Atlantic Inc Group6 Working

COSTS INVOLVED IN A BASIC SERVER COST OF PESA TOOLElectricity 250 R&D cost incurred Cost of license 750No of servers per admin 40 Basic server marketAnnual salary 80000 Expected market shareCost per server for admin 2000 Market for Atlantic Basic server

Cost per server

Expected market share for Tronn + PESA (50% attach rate)

COST OF PESA TOOL2000000

2001 2002 2003 Total in 3 years50000 70000 92000

4% 9% 14%2000 6300 12880 21180

1000 3150 6440 10590189

OPTION 1 : PRICE WITH PESA AS FREE

Price Cost Profit MarginTronn without PESA 2000 1538 462 30%

Tronn with PESA 2000 1727 273 16%

COST INCURRED BY CUSTOMERprice 2000Electricity 250License 750Admin cost 2000Total cost in a year 5000

OPTION 1 : PRICE WITH PESA AS FREE

OPTION 2 : COMPETITIVE PRICING BASED ON ZINK

1 Tronn server with PESA = 4 Zink servers

Cost of Zink server 1700Cost of four since servr 6800

COST INCURRED BY CUSTOMER1 TRON SERVER

Electricity 250License 750Admin cost 2000price 6800Total 9800

OPTION 2 : COMPETITIVE PRICING BASED ON ZINK

OPTION 3: COST PLUS PRICING

Cost per serverTronn without PESA 1538

Tronn with PESA 1538 + 189 = 1727

OPTION 3: COST PLUS PRICING

Markup price (@30%) Profit2000 4622245 519

OPTION 4 : VALUE BASED PRCING USING CONSERVATIVE DATA

CONSERVATIVLY 2 TRONN SERVERS = 4 ZINK SERVERS

OPTION 4 : VALUE BASED PRCING USING CONSERVATIVE DATA

CONSERVATIVLY 2 TRONN SERVERS = 4 ZINK SERVERS

Conservative Assumption: 2 Tronn server = 4 Zinc serversCost break up 2 Tronn servers 4 Zinc serversOriginal Price 4000 6800Electricity 500 1000License 1500 3000Total Cost 6000 10800Savings 4800Final price (Original price + 50% of savings) 6400Margin (6400 - 1727)/1727 = 270%

Assumption: 1 Tronn server = 4 Zinc serversCost break up 1 Tronn servers 4 Zinc serversOriginal Price 2000 6800Electricity 250 1000License 750 3000Total Cost 3000 10800Savings 7800Final price (Original price + 50% of savings) 5900Margin (6400 - 1727)/1727 = 240%