or even a series of very good ideas will amount to nothing without successful implementation at each stage of development and commercialization. Creativity and implementation are therefore two sides of the same coin, as explored further below. Frost & Sullivan s Global Research Platform Frost & Sullivan maintains more than 50 years in business and is a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The Company s research philosophy originates with the CEO s 360 Degree Perspective, a holistic research methodology that encourages us to consider growth challenges, and the solutions companies employ to solve them, from every angle. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the results of our research in New Product Innovation leadership, Frost & Sullivan is proud to present the 2014 North America New Product Innovation Leadership Award in Cloud Computing to ProfitBricks. 6

7 Key Benchmarking Criteria For the New Product Innovation Leadership Award, we evaluated the total client experience and strategy implementation excellence according to the criteria detailed below. Visionary Innovation Criterion 1: Unmet Needs Criterion 2: Use of Mega Trends Criterion 3: Pioneering Best Practices Criterion 4: Blue Ocean Strategy Criterion 5: Aspirational Ideals Product Excellence Criterion 1: Match to Needs Criterion 2: Reliability and Quality Criterion 3: Product/Service Value Criterion 4: Positioning Criterion 5: Design Decision Support Scorecard and Matrix To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard and Matrix. This analytical tool compares companies performance relative to each other. It features criteria unique to each award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. This tool allows our research and consulting teams to objectively analyze performance, according to each criterion, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below. 7

8 Best Practice Award Analysis for ProfitBricks Decision Support Scorecard: Visionary Innovation The Decision Support Scorecard, shown below, includes all performance criteria listed on page 7 and illustrates the relative importance of each criterion and the ratings for each company under evaluation for the New Product Innovation Leadership Award. The research team confirms the veracity of the model by ensuring that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies. Finally, to remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players in as Company 2 and Company 3. DECISION SUPPORT SCORECARD FOR TECHNOLOGY INNOVATION LEADERSHIP AWARD (ILLUSTRATIVE): VISIONARY INNOVATION Measurement of 1 10 (1 = poor; 10 = excellent) Award Criteria Visionary Innovation Unmet Needs Use of Mega Trends Pioneering Best Practices Blue Ocean Strategy Aspirational Ideals Weighted Rating Relative Weight (%) 20% 20% 20% 20% 20% 100% ProfitBricks Company Company Criterion 1: Unmet Needs Requirement: A clear understanding of customers desired outcomes, the products that currently help them achieve those outcomes, and where key gaps may exist Criterion 2: Use of Mega Trends Requirement: Ability to incorporate long-range, macro-level scenarios into strategic plans, thereby anticipating and preparing for multiple futures that could occur Criterion 3: Pioneering Best Practices Requirement: A nothing-ventured-nothing-gained approach to strategy implementation that results in processes, tools, or activities that generate a consistent and repeatable level of success. Criterion 4: Blue Ocean Strategy Requirement: Proven track record of creating new demand in an uncontested market space, rendering the competition obsolete Criterion 5: Aspirational Ideals Requirement: A willingness to look beyond the simple goal of generating a profit to embrace a more powerful ideal of bringing greater value to customers or the planet 8

9 Decision Support Scorecard: Product Excellence DECISION SUPPORT SCORECARD FOR PRODUCT LEADERSHIP AWARD (ILLUSTRATIVE): PRODUCT EXCELLENCE Measurement of 1 10 (1 = poor; 10 = excellent) Award Criteria Product Excellence Match to Needs Reliability and Quality Product/Service Value Positioning Design Weighted Rating Relative Weight (%) 20% 20% 20% 20% 20% 100% ProfitBricks Company Company Criterion 1: Match to Needs Requirement: Customer needs directly influence and inspire a product s design and positioning Criterion 2: Reliability and Quality Requirement: The product consistently meets or exceeds customer expectations for performance and length of service Criterion 3: Product/Service Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 4: Positioning Requirement: The product or service delivers a unique, unmet need that competitors cannot easily replicate or replace Criterion 5: Design Requirement: The product s visual presentation makes it easy to use, and makes customers happy to use it About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment 9

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