January 2015 – February 2015

Subject: Develop a new approach to customer acquisition and expansion of day-to-day business

My Task: Create a Business Plan for new product

Used Tools: Microsoft Office, Internet, Customer Survey, Company ERP System, visits to trade fairs

Solution

In January 2015 my colleague and I created a business plan to expand our current business with existing and especially new customers. At this time I worked for arxes-tolina GmbH as an Account Manager and was responsible for the area of Eastern Germany. In this region all existing business in the field of IT Systems and IT Consulting was split between well-known and long-acting IT system companies. That’s why we needed a new, creative approach to serve the needs of IT executives. After 1 month of research we wrote the business plan for a new, not yet available product/ service, which we wanted to offer.

Executive Summary

With a flexible billing model and modern IT infrastructure, as well as various possibilities of workplace equipping, we want to inspire medium-sized companies to understand their workplaces as a service to their employees and to be able to bill them accordingly. Thus, the client’s IT budget can be spared int he long term and useless investments are avoided, which strengthens the company’s innovative power. At the same time, the attractiveness of the company as a modern and flexible employer is promoted. Employees may express their wishes and implementing these will not strain the budget enormously. Temporal flexibility is provided by the billing model and billing can also be carried out internally at the customer’s cost center level or employee-based, which simplifies controlling. The customer will be able to focus on their core business while at the same time having the security of being able to use a well-working IT infrastructure.

Business Idea

We would like to offer companies in the middle class, ideally in the range of approximately 30 – 100+ PC workstations, a possibility to react flexibly to employee fluctuations and also to reduce the costs bound to the work place. Furthermore, the service Bring-your-own-device will be promoted with this service. Thus, the respective company can become more attractive to employees and future employees and at the same time reduce the IT budget for new equipment or the replacement of old equipment.

We suggest to offer the management a monthly rate, with which a job, depending on the equipment, duration of use and service level, can be “purchased”. The hardware and software is independent of the manufacturer. The prerequisite is that the majority of the operated software can be virtualized, with a mixed operation of virtual desktop & locally installed special software is also conceivable.

Possible variants are:

  1. Complete virtualization of the desktop environment and hosting of the application in the arxes cloud data center including backup and service. On-site construction of the desired hardware (ThinClient, TFT, mouse, keyboard, …) depending on the customer’s requirements with monthly, flexible billing as leasing, hire purchase, or so-called flat rate, whereby after a specified period the hardware is replaced. Billing as pay-per-use with option to purchase the equipment upon termination, otherwise redemption by us.
  2. Operation of the cloud services in-house on suitable infrastructure with service by us and backup in our cloud data center as disaster recovery
  3. Bring-your-own-device service: Virtualization of the desktop environment, hosting this at arxes or on-premise in the enterprise with appropriate service, selection of user terminals and preparation of the same by us. The monthly rate is then due only for operation / backup, the devices are to be purchased.
  4. Harmonized workplace environment with shopping cart. Specified workstations with given hardware and software packages in a shopping cart. The customer’s request for a specific job is implemented immediately. The hardware is set up, installed and put into operation on site. Service for 3-5 years inclusive. Duration of monthly installments accordingly for the service period. Operation of the desktop environment can be virtualized, but also conservative locally. Maintenance (remote) and service (spare parts, repair) is included, as well as UHD. Monthly billing period. Hardware can be purchased after completion, otherwise take back or exchange with new contract.

Target Group

The target group are small and medium-sized companies in the region of Saxony, Saxony-Anhalt and Thuringia. Mainly companies whose core business has nothing to do with IT. These companies can not / do not want to operate the required IT infrastructure, but still have to be very flexible in the market. A monthly rate for high-end IT makes sense, as many can not afford a “greater” investment. Furthermore, this can increase the attractiveness of the company as a modern employer, as well as permanently reduce the IT budget and thus provide for more innovation in the company.
Also in the focus of attention are larger medium-sized companies and corporations, which are looking for consolidation and simplification in an unmanageable IT landscape. However, this target group should be approached only after having gained experiences with small to medium-sized companies.

Market and competition

The market for these solutions is currently very large. Currently we can assume that in the region of Saxony, Saxony-Anhalt and Thuringia more than 2,000 medium-sized companies are approachable. With an estimated PC workstation density of around 30-50, this results in more than 60,000 workplaces that can be replaced as WaaS. Going one step further into the larger medium-sized companies, this number is doubled.

Market analysis

From our current accounts and various call actions we were able to filter out about 2,000 companies that meet the requirements for such a workplace as a service in our region. On average, there are 30 PC workstations that can be replaced with WaaS. Throughout Germany, there are even greater potentials. Also, there is currently no provider in Germany that actively offers or propagates such a model. Rental PCs or rental workstations are offered, although TFTs can also be included. Also framework contracts for the purchase of workplace technology are available in larger quantities. The topic Bring-your-own-Device is not very pronounced in Germany and is hardly used as an opportunity, whereby the requirements of young, talented employees are steadily increasing.

A complete service for a workplace, whereby maintenance, repair, hosting, individual equipment are reflected in a monthly flat rate, is available for instance on the US market. In Germany, this topic is not yet active in the market, although the required infrastructure already exists in many companies or IT system providers.

Market size

As described, in the first step, there are just under 2,000 companies with an average of 30 workplaces. This results in a total of about 60,000 potential WaaS. If per WaaS an average turnover of 35.00 EUR / month is generated, this results in a volume of 2.100.000,00 EUR per month. A margin of about 10-15 EUR per WaaS results in an estimated profit of about 600,000 EUR / month. Thus, around 25.2 million EUR can be realized in one year and a profit of 7.2 million EUR can be generated. Only the costs for hardware + hosting are included. Additional services may be included or added to the customer price.

Market growth

Currently, the major PC makers indicate that the market is stable and will grow slightly. We see this trend as similar. Thus, we can expect that the investment in new technology will remain stable in the long term. We see a growth of the market for WaaS in the gradual replacement of the old infrastructures by this new possibility. Furthermore, we see the corresponding potential in retaining the customer in the long term and, above all, being able to generate additional projects in the infrastructure or, alternatively, to map more services in the cloud data center.

Competitive analysis

Currently there is no relevant competition in Germany or the specified region of Saxony, Saxony-Anhalt and Thuringia. The big IT system providers have not yet recognized this trend and continue to work with the model of selling hardware and software. Should the WaaS model prevail, the big IT system providers will surely jump on the bandwagon and try to conquer the market in a price war. It takes an estimated 1-2 years to exploit the start-up business and to bind the majority of the customers to our company in order to avoid repression. Also, in order to survive after these 2 years on the market, the existing contracts with other services should be “beefed up” and constantly evolving.

Competitiors

Bechtle, Cancom, ComputaCenter, SHD, PDV, as well as other mid-sized IT system providers in the region. We currently do not see smaller vendors / suppliers able to offer the WaaS completely from a single source.

Barriers to market entry

A “shopping cart” should be defined in advance with which we go to the market. This should be defined by the basic requirements of the target group and gradually expanded in order to open up additional customers and customer segments. Furthermore, it has to be clarified how a financing of the hardware and software can be done. This requires partnerships with relevant companies. A final clarification can only be made by the sales management / management.

Goals

The goal is to win new customers, to increase sales and earnings of the company and customer loyalty. Furthermore, the aim is to strengthen the arxes-tolina brand on the market as an innovative and efficient company. Also, the sales can be expanded by area workplace technology and thus expanded according to manufacturers and / or distribution refunds. We also want to establish ourselves as a partner for the different manufacturers, as one of the first in the market to successfully implement this model and thus generate further business through leads from the manufacturers / partners. A market leadership in the field of WaaS is of course desirable.

Short and medium term goals

In the short term, more companies in the region are to be reached out to with a special, not yet existing service, to inspire arxes-tolina GmbH and to take a first step in looking for companies as partners. Furthermore, steady sales should be generated and the capacities in the cloud data center should be utilized. Likewise the consultation of the enterprises should stand in the foreground and thus generate additional business.

In the medium term, the companies are to be tied to arxes-tolina and looked after holistically by us.

Strategy

  1. Definition of a corresponding “basket” of hardware, software and services that can / should be offered
  2. Pricing internally and for the customer so that corresponding statements can be made on-site by the distributor.
  3. Create special incentives for the customer (benefits, special services, demonstration, …)

Marketing

Circuit of a message on the website. Flyer for sales. Possibly a time-limited e-mail signature. Special “goodies” placed on the customer’s premises after installation, such as an arxes-tolina mousepad, arxes-tolina gummy bears, original equipment with pens, notepads, erasers, paperclips, etc. in arxes-tolina design. Display of a logo of arxes-tolina upon registration. Establishment of a customer portal for booking or overview of currently used capacities, workloads, etc.

Eventually, special customer workshops for conversion, i. Invitation to all concerned employees with brief presentations by the management of the customer and arxes-tolina specialists on the purpose of the changeover, explanation of the changes and possibly also trial operation further possibilities in this construct (cross-selling).

Other ideas are e.g. set up a demo center where customers can be invited, or build a test environment for admins for training purposes. Establishment of a demo environment for distributors to show possibilities in the on-site appointment.

Product

The product consists of hardware, software, cloud services and a service or even the user help desk.

As an added value for the customer they can focus on their core business, enthusiastic and motivated employees, a flexible and clear cost structure in IT, as well as a reduced effort for operation and maintenance of the workplace technology. Furthermore, an appropriate SLA determines in which time frame the maintenance takes place, or how long employees can not or only partially work if the technology fails. The responsibility for this goes to the service provider and can be calculated out as a risk in the company.

Also accounting technology can have positive effects, since the technology is no longer included in fixed assets and must be depreciated, but flows into the operating costs. Thus tax can also add value to the company. Also, the billing of IT components on cost centers / departmental level will simplify controlling.

Price

Currently we expect an estimated price of about 35 € net / month for one WaaS. The internal costs should not be more than 25 € / month. This includes hardware, software and services.