YellowDog believes there is already enough computer power in the world. But there is an imbalance between supply and demand.
YellowDog securely harnesses underutilised computer power, enabling organisations to deliver incredibly quickly and cost effectively, through leveraging this limitless compute on demand.
There are multiple markets and applications. YellowDog has started with the computer graphics and 3D animation industry – this alone is forecast to be a $40bn industry by 2019 growing globally at 17.89% CAGR.
The next market YellowDog will address is enterprise Data Centre Systems and Public Cloud Management – where the worldwide spend was expected to be $174bn in 2016.
It is estimated that the average enterprise server utilisation is between 6% & 12%, with 30% of servers in data centres being turned on and then never used.
Despite this large amount of underutilised computer power, enterprises have batch applications that run late, for example:
•Banks have applications that run nightly to understand their stock market position. Often they run behind which means that trading starts before they complete. This risk is measured as a % of their balance sheet.
•Telcos run regression tests before changes. Speeding them up improves time to market.
•Financial service institutions run complex models that can take weeks to run, delaying decision making.
By increasing the utilisation of these existing servers, and then carefully managing how these applications burst to the public cloud, we believe that large banks and corporations could save substantial amounts of money per year.
Substantial accomplishments to date
•Joined SETsquared – the Global #1 University Startup Incubator.
•Raised £1.2m through crowdfunding and angel investment.
•Achieved a commercial launch of its rendering product in November 2015.
•Over 1,000 users signed up online with activated accounts.
•Through its relationships with public cloud providers has access to more than 198,000 cores.
•Won six awards: Oracle Excellence in Innovation & Disruptive Technology Category winner; Bristol Life’s Technology & Innovation Award; South West Business Insider’s award to Gareth Williams for being one of the 42 entrepreneurs to watch under the age of 42, Bristol Post’s Startup of the Year Award and Bristol Life’s Technology & Innovation Award.
YellowDog On Premise is monetised by:
•A license for each on premise and on demand node used by YellowDog for processing the customer’s batch jobs. In a typical deployment for a global bank, there would be tens of thousands of nodes.
•A license for each batch application deployed on YellowDog.
Use of proceeds
This investment will help YellowDog deliver three proof of value projects where at least one of these will be in a new sector for YellowDog.
•Staff recruitment, pension & training: 18%
•Office Costs: 9%
•Management Team: 5%
•Sales & Marketing: 4%
•Other costs: 7%
Please note that the company currently has a £250k overdraft facility with an interest of 15% per year. The money raised in the campaign will not be used to pay this loan.
The team at YellowDog have been in discussions with 01Ventures for an investment of up to £2m at the same valuation as this campaign. They have recently signed a non-binding term sheet and conversations are ongoing for a potential investment in the coming months. The investment is subject to further negotiations and conditions and there is no guarantee that this will go through. The investment would be formed of two equal tranches, the first being paid on completion and the second on contracting the first paid proof of concept to a customer for YellowDog On Premise. The investment would be for preference shares which enjoy 1x non-participating preferential return on exit or liquidation. Closing of this additional funding will not be a precondition to closing of the Seedrs funding round.
The target market for YellowDog On Premise is enterprise businesses, with more than 500 employees, that have large batch processing applications.
YellowDog will start with our current customers in the media/ visual effects and architectural sectors, then moving to banking, then to telecommunications.
Characteristics of target market
The characteristics of the target market for YellowDog On Premise can be summarised as:
• Enterprise organisations with more than 500 employees.
• On a daily basis, run large, time-critical, batch processing applications.
• Those large, time-critical batch processing applications run late due to lack of availability of compute.
• Sophisticated IT set up, including experts in-house.
• Are considering multi-public cloud adoption.
Sectors include: banking, telecommunications, media & entertainment, retail, healthcare, automotive, advanced engineering, oil & gas.
The go-to-market for YellowDog On Premise is different to the rendering product in that:
• It requires a dedicated and vertical-focussed enterprise sales team, based in each geographical region YellowDog, including customer acquisition, delivery and retention.
• Promotion will be through direct marketing, targeted industry events with analyst outreach, and networking.
• The YellowDog On Premise Platform will be licensed per application, with individual licenses for each on premise and on demand node used by YellowDog.
There are many organisations that help enterprises deploy applications on premise, to the cloud, or to a hybrid cloud. Notable examples include Microsoft, Oracle, HPE, Cap Gemini and VMWare. None help enterprises extend their compute resource to any machine, to any public cloud provider and to burst in a way that automatically optimises price/ performance decisions for that business; there are none like YellowDog.
The differentiators for YellowDog can be summarised as:
1. Allowing enterprises to reuse existing compute stock for applications – at limitless scale.
2. Normalising public cloud compute enabling consistent performance, regardless of provider.
3. Advanced machine learning to determine how much compute resource is needed to complete the processing on time, before the job starts.
4. Portability of applications between public cloud providers.
5. Uses an estimated >50% less carbon than other solutions as takes advantage of under-utilised servers and PCs rather than powering up new servers.