Farpoint· Internal Executive Briefing
Draft · For Executive Review
Japan Market Entry

The Cloud Ace Partnership

A proposal for entering the Japanese enterprise market through an exclusive distribution partnership with Google Cloud's 2026 Japan Partner of the Year — without a Japanese subsidiary, without local hires, without operational risk on Farpoint's balance sheet.

At a Glance

Four numbers that frame the deal.

Partnership shape
1
Exclusive Japan distributor. Cloud Ace owns the customer contract, JPY billing, JCT, L1+L2, GCP infrastructure, and FDE employment. Farpoint stays in Vancouver — no JP entity.
Seat price tiers
¥15K– ¥30K
Standard (Qwen 397B) / Premium (Kimi K2.6) per seat per month. Forward $500/seat Premium-Plus ceiling as model efficiency matures.
18-month bookings floor
$2MTCV
$500K cumulative by month 12, $2M by month 18 — miss either and exclusivity converts to non-exclusive.
FDE staffing
CAemploys
Cloud Ace hires & pays. Farpoint certifies & earns royalty (~$1K/mo per customer + $20K/yr per certified FDE). Zero JP labor risk for Farpoint.
Commercial Architecture

How the partnership flows.

The customer signs with a Japanese company, pays in yen, gets Japanese-language service. Farpoint never touches the end-customer relationship — and never accrues a Japanese tax footprint.

🏢
Japanese Enterprise
End Customer
Banks · Manufacturers · Large tech
50–500 developer seats
JPY contract
🇯🇵
Cloud Ace 株式会社
Exclusive Distributor
Sales · L1+L2 support · JCT billing
GCP infrastructure · contract holder
USD wholesale
🇨🇦
Farpoint Technologies
Software Vendor
Product · L3 escalations · FDE
Vancouver, no JP exposure
Why this shape, and not the alternatives
Not a joint venture — would require Japanese entity, capital injection, two unfireable Japanese employees. Not direct sales — Farpoint has no JP-language sales team, no JP-resident headcount, no procurement credibility with Japanese banks or manufacturers. Not a referral arrangement — Cloud Ace would not absorb L1/L2 support burden without owning the customer relationship. The distributor model is the only structure that lets us reach Japan without restructuring Farpoint.
Operating Model

Support split: language, hours, ownership.

The single most important operational decision in this partnership is keeping Farpoint out of Japanese-language customer support. Cloud Ace owns the first two tiers in Japanese; we own escalations in English with translation.

Level 1
Cloud Ace · Tokyo
LanguageJapanese
HoursJP business hours
CoverageInitial triage, account questions, basic config
SLAFirst response < 4 business hours
Level 2
Cloud Ace · Tokyo
LanguageJapanese
HoursJP business hours
CoverageInfra troubleshooting, MCP setup, deployment issues
SLAResolution or escalation < 24 business hours
Level 3
Farpoint · Vancouver
LanguageEnglish (translated)
HoursBest-effort 24h
CoverageEngineering escalations, product bugs, model issues
SLABacked by FDE retainer for customers ≥25 seats
Unit Economics — Foundations

Two tiers, one cost curve.

We offer two seat-priced tiers for the Japanese market. The Standard tier is Fabric-Large (Qwen3.5-397B-A17B, MoE) on shared compute — the land-and-expand SKU. The Premium tier is Fabric-Premium (Kimi K2.6, 1T parameters) for heavy reasoning workloads, requiring at minimum an H200 node, ideally GCP's a4-highgpu-8g (8× B200). Each generational hardware refresh meaningfully reduces our cost-to-serve.

Standard
¥15,000/月
~$100 USD / seat / monthF2
  • Model: Fabric-Large (Qwen 397B MoE, 17B active)
  • Compute: Shared multi-tenant inference
  • Target: Mid-market dev teams, land-and-expand SKU
  • Best for: Smaller teams, less mission-critical workloads, customers entering the Fabric ecosystem
Premium
¥30,000/月
~$200 USD / seat / monthF3
  • Model: Fabric-Premium (Kimi K2.6, 1T params)
  • Compute: H200 minimum, B200 (a4-highgpu-8g) ideal
  • Target: Enterprise dev teams, heavy reasoning workloads
  • Best for: Mission-critical agents, large teams, sovereign requirements, customers willing to pay for ceiling capability
Forward target: Premium-Plus enterprise tier at $500 / seat / mo (¥75K/月)F4 as model efficiency and seat-density economics mature. 2027–2028 outlook
The Seat-Density Constraint
Why the tier ladder is gated by model efficiency, not just price.

A single GCP a4-highgpu-8g node costs roughly ~$20–25K/month at Cloud Ace partner pricingS2. The break-even seat-count per node tells us what's actually viable today vs. aspirational.

Standard @ ¥15K — Today
~250 seats / node
To break even on compute at $100/seat. Healthy margin requires 400+ seats per node. Qwen 397B-A17B's small active param count makes this tractable today.
Premium @ ¥30K — Today
~125 seats / node
Kimi K2.6 (1T params) is heavier — fewer seats per node. Margin is tight until utilization improves with B200 + sustained customer base.
Future — When 27B-class works
500+ seats / node
A future Qwen 3.7-class 27B model on B200 could serve 500+ seats per node — unlocking strong margin at the Standard tier. Today, 27B-class models do not deliver acceptable agent quality.F5
Strategic implication: The Standard tier launches on Qwen 397B-A17B (the smallest model that meets the production bar today). The aspirational unit economics — $500/seat Premium-Plus, ¥15K Standard at strong margin — unlock when (a) Cloud Ace gives us favorable B200 utilization and (b) a 27B-class model passes our quality bar. Both are 2027 questions, not 2026 questions.
Cost to serve (today, H200)
~$3 / M tokensA1
Internal floor/ceiling estimate for Kimi K2.6 on a single H200 across realistic concurrency. Has not been independently validated.
Cost to serve (B200 target)
$1.5–2.5 / M tokensS1
Derived from GCP a4-highgpu-8g Tokyo list (~$40/hr est.) at conservative throughput assumptions. Subject to negotiated partner discount.
JP usage / seat
50M tokens / moA2
Estimate for Japanese enterprise developer cohort. Will be measured once Cloud Ace pilots are in production.
GCP A4 Tokyo (8× B200)
~$40 / hr listS2
Estimated from us-central1 list $34.24/hr + Tokyo regional uplift. Premier-partner negotiated rate likely 15–30% below.
Reference legend: S Sourced from external data A Farpoint assumption (not validated) P Pending Cloud Ace input F Farpoint proposal / decision Hover any badge for a one-line note · full list at the bottom of this brief
Until Cloud Ace confirms their H200 and B200 hourly pricing — and how Fabric token revenue can flow back to make those nodes more profitable than standalone hourly utilization — every margin number we propose is provisional. We have asked. — Outbound to Ryo Takano, 24 May 2026
Two arguments Cloud Ace will use to defend the price
01 Productivity / ROI
3.6%
of dev TCO at ¥30K/月A3
10–30%
published AI-coding productivity liftS3
=
3–8×
ROI at the floor / ceilingF1
"Independent research on AI coding tools shows productivity lift in the 10–30% range. Fabric needs only ~3.6% to pay for itself at this price. Even at the lowest end of published gains, ROI is 3–8×."
02 Sovereignty — the closer
"You're paying a 50% sovereignty premium. If you don't want to pay it, send your tokens to DeepSeek 4 hosted in China — you'll save the money. We're not going to argue with that decision."
Japanese enterprise — particularly banking, defense, government-adjacent, and any company touching IP-sensitive customer code — is viscerally opposed to PRC-jurisdictional inference. The unspoken alternatives are Anthropic / OpenAI in the US (no JP residency, US CLOUD Act exposure) or DeepSeek / Qwen via China-hosted providers (PRC jurisdiction, irreversible IP exposure). Fabric on Cloud Ace's Tokyo infrastructure is the only "neither US nor China" option for sovereign Japanese inference at this capability tier. The price premium is the value.
Note on positioning: Crafting the customer-facing pitch is Cloud Ace's responsibility, not Farpoint's. These two arguments are how we'd defend the price internally; Cloud Ace has stated they feel strongly they can sell this story in the Japanese market. We trust their judgment on local positioning.
Pricing Strategy

Three ways to package the same underlying economics.

The cost-to-serve and Japan premium are constants. What varies is how the customer experiences the bill — and which party absorbs token-volume variance. Each strategy below uses the same 100-seat enterprise reference deal so they can be compared on like terms.

Bundled Subscription

The Premium tier (¥30,000/月) from the tier ladder. One yen-denominated monthly fee per developer covers software + managed inference + L1/L2 support.

Customer-facing price · 100-seat reference deal

¥30,000/ seat / mo
$200 USD/seat/mo · 100-seat enterprise = $240K gross subscription / year + $5K/mo FDE + $50K setupF10
  • All-inclusive: software + managed inference (Kimi K2.6 on Cloud Ace GCP) + L1/L2 support
  • Fair-use cap protects against extreme power-user varianceA6
  • Yen-denominated, monthly, single ringi-friendly line item
  • Setup fee billed separately (~$50,000 one-time)
  • FDE retainer mandatory for customers ≥25 seats ($5K/month, ¼ FTE)

Subscription revenue split — provisionalP1

75%
15%
10%
Compute (CA pass-through)
Distribution (CA margin)
Software (Farpoint)
Cloud Ace take · Y1
~$216K
Farpoint take · Y1
~$74K + FDE royalty + $50K setup
Provisional split assumes today's H200 cost-to-serve. B200 + sustained utilization improves Farpoint software margin materially — that's the upside we expect to capture as the partnership matures.

Why this works

  • Single ringi-friendly line item — JP procurement loves predictable annual SaaS pricing
  • Customer never sees variable token bills, which historically kill enterprise deals in Japan
  • Farpoint cohort-level averaging makes power-user variance manageable
  • Cloud Ace pockets any compute efficiency below the 40% reimbursement
  • Same shape as Claude Max / Cursor Business — established mental model

What to watch

  • We absorb token-volume variance — must enforce a credible fair-use policy
  • Power users who exceed 100M tokens/month could erode unit margins
  • Pricing is opaque to customer (no per-token visibility) — some sophisticated buyers prefer transparency
  • If cost-to-serve assumption is wrong, the 45% software margin compresses fast
Best for Default SKU for traditional Japanese enterprise — banks, insurance, manufacturing, established tech. Procurement and finance both prefer the predictability. This is the SKU that wins the first ten logos.

Per-Token Pricing

API-style consumption billing. Customer pays a small base license for the harness plus a per-token rate for inference. Closest in shape to the Anthropic or OpenAI direct APIs.

Niche — sophisticated buyers only

Customer-facing price

¥600/ 1M tokens + ¥10K base
~$4 USD/M tokens + ~$66/seat/mo base. At 50M tokens/seat/mo → ~$266/seat/mo all-in (above Premium tier).F12
  • ~30% sovereign-Japan premium over $3/M cost-to-serve (provisional)
  • Variable usage — no fair-use enforcement required
  • Base license mandatory for the harness / IDE / IP, regardless of usage
  • Customer absorbs all token-volume variance
  • Same setup fee + FDE retainer structure as Bundled tier

Revenue split — provisionalP1

60%
15%
25%
Compute pass-through
Distribution margin
Software margin
Cloud Ace take · Y1
(100-seat @ 50M tok/mo)
~$240K
Farpoint take · Y1
~$80K + FDE royalty + setup
Same economic shape as Bundled — just unbundled. Customer sees the token meter, Farpoint margin is sensitive to actual usage running closer to or further from the 50M/seat assumption.

Why this works

  • No token-volume variance risk for Farpoint — perfect economic alignment
  • Heavy users self-fund their own consumption
  • Pricing is transparent and auditable — sophisticated buyers can model it precisely
  • Cleanest unit economics — no fair-use enforcement, no power-user cliffs
  • Natural fit for AI-native digital businesses (game studios, ML teams, hyperscalers)

What to watch

  • JP enterprise procurement struggles with unpredictable monthly costs — ringi process is incompatible
  • Finance teams cannot accurately budget — drives customer anxiety
  • Requires usage dashboards, alerting, and cap controls Farpoint hasn't built yet
  • Wrong primary SKU for the Cloud Ace channel — would shrink the addressable market
Best for Available as a secondary SKU for digital-native or AI-forward customers — game studios, ML platform teams, fintech engineering. Should not be offered to traditional Japanese enterprise as the default; it will lose deals.

Hybrid — Base + Overage

A base seat fee includes a generous token allowance; heavy users pay overage. Closest in shape to GitHub Copilot Business or Cursor's higher tiers.

Enterprise upsell tier

Customer-facing price

¥18,000/ seat / mo + overage
$120 base/seat/mo + 25M tokens included. Overage at ~¥600/M (~$4 USD). Typical JP user (50M/mo) → ~¥33K/月 all-in.F13
  • Base covers the harness + 25M token allowance per month
  • Light users (under 25M tokens/mo) only pay base — attractive entry tier
  • Heavy users (100M+ tokens/mo) self-fund their consumption above base
  • Setup fee + FDE retainer structure unchanged
  • Most modern AI SaaS shape — where GitHub Copilot Enterprise and Cursor tiers are converging

Revenue split — provisionalP1

65%
15%
20%
Compute pass-through
Distribution margin
Software margin
Cloud Ace take · Y1
(100-seat @ 50M tok/mo)
~$258K
Farpoint take · Y1
~$66K + FDE royalty + setup
Provisional split assumes today's H200 cost-to-serve. Margin profile is similar to Bundled tier but more sensitive to actual usage distribution across the customer base.

Why this works

  • Combines budget predictability with growth-aligned upside
  • Lower base price is attractive to mid-market and trial customers
  • Variance risk is shared — Farpoint absorbs only base-tier variance, customer pays for overage
  • Natural upgrade path from light to heavy usage as adoption grows inside the customer
  • Industry-standard shape — matches where Copilot Enterprise and Cursor higher tiers are going

What to watch

  • Most complex of the three to explain to JP procurement — requires usage forecasting
  • Cloud Ace L1 must handle overage-billing questions in Japanese — training burden
  • Lower base price means Farpoint margin is thinner per seat (unless overage volume materializes)
  • Requires accurate per-customer token telemetry and invoicing infrastructure
Best for Mid-market customers (25–100 seats) where adoption pattern is uncertain. Also a strong upgrade SKU for customers that start on Strategy A and want to escape the fair-use cap.

BYO Compute — Customer-Contracted Dedicated Infrastructure

Customer commits to a multi-year GCP compute contract directly with Cloud Ace. Farpoint sells software only — no per-token, no compute pass-through, no variance risk for anyone. The cleanest unit economics shape if the customer can absorb the compute commitment.

Large customer / dedicated workload

Customer-facing structure

$150Ksetup + $100/seat/mo license
Plus customer's own GCP compute contract with Cloud Ace · 1, 2, or 3 year minimum termF11
  • Compute: Customer contracts a4-highgpu-8g directly with Cloud Ace, 1/2/3-year term — no hour-to-hour or week-to-week. Cloud Ace gets the full compute revenue locked in for the term.
  • Setup: Farpoint deploys models, configures inference stack, integrates with customer infrastructure (~$150K one-time)
  • License: Farpoint software license at ~$100/seat/mo flat (no compute embedded)
  • No per-token billing — customer's compute is sunk cost, they use as much as they want
  • FDE retainer optional but recommended ($5K/mo, ¼ FTE)

Revenue structure — 100-seat customer, 1× a4 node, 1-year term

GCP compute (1× a4 × 12mo)S2 ~$300K → CA
Setup fee (one-time)F11 $150K → FP
Software license (100 seats × $100/mo × 12) $120K → FP
FDE retainer ($5K/mo × 12) $60K split CA/FP
Cloud Ace take · Y1
~$345K
Farpoint take · Y1
~$285K
Cleanest economics in the brief: Farpoint captures clean software margin with zero compute exposure. Cloud Ace locks in their compute revenue for the contract term — exactly what their GCP partner business wants.

Why this works

  • Best Farpoint unit economics — no compute on our P&L, pure software margin
  • Cloud Ace locks compute revenue for 1–3 years — their GCP business loves it
  • Customer owns the compute relationship cleanly (clear cost transparency)
  • No variance risk for any party — usage is unbounded within contracted capacity
  • Natural shape for customers who already have GCP commitments or capacity requirements

What to watch

  • Requires customer with budget to commit 1+ years of dedicated compute (~$300K+ minimum)
  • Underutilized compute is wasted spend — customer needs to know they'll actually use it
  • Smaller customers can't absorb the compute commitment — narrows the addressable market
  • Setup work is real engineering effort — $150K is the floor, complex deployments cost more
Best for Customers with predictable, sustained dev-team workloads of 50+ engineers who want maximum cost transparency, dedicated infrastructure, and the lowest per-seat license fee. Also strong fit for customers that already have GCP Tokyo commitments or sovereign-cloud requirements that benefit from owning the underlying infrastructure relationship.

Side-by-side comparison

Dimension A · Bundled D · BYO Compute B · Per-Token C · Hybrid
Typical customer total / seat / mo (100 seats @ 50M tokens) ¥30K ¥40K equiv* ~¥40K ~¥33K
Farpoint Y1 take per 100-seat dealP1 ~$74K + extras ~$285K ~$80K + extras ~$66K + extras
Cloud Ace Y1 take per 100-seat dealP1 ~$216K ~$345K ~$240K ~$258K
Predictability for customer High Very high (fixed) Low Medium
Token-variance risk borne by Farpoint None (capped by capacity) Customer Shared
JP procurement fit (Farpoint judgment, not survey)F14 Good Good (large customers) Poor Good
Best customer profile Default SKU Large dedicated workloads Sophisticated buyers Mid-market upsell

* BYO Compute total includes customer-paid compute contract to Cloud Ace plus Farpoint software license; setup amortized over Year 1.

Margin Architecture

Where every dollar of revenue actually goes.

Provisional architecture for the recommended Bundled tier (Strategy A). All compute / distribution / software split percentages depend on Cloud Ace's actual H200/B200 wholesale pricing — final numbers locked after their response to the 24 May email. Setup fees and FDE retainers are not provisional: they always flow 100% to the party performing the labor.

⚠ Provisional split: The 75/15/10 split shown below reflects today's H200 cost-to-serve at ~$3/M and 50M tokens/seat/month. With B200 + sustained utilization, software margin should improve materially. Numbers will be re-anchored once Cloud Ace confirms wholesale pricing.P1
Revenue stream Cloud Ace · today Cloud Ace · B200 target Farpoint What it funds
Subscription · compute reimbursementP1 ~75% ~45% H200/B200 cost pass-through — Cloud Ace captures any efficiency upside above the contracted rate
Subscription · distribution margin 15% 15% Cloud Ace selling effort + L1/L2 support (steady across hardware generations)
Subscription · software margin ~10% → ~40% Farpoint product R&D + best-effort L3 for sub-threshold accounts. Today's margin is tight; B200 + utilization improvements is where Farpoint captures upside.
Setup fee (one-time, ~$50K Bundled / ~$150K BYO Compute) 0% 0% 100% Farpoint deployment engineering — direct labor compensation
FDE retainer ($5K/mo, mandatory ≥25 seats) 80% 80% 20% royalty Cloud Ace pays the JP engineer (their labor cost + admin); Farpoint earns ongoing certification royalty. Plus $20K/FDE/yr platform fee.
Why the FDE retainer carries the L3 obligation
Rather than charge a separate Premium Support SKU, we bundle the L3 SLA into the FDE retainer. The customer gets one named engineering relationship — a Farpoint-certified, JP-resident, Cloud Ace-employed engineer — who handles both proactive work (code reviews, MCP integrations, model upgrades) and reactive escalations. AWS gives Enterprise Support customers a TAM; we give Cloud Ace customers an FDE. The shape is more valuable, the customer story is cleaner, and it lets the (eventual) software margin focus on product R&D rather than service obligations.
Performance Gates

What Cloud Ace must deliver to keep exclusivity.

Exclusivity isn't a gift — it's a commitment. Cloud Ace gets sole distribution rights in Japan in exchange for hitting two cumulative bookings checkpoints. Miss either and exclusivity converts to non-exclusive, allowing Farpoint to sign other channel partners.

Months 1 – 6 · Enablement
No bookings minimum
Cloud Ace ramps technical enablement, completes Japanese UI localization (Farpoint commitment, July 1), trains L1/L2 staff. Pipeline-building only — no quota pressure.
Month 12 · First Checkpoint
$500K cumulative gross TCV
Hard floor. Two or three landed deals. Miss this number and exclusivity auto-converts to non-exclusive (with a 30–60 day cure window).
Month 18 · Exclusivity Bell
$2M cumulative gross TCV
If hit, exclusivity continues; margin structure auto-renegotiates with a 90-day window. If missed, exclusivity converts to non-exclusive — Farpoint can sign additional JP distributors immediately.
!
The single non-negotiable
During the exclusivity term, Cloud Ace cannot carry a competing AI coding agent — no Cursor, no Devin, no GitHub Copilot Enterprise, no Cline, no Cognition. This protection is more valuable to Farpoint than the bookings floor. We will accept a lower booking minimum before we accept a softer competing-product clause.
Staffing

How we staff Japan without restructuring Farpoint.

Two separate hiring tracks, two separate decision triggers, two separate funding sources. Neither requires Farpoint to establish a Japanese entity in year one.

Track 1 — Japan Partnership Lead (Kaoru, Vancouver-based)

Japanese citizen, native speaker, business-and-sales profile with technical literacy. Already on the Cloud Ace correspondence chain. His personal optimization is permanent residency for his family (wife and kids already in Vancouver on visitor status; kids in private school on international tuition). Sponsoring him solves his goal and our goal in one move: a JP-native exec on Farpoint's payroll, in Vancouver, with no JP tax exposure.

Trigger
When to start LMIA
Signal
First Cloud Ace deal in ringi
Latest possible start that still gets Kaoru on payroll near revenue landing. LMIA filing itself is ~$5K; salary commitment begins ~3 months later when work permit issues.
~$5K upfront
Comp
Salary + commission
Base (LMIA floor)
~$85K CAD / year
Tiered commission: 18–20% of Farpoint net revenue to $1.3M; 10% to $3.25M; 5% beyond. Annual reset on tiers to avoid boundary effects.
~$10K / mo burn
Funding
Cash source
Bridge
Setup fees (front-loaded)
First Cloud Ace deal's $50K setup fee covers 5 months of Kaoru's base. Two such deals fund his full first year plus reserve. No cash drag on current runway.
$0 net runway impact

Track 2 — Forward Deployed Engineer

L3 escalation + proactive customer engineering, bundled into a single $5K/month retainer per customer (¼ FTE allocation). The structural question: who employs the engineer? Our default model keeps Farpoint out of Japanese employment law entirely.

Default Model

Cloud Ace employs · Farpoint certifies

Cloud Ace hires the engineer in Japan, handles all JP employment law, payroll, and benefits. Farpoint trains and certifies. Customer pays Cloud Ace for the FDE on a single JPY invoice. This is how SAP, Oracle, and ServiceNow run their JP Customer Success Engineers — through SI partners.

Step 01
Hire & Certify
Owner
Cloud Ace recruits · Farpoint certifies
Cloud Ace recruits a bilingual JP engineer (their JP HR + employment terms). Farpoint runs a 2-week Fabric FDE certification (Vancouver + remote), with annual recertification. Only Farpoint-certified engineers can be billed as "Fabric FDE."F6
2-week onboarding
Step 02
Deploy to Customer
Allocation
¼ FTE per customer
Engineer assigned to Cloud Ace customer at ~40 hours/month. Owns L3 escalations + proactive engineering work. Customer sees a named JP-resident engineer on the ground.
SLA-backed
Step 03
Scale the Bench
Trigger
Every 4–5 customers
As volume grows, Cloud Ace adds a new Farpoint-certified FDE for every 4–5 active customers (1 FDE serves 4 customers at ¼ FTE each = 1 FTE deployed). Farpoint earns continuing certification fees per FDE.
Recurring annual cert
FDE retainer economics — per customer per month Cloud Ace Farpoint
Customer pays Cloud Ace for FDE serviceF7 $5,000
Cloud Ace direct labor cost (¼ FTE @ ~$7K/mo all-in)A4 −$1,750
Cloud Ace HR / payroll / admin overheadA5 −$750
Farpoint certification royalty (20% of customer-facing fee)F8 −$1,000 +$1,000
Net per customer per month $1,500 $1,000
Plus: annual per-FDE certification fee (Cloud Ace → Farpoint)F9 — annual +$20K / FDE / yr
Why this beats the alternative for both sides
For Farpoint: No JP entity, no JP employment risk, no JP payroll, no JP severance exposure (firing in Japan is famously hard). We earn a clean recurring royalty stream (~$60K/yr from 5 active customers + $20K/yr per certified FDE) with zero labor risk. For Cloud Ace: New high-margin recurring revenue line they can sell as "Premier Engineering Services" attached to Fabric — also valuable for their broader GCP engineering bench. For the customer: One JPY invoice, one Japanese-language contact, a named engineer they can meet in person in Tokyo.
Backup option Farpoint-employed (phased evolution) — held as fallback if Cloud Ace can't run the certified-engineer model

If Cloud Ace declines to take on FDE employment (or struggles to recruit certified engineers in JP timelines), the prior plan was a phased Farpoint-employed evolution. Each phase delayed the next phase's cost commitment.

Phase 1
Bootstrap
Trigger
Deals 1–3 · $0 → $1M TCV
YVR-based senior engineer, partial allocation. Travels to Tokyo for kickoff week, mid-deployment, go-live per customer. Cloud Ace L1/L2 absorbs day-to-day support.
~25% of existing FT hire
Phase 2
JP Contractor
Trigger
2–3 logos · $1–2M TCV
JP-resident fractional contractor (業務委託). No JP entity required, no permanent-establishment risk under Canada-Japan treaty Art. 5. ~40% allocation.
~$10K USD / mo
Phase 3
JP Subsidiary
Trigger
$3M+ TCV · 5+ logos
Incorporate 株式会社, hire FT FDE + Solutions Engineer locally. Revenue at this stage comfortably justifies the fixed cost (≈10–15% of JP revenue).
~$320–450K USD / yr
Status

What's locked, what's open, what's pending.

The structure proposed above is the executive team's working opening position. Several inputs are still pending — primarily Cloud Ace's wholesale compute pricing — which will sharpen the margin numbers before counterparty engagement.

  1. Distributor model with Cloud Ace owning customer contract, JPY billing, JCT, L1+L2 Confirmed: Farpoint stays in Vancouver, no JP entity in year one
    Locked
  2. Cloud Ace employs FDE · Farpoint certifies · 20% royalty + $20K/yr per-FDE platform fee No JP labor risk for Farpoint. Backup option (Farpoint-employed phased) retained.
    Locked
  3. 18-month exclusivity floor: $500K by month 12, $2M by month 18 Dollar floor only, no logo gates, with 30–60 day cure window
    Locked
  4. No competing AI coding product during exclusivity Non-negotiable — more valuable than any margin point
    Locked
  5. Two-tier seat pricing: Standard ¥15K (Qwen 397B) · Premium ¥30K (Kimi K2.6) Forward $500/seat Premium-Plus ceiling as model + seat-density economics mature
    Locked
  6. FDE retainer $5K/month for ¼ FTE · mandatory for customers ≥25 seats L3 SLA bundled into the retainer; Premium Support SKU dropped
    Locked
  7. Cloud Ace wholesale compute pricing · H200 + B200 (a4-highgpu-8g) hourly rate Email sent to Ryo Takano 24 May 2026. Will lock all provisional margin numbers.
    Pending
  8. Final margin split percentages (compute / distribution / software) Provisional 75/15/10 today; B200 target ~45/15/40. Locks once Cloud Ace responds.
    Pending
  9. Fair-use cap thresholds for the Bundled tier Will be set from first 3–5 Cloud Ace pilot deployment telemetry
    Pending
  10. Kaoru hire (Japan partnership lead in Vancouver) Parked — to revisit once Cloud Ace deals are closing and revenue funds the role
    Parked
Methodology · Sources · Assumptions

Every number in this brief, traced to its origin.

An honest accounting of which claims are externally sourced, which are Farpoint internal estimates, which are still pending input from Cloud Ace, and which are pure Farpoint policy decisions. Hover over any badge in the brief for a one-line note; the full list is below.

SExternal source AFarpoint assumption (not validated) PPending Cloud Ace input FFarpoint proposal or decision
  1. S1B200 cost-to-serve range $1.50–$2.50 / M tokens
    Derived from GCP a4-highgpu-8g Tokyo list (~$40/hr est.) divided by realistic Kimi K2.6 throughput assumptions. Throughput estimate has not been benchmarked on B200; will be measured once we have B200 access. Range reflects conservative-to-realistic batching efficiency.
  2. S2GCP A4 Tokyo ~$40/hr list · Cloud Ace partner pricing ~$25K/mo per node
    Source: GCP public pricing for a4-highgpu-8g us-central1 = $34.24/hr on-demand ($24,992.86/mo). Tokyo regional uplift on A3/H100 historically runs 10–20%, so Tokyo A4 estimated at $38–42/hr list. Cloud Ace as a Premier Partner can typically secure 15–30% below list with committed-use volume, putting effective partner rate in the $25K/mo range. Per parallel research agent finding; not yet confirmed in writing by Cloud Ace.
  3. S3Published AI-coding productivity lift: 10–30%
    GitHub's controlled study of Copilot showed 55% faster task completion in a constrained environment; real-world net productivity studies (including peer-reviewed work and vendor-published case studies) typically discount to a 10–30% range when measured at the team level over time. This is the defensible range to cite to a JP enterprise CFO.
  4. A1Today's cost-to-serve ~$3/M tokens on H200
    Farpoint internal floor/ceiling analysis for Kimi K2.6 on a single H200 node across realistic concurrency. Not externally validated. The B200 estimate (S1) is the forward target; the H200 number is what we serve at today.
  5. A2JP enterprise dev token usage ~50M / seat / month
    Ryan's stated estimate for the Japanese enterprise developer cohort, positioned as higher than the US baseline reflecting heavier agent use among heavy-context JP enterprise workloads. Will be measured once Cloud Ace pilots produce telemetry; the actual number may be materially different in either direction.
  6. A3JP enterprise developer TCO ~¥10M/yr
    Directional estimate based on published JP industry salary norms for mid-career engineers at traditional JP enterprise (banks, manufacturers, established tech). Actual ranges span ¥8–14M; ¥10M used as representative midpoint. Not survey data. Reasonable to validate against published JP salary surveys before relying on this for material pricing decisions.
  7. A4Cloud Ace JP engineer all-in cost ~$7K/mo per FTE
    Estimate based on a JP-resident mid-level engineer at ~¥10M base + ~30% employer-side burden (social insurance, pension, retirement, bonus accruals). Cloud Ace's actual cost structure may differ. They will price the FDE retainer themselves based on their real cost.
  8. A5Cloud Ace HR / admin overhead on FDE labor
    Rough estimate. Real overhead allocation depends on Cloud Ace's internal accounting and how they allocate shared services. Used here only to illustrate that the $5K customer-facing price leaves room for Cloud Ace margin after labor cost.
  9. A6Fair-use cap thresholds (not yet defined)
    The Bundled Subscription model requires a fair-use cap to prevent power-user erosion, but specific thresholds are not yet defined. Will be set based on telemetry from the first 3–5 Cloud Ace pilot deployments.
  10. P1Subscription revenue split percentages
    All split percentages (compute / distribution / software margin) shown in the brief are provisional. Final percentages depend on Cloud Ace's confirmed wholesale compute pricing for H200/B200 and the actual cost-to-serve at sustained utilization. The outbound email to Ryo Takano (24 May 2026) requests the inputs needed to lock these numbers.
  11. F13–8× ROI calculation
    Simple derivation: at 3.6% cost-of-dev-TCO (A3), a 10% productivity lift returns 10/3.6 ≈ 2.8× and a 30% lift returns 30/3.6 ≈ 8.3×. Rounded to 3–8× for the headline. Calculation is arithmetically clean; inputs depend on A3 and S3.
  12. F2Standard tier ¥15K/月 ($100/seat)
    Farpoint pricing proposal — set at half the Premium tier to unlock the JP mid-market and serve as the land-and-expand vector. Validated against JP enterprise SaaS comfort range. Not yet customer-tested.
  13. F3Premium tier ¥30K/月 ($200/seat)
    Farpoint pricing proposal at the top of the comfort range for per-seat JP enterprise SaaS. Anchored to the Salesforce Enterprise pricing band in Japan. The CFO Argument section explains why this is defensible despite being 5× GitHub Copilot Enterprise's JP price.
  14. F4Premium-Plus aspirational ceiling $500/seat/mo
    Forward-looking target for a dedicated-cluster, white-glove enterprise SKU. Likely 2027–2028 once model efficiency and seat-density economics mature. Not yet quoted to any customer.
  15. F527B-class models don't deliver acceptable agent quality today
    Farpoint engineering judgment as of May 2026. Smaller open-weight models tested internally have not met the production bar for Fabric's agent workflows. Subject to change with future model releases (Qwen 3.7-class candidates expected late 2026 / early 2027).
  16. F6Fabric FDE certification as the IP lock
    Per the distributor agreement, only Farpoint-certified engineers can be billed as "Fabric FDE." This prevents Cloud Ace from generically selling AI engineer services under the Fabric brand without continued certification fees, while still letting them build their own engineering bench.
  17. F7FDE retainer $5K/mo for ¼ FTE
    Customer-facing price for Fabric FDE service. Decided by Ryan as the right balance of customer-affordability + Cloud Ace labor cost coverage + meaningful royalty flow to Farpoint.
  18. F820% Farpoint royalty on FDE retainer
    Farpoint proposal. Could move within a 15–25% range during negotiation. The royalty compensates Farpoint for ongoing certification, training updates, code-base access, and IP licensing.
  19. F9Annual per-FDE certification fee $20K
    Farpoint platform-style fee paid by Cloud Ace per certified engineer. Funds Farpoint's training program, code-base access, and recertification (annual). Provides a recurring revenue line independent of customer count.
  20. F10Premium tier 100-seat reference deal economics
    All deal math in the Strategy Tabs uses the same 100-seat enterprise reference deal so strategies can be compared on like terms. Real deals will vary materially. Pre-Cloud-Ace-pricing-response, splits are provisional.
  21. F11BYO Compute setup fee $150K + license $100/seat/mo
    Farpoint pricing proposal for the dedicated-infrastructure model. Setup fee covers FDE labor for deployment (1–3 engineer-months); license is reduced from the Bundled tier because compute is not embedded.