Choosing cloud over in-house – how retailers make the choice

Since the mid-nineties what we now know as ‘cloud’ technology has been talked about in various different terms –as hosted software, Software as a Service (SaaS) and even as managed services. Now the term ‘cloud’ is commonplace.

[easy-tweet tweet=”For retail organisations considering #cloud systems, the main benefit is not needing to rely on fixed #servers”]

The NIST (National Institute of Standards and Technology) definition of Cloud Computing describes it as “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

Compelling reasons for the cloud

For retail organisations considering cloud systems, the main benefits are that they don’t need to rely on fixed servers, they get real time access to data, scalability and simple software upgrades. All compelling reasons for choosing this option, since most retailers wish to focus on their core business and don’t want the hassle of worrying about IT systems.

Many software houses have developed purely cloud based solutions which offer all of the benefits outlined above to retailers and also are fail safe, having implemented back- up service for the rare time that there is a failure.

Keeping it local

Although these benefits are widely acknowledged within the IT industry, for retailers it is important to consider that cloud solutions are a continual commitment, rather than a one-off IT investment. With cloud there are monthly charges whether for the application, the data or both. Implementing a local server, however, means an initial upfront cost, which, depending on the size of the business, often sees a payback within 18 months.

for retailers it is important to consider that cloud solutions are a continual commitment

Access to data is a key point to consider when deciding whether to go in-house or cloud. Although we now have the benefit of faster internet connection with leased lines, there will always be a restriction to the speed of the connection, whereas with local servers, speed is not an issue.

For many retailers, a local server based infrastructure is still the best option. This may be due to unreliable ‘internet’ connectivity, security issues, questions over control of the data, or that it is easier to utilise integration tools when all software is stored locally.

Remaining flexible for business

As a well-established supplier to the retail sector for over 25 years, at Eurostop we are fully aware of the various requirements of our customers, which is why we recommend keeping options open. What is important is that a retailer is able to choose either of these methods and to adjust as the business requirements change.

[easy-tweet tweet=”A retailer might start with a #hosted or #cloud platform as they may have limited technical skills says @eurostop”]

For one store or many – start with what works best

As a single store retailer a retailer might start with a hosted or cloud platform as they may have limited technical skills or resource to manage a server, backups and upgrades.

As the business grows to include a number of outlets at different locations, they may want to start integrating other specific packages and therefore want to take the management of their retail systems and data in house.

At the other end of the scale a large retailer with multiple outlets and a warehouse operation that already has a server array in the business may wish to have their retail management solutions as a fully integrated element of their IT infrastructure.

75% of Eurostop’s new customers are now choosing a cloud solution, and while smaller retailers favour cloud for all the obvious benefits, the general trend is upwards, even amongst larger retailers.

smaller retailers favour cloud for all the obvious benefits

The key point to remember is that having the freedom to focus on the functionality should be the most important thing to an organisation. How well the retail system supports the operations – whether fulfilling orders, tracking sales and managing stock should be the main concern. Requirements may change over time, so we recommend choosing a supplier that can provide a range of options to support the business.

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