Embed Size (px)
Citation preview
The DWS Group – Sample Commercialization Plan Page 1 of 5
Copyright © 2012, All Rights Reserved
Business & Commercialization Plan
Project Timeline The diagram below shows the project timeline including key milestones (bold, starred) and the cumulative level of cost sharing over time.
Marketing and Sales An EnerPlatform system can be brought online faster and more economically than any other smart-‐grid technology platform. Once installed, EnerPlatform allows our customers to leverage flexible, dynamic, preemptive, and expandable analytics and data collection/processing abilities. This reduces maintenance and operational costs of energy assets, allows systems to run more efficiently, reduces energy costs, and brings all energy assets under a single management platform. In order to be able to cater to all of our target markets while balancing financing required for commercialization, we intend to initially offer EnerPlatform in three ways:
1. Hosted EnerPlatform (SaaS) 2. OEM License Agreement 3. Customer Installed EnerPlatform
The DWS Group – Sample Commercialization Plan Page 2 of 5
Copyright © 2012, All Rights Reserved
Our focus will initially be on the first two – the hosted solution allows us to avoid and mitigate piracy threats while also build ongoing revenue without the need to drive a strong sales effort on software assurance agreements (applicable for customer installed EnerPlatform). Ideally, we would like the majority of our sales to come from the hosted platform. Additionally, we plan to seek out OEM license agreements due to their lucrative nature. Our intent is to reach out to companies that manufacture various energy assets and present them with a customized and branded solution built on EnerPlatform. Our first target for a licensed product is a large electric battery recharging company located on the west coast with whom we’ve worked with in the past. The advantage to these agreements is that we can generate short-‐term cash flows and focus our efforts on improving the product as opposed to supporting many different types of customers. Monetization The hosted EnerPlatform solution can be monetized in several ways – although our preferred method is a fixed subscription price plus a dynamic fee based on the number of system transactions and connected devices.
Fixed Annual Access Fee: $6000 Annual Web User Account Fee (excess of 10): $150 System Transaction Charges1: $0.00015
Monitored Device Charges (annual):
0-‐49 Assets 50-‐99 Assets 100+ Simple Sensor/Meter $15 $15 $10 Low-‐Resolution2 Device $250 $200 $75 High-‐Resolution Device $500 $400 $150 Competitive systems, such as those from BPL Global and Silver Spring Networks typically start at $10,000 and up each year, also scaling based on the assets under management and features being used. Target Market and Strategy Initially, our focus is on medium to large sized OEMs that manufacture smart-‐grid connected energy assets who are looking for or could benefit from an intelligent data platform. We will identify these firms individually and reach out to them offering a demonstration of EnerPlatform and showcase how their products could benefit from integration. We expect challenges in being able to meet with key individuals within these firms but intend to start by capitalizing on our network of firms whom we’ve worked with before. In parallel, we are also planning to reach out to businesses and organizations that would benefit from renewable integration. We plan to work with system integrator firms that sell renewable products to these customers, and show the integrators how this platform can allow the end user to achieve greater energy and financial performance from their investment and thus show a payback period within the realm of the overall project budget. Working with a system integrator will allow us to manage our sales budget by reducing the number of potential partners we need to sell on the concept. In addition to reaching out to system integrators, we may explore directly packaging a renewable energy solution to certain businesses and agencies in the role of a general contractor beyond the EnerPlatform provider. An example would be to prepare a proposal for a landfill containing LFG generation, an EnerPlatform system, and the grid-‐interconnection of the product. We would include in the proposal funding sources such as public grants and/or tax incentives. 1 A transaction is a single query or response on an external EnerPlatform interface 2 Resolution refers to the frequency at which data is exchanged with the energy asset
The DWS Group – Sample Commercialization Plan Page 3 of 5
Copyright © 2012, All Rights Reserved
Market Size and Addressability A Cisco Systems analysis is projecting that the market for communication components of smart-‐grids is $20 billion per year in the short-‐term.3 Pike Research sees the analytics market hitting $4.2 billion by 2015. Globally, the markets are even larger given the relatively more developed electricity infrastructure in the United States. Beyond electricity, EnerPlatform can provide tremendous value in other areas such as natural gas and water distribution systems. Because of this in conjunction with the problems being addressed by EnerPlatform, we estimate being able to bring in close to $1 million of revenue over the next 3-‐4 years with rapid growth beyond that as we gain traction and a broader plug-‐in and analytics base.
Manufacturing Plan EnerPlatform is a software suite requiring data center capabilities for deployment. Because of its nature, there are no tangible products that require manufacturing. However, for our hosted version of EnerPlatform, there are capital requirements in order to maintain the data center capabilities. Due to the need for extremely high uptime as well as a physically secure environment, the cost to bring a company owned data center online, even in a collocated facility, will be at least $150,000 with significant ongoing monthly expense (starting at $1500/mo.). This approach would make bootstrapping the launch of the hosted product risky and would require raising significant capital for non-‐core expertise. As a result, we’re planning to utilize cloud based virtual servers for the initial ramp up. In this approach, we gain the security and reliability of a high-‐end data center without the need for any capital outlays and cost to maintain the physical data center infrastructure. Based on current market prices, the monthly operating costs for an initial virtual server environment would run between $300-‐500/month. Since all fixed costs are eliminated, our backend costs scale with our revenue. Further, as a risk management strategy, we could utilize multiple different virtual server providers with an active failover to ensure any issues with one provider do not cause customer disruption. We intend to maintain our base of operations in New York State and thus as we scale-‐up, the customer support, project management, and the manufacturing of EnerPlatform will remain within the state.
Finance The table on the following page shows cash flow estimates for 2012-‐2018.
3 Cisco: Smart grid will eclipse size of Internet
The DWS Group – Sample Commercialization Plan Page 4 of 5
Copyright © 2012, All Rights Reserved
The table below summarizes the cash position of EnerPlatform over the same time period. Based on our current projections, we will need to raise around $200,000 of additional capital before going cash flow positive in 2018. We envision being able to hit that capital target via traditional funding sources. Further, we can adapt our costs and scaling based on differences to actual revenue than projected.
Potential Funding Sources In the past, we have worked with numerous angel investment groups, including one focused on clean energy technologies. Our preference is to reach out to raise funds once we have a demonstrable product to achieve better terms and to allow us to raise capital to bring us through the entire go-‐to-‐market strategy. We intend to reach out to these firms approximately 12-‐months into the product development process allowing us to have a finance source lined up for the 24-‐month marker. In addition, prior to reaching out to angel groups, we plan to begin to seek licensing opportunities to OEMs. The intent here would be to have letters of intent and other commitments in place to help provide additional strength in our
The DWS Group – Sample Commercialization Plan Page 5 of 5
Copyright © 2012, All Rights Reserved
investment proposition. Further, in the case of difficulties raising funds, revenue from an OEM agreement would allow us to proceed further, although on a more meager acceleration path. Beyond traditional investment and sales, we are also looking for other opportunities to leverage federal funds to commercialize the product further. This may include proposals to the DOE, as an example, depending on finding an opportunity that provides a good fit.
Organization Plan Once we enter the commercialization stage for EnerPlatform, we envision the need to fill in the following roles. Unlike many small technology firms, we would like to ensure that our product development group expands with the revenue of the company and is allowed to focus on improving and growing the product as opposed to supporting customers. As a result, we are ensuring that during the initial product development phase, enough effort is being spent on tools and the deployment capabilities to ensure that a customer operations group can manage deployments entirely. Key Positions:
• Director of Sales and Marketing • Sales Engineer • Director of Customer Operations • Project Manager/Engineer • Senior Data Center Manager
Initially, we intend to have the project managers/engineers serve as the first level of customer service as opposed to filling out a team dedicated to that role. Once we arrive at a point where a full resource can be devoted to customer support, we will begin building up that area. Target Size, 2014 Product Engineering 5 Sales and Marketing 3 Customer Support/Engineering 3 Information Technology 2
Technology Transfer During the next 2 years, starting at the 18-‐month product development period, we plan on attending at least two clean technology conferences with a goal of being able to present a paper. In addition, we plan on preparing at least one paper showing how an intelligent smart-‐grid platform such as EnerPlatform can yield improved energy and financial results for the end users, and submit the paper to a related journal.
