Off the Shelf: The Retail & CPG Blog

Nothing in the computing world can compete with cloud computing for the sheer volume of hype.  This is because the cloud could be the solution to many problems that annoy eCommerce vendors such as capital expenditures, hardware upgrades, Service Level Agreements, etc.  The promise of plug and play eCommerce is immense.

It is a beautiful picture:

·         A company contracts with a cloud company for computing resources

·         They hire either the cloud company's professional services or an SI like Infosys to do the customization and integration work

·         They bring up the site in the cloud's sandbox and test it.

·         They launch it and start making money

·         They pay the cloud company out of the revenue that they bring in.

·         As the site grows in popularity, they increase the resources by paying more to the cloud company.

It is kind of like electrical power.  Most of us have no deep understanding of electrical power generation and transmission; we just plug into it and use it.

Before the beautiful picture can become reality, however,  we have to solve several potential problems:

·         Security - Both financial and personal information must be safeguarded under the laws of most countries.  Most companies are very conservative in this area and they would require huge reassurances before letting this information come into or out of their firewall.  Perhaps a PayPal-style solution could provide this assurance.  The cloud would never actually see any credit card info or personally sensitive data.  Your site would send a request for payment to the third-party payment site.  The user would trigger the payment back to your site via that third party, either automatically, or manually, as they prefer.

·         Level of Service - Clouds are not magic-they are composed of computer and the humans who tend to them.  There is a finite computing and human capacity at any moment in time which cannot be exceeded.  Suppose demand for everyone's site began to rise in a surprising fashion as often happens at the end of a recession.  The cloud company would have to scramble to meet the demand by installing new hardware and hiring new people.  One solution might be an alliance between the hardware vendors and the cloud owners.  If the hardware vendors were willing to stage, or even pre-install  their inventory in the cloud's computer centers, the capacity could be increased by agreeing to pay for the additional computing power. 

·         Outages - most eCommerce sites tolerate a small amount of downtime because the cost of achieving 100% uptime is so high.  When the site goes down, everyone hates it, but they understand the tradeoff.  Tradeoffs, however,  are not  easily tolerated between a customer and a vendor.  If a cloud company experienced a protracted downtime, who would be liable for the lost revenue?

·         Customization - Ideally, every customization available on a self-hosted platform would be available in the cloud.  In reality, limitations are there, and they are likely to persist for some time.  A cloud is normally built on a software suite that consists of a set of services that you can call.  If you have a great idea for a new service, the cloud vendor may not choose to implement it.  If you create it in a custom fashion, it may not perform well enough for the cloud company's taste.  Additionally, you may find that the tool provided by the cloud company is not powerful enough to implement all of your ideas.

Where there's a will, there is a way.  All of the drawbacks are essentially engineering problems while all of the advantages are business advantages.  Where real advantages slam up against engineering limitations, clever people find ways to solve them.