Q: Why is the cloud computing model increasing in the retail sector?
A: Many retailers have trimmed their IT staffs over the last couple of years in order to cut costs while sales were soft. That means there are tasks to do and not enough people available to perform them. Retailers are looking for help from outside sources to pick up some of those responsibilities. Based on the acceptance and track record of cloud computing, retailers have a comfort factor they didn’t have three or four years ago. Cloud computing has real benefits for retailers including:

• Lower costs
• Greater expertise
• Instant infrastructure
• More flexibility
• Higher reliability

Q: Are there certain sizes of retailer or types of retail models that best benefit from cloud computing?
A: For the medium to large retailer, where they may not have the depth on the bench to run or manage certain applications, they are good candidates for the cloud where the cloud provider offers both the infrastructure and application expertise.

Q: Are there certain types of applications that lend themselves best to the cloud environment within retail?
A: There is a broad range of applications being run in the cloud including ERPs and point solutions. It’s a full range of applications.

Q: What are some of the benefits that a retailer should expect from a cloud environment?
A: If it's a new application, retailers should expect a faster, lower cost deployment and lower internal costs because the cloud provider should be supplying the majority of the support. A retailer can expect higher SLAs and tighter security than they could provide internally. They should also expect more flexibility as their business changes over time – the ability to add or reduce computing power. In many cases, a retailer can also expect a more robust deployment. For a retailer providing their own infrastructure in support of a particular application, they often can’t provide redundancy that a cloud environment can offer.

Q: Security had been one of the concerns preventing retailers from moving applications to the cloud, what makes the cloud more secure today?
A: Any proper cloud provider will be a SAS 70 type II provider. This means they subject themselves to rigorous annual audits of their procedures, their physical plant, all the ways they handle the client’s data. SAS 70 is actually an accounting standard and is much more rigorous than most retailers would subject themselves to. This type of audit provides an easy way to make sure a provider is up to the highest standards for data security.

Q: What is the difference in the cloud options available such as public and private?
A: In a public environment customers are running on the same equipment and in the same environment with many other customers. This is typical in lower-cost applications such as email service. In private environments, the hardware is typically dedicated to a particular client or at least a secure partition is dedicated to a particular client. Although it’s hosted and managed in an outside data center, the hardware is truly dedicated to that particular client, so they end up getting a private network. In retail ERP, it is primarily running in private environments.

Q: Prior to cloud computing, the buzz was around Software as a Service (SaaS). What are the differences or commonalities between the two?
A: The most common definitions of the cloud, from some of the largest technologies companies in the world, actually include Software as a Service (SaaS), Platform as a Service, Infrastructure as a Service (IaaS) and Data as a Service (DaaS) within cloud computing. So by that definition, cloud becomes this ‘all-encompassing’ group of services that can be delivered over the Internet.

Q: For a retailer trying to decide if cloud computing is right for their company, what are some of the key factors that should be considered?
A: Retailers should look for a supplier that has a track record of providing the types of service needed and has referenceable clients. There are many applications that may require 10% of a person’s skill set or time to maintain. If the skills set is not available in house, it does not make sense to hire somebody to learn that particular platform and then have 90% of their time with essentially very little to do. That’s a great candidate for the cloud. If located in a geographic area where it is difficult hiring qualified people, or labor rates are high, the cloud model is ideal. It also may be related to financing. Some retailers prefer putting money into opening new stores and inventory, and don’t want to put capital into infrastructure. If that’s the case, cloud computing is a great option. Venture capital companies are a prime example.

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