Retailers Preparing for Cloudy Skies Ahead via Cloud Computing
By Carl Meadows, [email protected]
Retailers always prefer clear skies. But from an operational standpoint, more and more are preparing for cloudy days ahead – via cloud computing.
If a retailer is considering the use of a network of remote servers hosted on the Internet for its data rather than using its own physical servers, just how cloud-ready is it?
Retailers should evaluate several elements before making that move. So far, though, most retailers aren’t superhot to employ cloud-based applications. To be sure, retailers often are late adopters of new technology. They operate on such tight profit margins that, generally, any new IT expense gets close scrutiny.
Unless a Walmart or Amazon in size, retailers haven’t considered IT to be a major differentiator for the most part. A Forrester Consulting survey released in November found that while 156 leading U.S. and European retailers surveyed increasingly are mulling a cloud-based e-commerce site, 81% still use a homegrown e-commerce platform or a licensed on-premise system from a software vendor.
Many retailers worry about cloud security, which, while understandable, actually should be of less concern than if operating their own data center. It’s true that the retail industry now stands atop cybercriminals’ list of targets. By one account, retailers comprised 45% of one data-breach investigator’s work in 2012, up 15% from 20111. Much of the rise reflects growth in e-commerce, which is triggering assaults that now surpass point-of-sales attacks.
Still, the physical and infrastructure security of cloud providers generally far exceeds that of most retailers. That’s because cloud providers typically use highly secured facilities with stringent access-control procedures. The security of the application, however, is still largely the responsibility of the retailer and its developers as the Cloud is acting as a hosting platform (except for Software-as-a-Service solutions where application security is the responsibility of the app vendor).
Back to gauging a retailer’s cloud-readiness, here are several questions to ask:
1. What do you want to achieve with the cloud? This is essential simply for the exercise of determining what cloud computing can and can’t help you do. It’s also advantageous to gauge how much it will cost to handle a project in the cloud; usually it will be less expensive because in the cloud, you just pay for the infrastructure you use. Still, look into the probable costs of some projects you want to initiate, especially if it involves dissecting Big Data.
2. What applications are ready – and what aren’t – to move to the cloud? Some applications can’t move because they’re backed by legacy systems. Some servers have performance needs that make them poor candidates for the cloud without redesigning the application, such as those with scale-up vs. scale-out systems. However, some IT investments are due for a hardware refresh, which offers a good inflection point to look at the Cloud.
3. How will the cloud impact your web presence? Generally, maintaining such a presence is one of the easiest things to do in the cloud.
4. Can the cloud satisfy your specific regulatory compliance demands? Payment card industry security compliance, for instance has been a hot button. But guidelines issued in February by the PCI Security Standards Council provide a roadmap that defines security responsibilities for cloud providers and customers.
5. What is the cloud’s scalability? Initially, that was judged a big benefit of the cloud, especially since most retailers possess a very seasonal business and the cloud can help scale up or down fairly easily – closely aligning costs with revenue. However, many retailers don’t think the scalability issue is much of an issue anymore.
6. What is the cloud’s security strength? Again, cloud managers are savvy about security. Still you need to understand what is protected and how the security system works to ensure you comply with all applicable regulations. Some auditors require that they have access to the datacenter to prove everything’s just fine, but not all cloud vendors provide that access.
7. Do I know the cloud vendor’s fee schedule and service-level agreement? It’s important to know what they cover and don’t. Be sure to understand vendors’ definitions of downtime in determining their SLA obligations. Putting something in the Cloud does not inherently make it highly available, but highly available applications can run in the Cloud. They just have to be properly architected and designed to ensure localized service disruptions do not disrupt the applications availability.
8. Does the cloud provider retain consultants who can help with the migration to the cloud? Depending on the amount of data and systems, it can prove overwhelming.
Undoubtedly, it’s just a matter of time before the vast majority of retailers settle in the clouds. Still, make sure you assess how you want to migrate there and what the warning signs are.
And remember this truism: Technologists tend to overstate the impact of new technology in the first couple of years – then understate it the rest of the decade.
Carl Meadows is senior director, managed services product management at SunGard Availability Services, a leading provider of information availability and disaster recovery services. He can be reached at [email protected].
1. 2013 Trustwave Global Security Report, issued Feb.13, 2013.
J.C. Penney in mobile initiative to drive sales
Shoppers at J.C. Penney stores this holiday season will discover a more rewarding experience following the retailer’s decision to team up with leading retail app Shopkick.
J.C. Penney shoppers will be able to Shopkick’s currency known as "kicks” along with special offers from the retailer when visiting any of its nearly 1,100 stores
"As more and more people adopt smartphones, mobile devices are quickly becoming a key shopping tool and the integration of mobile Internet has become key to delivering a modern, in-store shopping experience," said Debra Berman, J.C. Penney’s SVP of marketing. "Through our partnership with Shopkick, we are able to cater to today’s mobile savvy consumer and take our in-store shopping experience to the next level by rewarding and engaging customers who are already shopping inside a J.C. Penney store."
When a shopkick user walks into a participating store, the app detects the shopkick signal emitted from a patent-pending device, which is picked up by the shopper’s smartphone. The app then deposits kicks, which can be collected and redeemed for gift cards, song downloads, movie tickets, Facebook credits, donations to charities and more.
"JCPenney’s nationwide rollout of Shopkick makes shopping more inspiring and rewarding," said Cyriac Roeding, CEO and co-founder of Shopkick. "For shoppers, we delight them by rewarding them for behaviors they are already doing while shopping. For retailers, like J.C. Penney, we are driving incremental traffic and sales and ensuring that marketing dollars are invested in driving actual foot traffic. It’s a win, win."
Shoppers can also collect additional kicks by logging into the app daily, viewing look books, inviting friends to join and by linking their Visa or MasterCard to Shopkick’s "Buy and Collect" program.
Other retailer’s who work with Shopkick include American Eagle Outfitters, Best Buy, Crate and Barrel, Macy’s, Old Navy, Simon Property Group, The Sports Authority and Target.
Former Kohl’s exec joins board of ATM owner
Julie Gardner, former chief marketing officer at Kohl’s, is the newest board of Cardtronics, the world’s largest retail ATM owner.
Cardtronics operates a vast network of more than 80,000 ATMs at locations throughout the United States and internationally.
Gardner spent 14 years at Kohl’s and most recently served as EVP and chief marketing officer. Prior to Kohl’s, Gardner was with the Eckerd Corp., a regional drug store chain that was eventually acquired by CVS.
"Julie will be a valuable asset on Cardtronics’ board, given her marketing expertise in the retail industry and background with rapid business expansion, as well as her insights with drugstore chains, a key retailer constituent of Cardtronics,” said board chairman Dennis Lynch. “As our company looks to deepen its client and consumer relationships, Julie’s first-hand experience in nationwide brand building will be a catalyst for Cardtronics.”
Gardner said the prospect of joining the Cardtronic’s board was attractive given her background in marketing and retail and the fact that the company’s ATM network touches more than a million customers daily.
“I look forward to helping Cardtronics produce results with its traffic-driving initiatives, forging deeper client and consumer relationships, and of course, growing its share of ATM transactions,” Gardner said.