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Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - GROVF4.0 (Feasibility study for Grovf hardware accelerated no SQL database for Industry 4.0)

Teaser

Summary

During the SME instrument Phase 1 project an elaborate feasibility study was conducted to implement the following tasks: market research, an analysis of user needs and preparation of technical specification, IPR strategy development of business plan development for the future commercialization.

Software Big Data market is expected to grow at a twice bigger rate than the hardware one. The CAGR in the software is expected to reach almost 20% in the following 5 years. Using Big Data allowed the companies to achieve up to +10% in performance, up to +25% in productivity, and decreased maintenance costs by -40%. However, most of the current solutions are facing limitations due to increasing volumes of the real-time data as well as moving everything online. Moreover, the companies faced a need to work with unstructured data which is impossible with conservative database systems.

Existing hardware has problems in satisfying the needs of the companies, as it creates limitations on the processing units which results in the slowdown of the whole process line. FPGA acceleration allows to overcome these barriers and achieve efficient parallel processing. Analysis has shown that implementation of the technology can produce benefits in the number of industries: banking & finance, government, healthcare, insurance, telecom, manufacturing, etc.

The objective of the Phase 1 project was to develop a market entry feasibility study for GrowF FPGA-acceleration system commercialization that would include thorough market research, user need analysis, patent landscape analysis, and business model design. The SME instrument Phase 1 project allowed GrowF to conduct a feasibility study, improve the final design of the product, and prepare itself for commercialization of the innovative solution.

Work performed

An initial strategy for market research was to conduct a survey for 6K companies. Yet, during the process of analyzing the survey results was figured out that majority of the companies is not competent enough to answer the questions in a detailed manner; thus, another type of market research was chosen - interviews. Nevertheless, this kind of responses also did not display required amount of necessary information, that is why one-to-one meetings with potential partners / clients were arranged.

Overall, market research revealed that the market has a high growth rate. It can be described of medium competition intensity. The SMEs face the need for easy and ready-to-go device which does not require full-time maintenance. Potential market demand was identified. GrowF outlined the competitive advantages of its product, and, thus, finalized the initial market entry strategy.

During the patent landscape analysis GrowF thoroughly studied related patents, identified the potential limits to the innovation project, and decided on the further steps for the reliable IPRs establishment.

Finally, GrowF developed a business model and elaborated business plan, which would be used as a roadmap for commercialization of Growf FPGA-acceleration unit, as well as for further development of GrowF business. GrowF decided to enter the market in partnership with Amazon and other big players in industry through subcontractor strategy because it allows to get first cash flows and ensure relatively easy entry. In the following years, it is going to enter the market with a redeveloped product which will be more suitable for the needs of the market. GrowF should focus on collaboration with market leaders in order to generate the first cash flows and experience the market conditions, in order to predict and avoid further potential fails.

Final results

From the technology perspective, GrowF is working on modernizing its current product in order to become smaller and easier implementable. Another target is to achieve even better result in terms of performance acceleration.

From the business perspective, the team is working on the implementation of the commercialization plan. Upon obtainment of certificates and receiving IPR protection, GrowF will start its further expansion.

In the long term, GrowF will have a significant effect on many industries from manufacturing to medical. GrowF will help the companies to reach better performance indexes, which might result in cost efficiency advancements and overall price decrease on the final products.

Financial model: Financial model of Grovf LLC shows promising results, stating that first profit will be generated already in 2019. Profit margin is expected to decrease from 67% to 43%, because hardware products typically have lower margin than software products, but total profit is expected to be already EUR 95M in 2021.

Introducing products to the market: Commercialization of software and hardware products will be carried out using distributors and direct sales. Software product is estimated to be publicly available on Amazon Web services in 2019 and hardware product will be sold using channels of Xilinx

Market and competitors: GrovF will be facing expanding but very saturated and changing market. Big Data usage is growing so technologies that boosts effectiveness of data processing and storing, as well as reducing cost of this process are welcomed in the market especially for SMEâ€™s.

Strategy development: Marketing and Intellectual Property rights (IPR) strategies should be worked out in very detailed level. And strong partners should be attracted in order to unlock full market potential.