Forecast: Cloudy

September 18, 2014  by in Business Strategy, Industry   

You’ve probably been hearing for several years about this thing called “the cloud.” The term gets tossed around a lot, but a lot of folks don’t really know what it means in the context of store technology and operating systems.

Basically, the cloud is a network of servers accessed via the Internet that can provide the same sort of operating functions that are housed in the physical servers running in any business.

Here’s an example from digital innovation news source Mashable.

If you take a picture on your smartphone, that picture resides in that physical device. If you upload it to Instagram, it’s going onto the cloud, where you can access it at any time, anywhere from your laptop, tablet or phone. If you delete the photo from your phone’s internal memory, it still exists on a server located elsewhere—along with information from thousands, even millions of other users.

Some service providers are moving entire operations to the cloud. Take Adobe, which has transitioned its creative services to the cloud. You can’t buy the software for yourself any more, but pay a subscription fee to use “Adobe Creative Cloud” online. Home Furnishings Business recently moved its editorial production to this service.

IMPLICATIONS FOR FURNITURE STORES

Retail automation vendor STORIS has offered its operating system on the cloud for 10 years, said Don Surdoval, president and CEO. He believes the cloud is a big part of furniture retailing's future. Already, at least 125 of STORIS' retail customers have migrated to the cloud, representing north of 1,500 users.

"We feel that, for the bulk of the industry, it's more cost-effective for us to provide the infrastructure" for running the software, he said.

The cloud even is attracting the attention of some of STORIS' largest furniture retailing clients, companies that have the volume and complexity to run their own servers.

"Even the top 100 (retailers) are talking about using it now," Surdoval said.

The best thing about the cloud is that you can access it from anywhere, any time, said Myriad Software Principal Carolyn Crowley. Myriad made its store operations software available on the cloud in 2008.

“For a furniture retailer who doesn’t want to be heavily involved in information technology, it’s perfect,” she said. “You don’t have to worry about an infrastructure.”

The cloud is gaining momentum at Myriad. In 2012, a lot of its larger clients began to move that way.

“Close to 25 percent of our clients are on the cloud,” Crowley said. “In the last couple of years, the majority of new systems we’ve sold have been cloud-based. “We go either way—server or the cloud.”

Profitsystems developed Retailvantage on the Cloud, the cloud application of its point-of-sale and inventory management system, seven years ago, said Guadalupe Pagalday, product marketing manager at the company’s Denver, Colo.-based parent company Highjump Software. Clients began signing on soon after.

"Serving their customers and growing their business: That should be the focus of retailers," Pagalday said. "Profitsystems developed RETAILvantage on the Cloud to allow home furnishings retailers to focus on what they do best and solve two significant obstacles retailers face when adopting a retail management system: limitations of cash and technical expertise."

 

WHY THEY SHIFTED Crowley said maintenance issues and expense have pushed more of Myriads retail customers
“cloudward.”

“They had an ‘event’—a server crash or hardware program and they didn’t have a back up,” she noted. “What made it an easy sell with single stores, was the ‘I don’t want to buy another server and worry about maintenance and upgrades.’

“For us, if our client is growing the business and add more memory and additional users, it’s very easy to add new user licenses, and you don’t have to pay labor for installation.”

She added that it’s not just the hardware that a retailer purchases if they want their own in-house server.

“It’s the labor—if there are problems, you pay to fix them,” Crowley said. “The contractor must maintain it. You have to add this to the cost.”

Does your system need an upgrade? That’s a lot easier on the cloud. Cloud providers often offer selections that are upgradeable in the future.

The cloud solution has proven to be stable and reliable, with an up time of 99.9 percent, state-of-the-art anti-virus and firewall protection

"Our retail cloud solution eliminates the burden of maintaining a computer network,” Pagalday said. “There is no file server to purchase, no backup hardware to worry about, and no expensive outside technical help needed."

 

CHALLENGES Crowley said the biggest block for retailers considering the cloud is that they’re nervous not having their data housed in their store or warehouse.

It’s an issue of security, and hackers have shown plenty of skill when it comes to infiltrating the Internet.

“Any cloud provider is very on top of security,” Crowley said. “That’s improved a lot over the past 10 years.”

In late 2008, a coalition of industry practitioners, corporations, associations and other key stakeholders formed the Cloud Security Alliance. The association’s mission is to promote the use of best practices for providing security assurance within cloud computing, and to provide education on its uses to help secure all other forms of computing.

The organization’s Web site (CloudSecurityAlliance.org) contains a wealth of information on security issues related to cloud computing, and the establishment of standards to help ensure the protection of data and services on the cloud.

The cloud is a strong bet for a number of large, everyday-name technology companies like Microsoft, Apple, Google and Yahoo.

“The Cloud is here to stay, and the Cloud is where business operations have moved or will move,” Crowley said.

For those with security concerns about cloud security, network administration specialists monitor and maintain the cloud network.

Other benefits include remote access that allows retailers to connect to their business from anywhere in the world via the Internet; rapid deployment and scalability.

"Managing the business from the cloud allows retailers to be nimble and react quickly to changing needs,” she said. “During short term events like annual holiday sales where traffic patterns increase and additional sales help is required, it is a straightforward and simple process to simply 'turn on' additional user applications and have them available only for the duration of the event."

The only potential disadvantage to the cloud Highjump sees are local Internet-service interruptions, but there's a fairly easy fix for that. Most companies would opt for cable Internet access for more reliable service with less downtown than satellite, DSL or other broadband options.

Cloud computing is gaining popularity as businesses face the prospect of replacing aging servers and networks, which can be costly and time consuming, Pagalday noted.

"Making the move to the cloud is attractive for three primary reasons: cost savings, flexibility, and security," she said. "We have seen our clients increase efficiencies, improve cash flow, and be able to meet business demands more quickly by moving their computing system to the Cloud."