Achieving True Cloud Differentiation: Why Being "On the Cloud" is Not Enough

Many retailers have already migrated critical business operations to the cloud. Incorporating cloud technology as a core business differentiator is top of mind; a recent IDC research study predicted the overall cloud market would grow from $118 billion in 2015 to over $200 billion by 2018.

There are several obvious reasons why cloud technology is increasingly the go-to delivery platform for retailers. These include cost savings, convenience, and agility.  While these are all valid, though, they barely scratch the surface in terms of the value cloud technology can deliver. Most companies today view the cloud much the same way they looked at the Internet in the 1990s – as a different way to deliver the same old content, as opposed to a transformational technology.

 Looking to the cloud’s capabilities beyond a delivery platform, it yields advanced benefits that can transform a retailer’s business. The cloud allows retailers to break out of the boundaries of traditional solutions by accessing data that exists outside retailers’ walls, unlocking the power of advanced prescriptive and predictive analytics and driving far more accurate insights. Additionally, the cloud enables collaboration by opening up communication and sharing insights that deliver value throughout a retailer’s value chain.

 All cloud models are not equal

However, these transformational benefits can only be fully realized if the applications running on the cloud are natively designed for the cloud. If you take an existing solution – one that was designed to run on-premise with specific hardware  – and simply host it on the cloud, that application cannot leverage the unique and advanced attributes of cloud computing or the rich data available. Cloud-hosted traditional applications cannot scale up and down and are not natively designed to handle advanced analytics, preventing retailers from unlocking the rich potential of the cloud.

 Today, it’s no longer enough to be cloud-enabled. You must be cloud-native, “of the cloud,” designed expressly for the cloud. What does this entail?

 Greater scalability – ability to consider ALL the data

Data analytics can be much more sophisticated, pervasive and accurate in a cloud-native environment. For example, predictive and prescriptive analytics are far richer if you mine vast quantities of data and perform sophisticated analyses, including leveraging the most advanced machine learning techniques. This is only accomplished through a prescriptive recommendation solution that gives merchants insights into the hidden gems within consumer behaviors captured in countless transactions, additional interactions and data points – and this can only be accomplished with cloud solutions that were designed for scale and advanced  analytics.

 Without cloud-native technology, these new levels of insight are simply not possible.

 Non-traditional data tends to be massive and unstructured – incorporating attributes and insights that retailers need, but that are usually housed outside an organization because of the size and quantity. A well-built cloud solution must be elastic and allow users to scale their resources up and down to take advantage of ALL the relevant data, wherever it resides.

 Being of the cloud

Retailers are challenged by consumers to offer responsive and seamless omnichannel experiences. This requires retailers and vendors to respond in real-time to their clients’ demands, consequently leading retailers to recognize the need to collaborate with their vendor partners across the value chain.

 As retailers define their overall cloud strategy, it may initially seem that being on the cloud is all they need – for example, hosting certain applications to reduce overall costs and make access more widespread. However, to truly realize the full potential of the cloud, retailers must rethink their information and application DNA. Retailers can’t reap all the benefits of the cloud unless the applications they use are “of the cloud”—architected from the onset to take advantage of unlimited scalability, elasticity, and the ability to perform advanced analytics. Anything less is like using the Internet to post content online – a start, but far from fulfilling its promise.