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Hierarchical Approach for Green Workload Management in Distributed Data Centers reducing energy bill and carbon footprint

Periodic Reporting for period 1 - EcoMultiCloud (Hierarchical Approach for Green Workload Management in Distributed Data Centers reducing energy bill and carbon footprint)

Reporting period: 2015-05-01 to 2015-08-31

The present action aims to validate the technical feasibility and business viability of an innovative technique - i.e. EcoMultiCloud developed by the Italy-based workload management software specialist Eco4Cloud (E4C) - allowing to perform workload consolidation on distributed data centres, which are typically distant on a geographical scale and remotely connected through the network.
EcoMultiCloud is a profitable solution today. Data centres (DCs) are the fastest growing category of ICT emissions. The demand for greater energy efficiency minimizing environmental impact and consumption energy is therefore imperative. The efficient utilization of resources in the DCs can be essential to reduce costs, energy consumption, carbon emissions.
In particular, the EcoMultiCloud solution can offer the following unique features, in comparison with existing competitors: scalability, modularity and autonomy from a technology perspective; reduction of power consumption and carbon emissions (up to 60%), reduction of energy costs, SLA and Quality of Service Management, load balancing among different sites, inter‐DC traffic reduction from a business perspective.
The feasibility study for the EcoMultiCloud solution has been developed according to the following main activities:
• Analysis of the value proposition and technical feasibility of the proposed solution, including the definition of a work plan for phase 2 and relevant partnerships);
• Definition of a specific business plan for the proposed solution, including the following analysis: market size and barriers, customer groups and needs, competitors and strategy to face competition, SWOT, business model, go-to-market strategy and commercialisation plan, financial plan.
• Definition of existing relevant IPRs and knowledge protection plan.
The performed activities allowed us to:
a) Verify the interest in EcoMultiCloud solution with potential customers. In particular, we received the expressions of interest from Telecom Italia for participating in the development and testing of the solution in Phase 2.
b) Define the business model to be followed for our solution commercialization, also based on feedback from engaged customers
c) Fully evaluate the technical and operational feasibility of transferring the Workload consolidation solution from a single DC to the Inter-Cloud scenario. As well as perform a risk assessment to identify the technical gap to be filled and identify the specific tasks which are beyond our main expertise.
d) Design a clear, measurable and realistic Work Plan for the next 18 months, including all the tasks to be performed in order to upgrade our current solution to a TRL9, including subcontracted ones.
e) Finally, assess the steps in the roadmap from testing and validating the final version of EcoMultiCloud solution in an operational environment to building the commercialization chain analysing key stakeholders. Define the marketing strategy to be followed.
The feasibility study and business plan developed in phase 1 stated that:
• The full engineering and market preparation (achieving TRL9) costs of EcoMultiCloud are initially estimated in 1.000.000€.
• Economies of scale and deals with strategic partners will allow us to keep operational costs up to 200.000€/year (in 2019). Including marketing, salaries and other costs, the EcoMultiCloud solution will cost about 1.470.000€/year (in 2019).
• Starting price of EcoMultiCloud is initially defined at 40.000€ for annual subscription fee, plus the following additional features (to be agreed with the customer):
o Workload consolidation: 875€ for customer server
o Smart Balloning: 350€ for customer server
o Troubleshooter: 65.000€
o Capacity Decision Support Manager: 94.000€
• Direct sales of EcoMultiCloud are expected to be 18 by 2019 (conservative business plan). Annual revenues by 2019 are expected to be 3.552.000 with an expected positive balance already in 2017-2018.
• The foreseen ROI is thus 143%.
• A three years analysis of a standard deployment shows an impressing ROI of 111% and a pay-back time of 7.1 months in typical scenarios for target customers (i.e. DC and cloud providers).
• Next planned objectives for the EcoMultiCloud solution development will be mainly focused on:
o Upscaling and adding new features to the existing framework, boosting its readiness level from TRL7 to TRL9.
o Assessing the effectiveness of the EcoMultiCloud solution in real-world scenarios and thus further demonstrate its value proposition (technical and economic) with a real potential customer (Telecom Italia).
o Commercialisation activities, where the obtained results will also act as a showroom for E4C with other potential customers.
In order to achieve the three objectives above, E4C will request a Phase 2 SME Instrument funding to cover the expected development costs. The proposed project will end up with the lauch of MultiEcoCloud in Italy.
After the end of the requested Phase 2 SME Instrument funding, it will be necessary to support the further development of EcoMultiCloud, the organic growth of users and the involvement of industry players in European countries, such as Germany and UK, or in the US (where the DC market is bigger).
The economic resources to carry on the aforementioned work will partly come from the expected profits and partly from the access to new private financing, such as equity or debt facilities as foreseen by the Phase 3 of the SME Instruments.
Actually, the goal of the management board of E4C is to leverage the H2020 SME Instrument programme as follows: Phase 2 to increase the overall value of the company and product; and then Phase3 to close a Round A of funding with top European venture capital to continue boosting E4C growth.
SWOT Analysis