Last time, we discussed how Retail was being affected by Cloud Computing. And while that industry is making tremendous progress, there are hurdles to Cloud Computing that exist for many other industries.
Despite being at the heart of Cloud’s value proposition, multi-tenancy is often the source of a lot of confusion. I have often heard questions like: “Will my data be intermingled with data from other entities?” or “Can I get my dedicated cloud instance with full physical separation?” A lot of the Cloud’s value comes from maximizing the sharing of computational resources. Creating these artificial walls around the data might seem like the right thing to do, but is likely to produce an underperforming solution. While there are legitimate reasons to go in this direction, you should choose a multi-tenant model that maximizes sharing of hardware and databases.
Resistance to Cloud comes in different forms. It is practically impossible to employ Cloud Computing’s sharing principles in situations where law explicitly forbids it, unless you are a part of an organization that has enough clout to influence legislation. Another form of resistance is based on company policies, which should not be as hard to overcome. Sometimes, Cloud resistance comes in the form of compromise, especially around the topic of multi-tenancy, described earlier.
Fighting this resistance is a strategy that will likely pay off, even if you only win some of the battles. If you are facing significant resistance to a Cloud based approach, you might want to try testing it with a smaller initiative before rolling out a riskier project. Keep in mind that some of the most conservative companies have their e-mail, HR and financial systems in the Cloud these days. It wasn’t easy, but they eventually got there. For instance, a Dell-sponsored survey of 200 IT professionals from companies having 1000+ employees revealed significant concerns in moving e-mail to the cloud. But at the same time, it showed that 46% of them used SaaS or cloud based e-mail in some form already.
Is Data Secure in the Cloud?
A significant portion of the confusion and misinformation around Cloud Computing is related to security. Intuition leads many to believe that data is safer within their four walls than with a Cloud provider, when in fact it may be the other way around.
Depending on the maturity of the provider, here are some arguments that favor the Cloud Computing approach over the in-premise enterprise alternative. Cloud-based, multi-tenant solutions tend to make more use of encryption while in-premise enterprise solutions tend to trust the perimeter. It becomes fairly easy to get access to data in an enterprise environment once you break the perimeter. The same is not true for a cloud provider.
•Cloud service providers have much more to lose than enterprises. Enterprises typically recover from breaches because they deliver value outside of the IT infrastructure domain. A security breach can destroy a provider’s business.
•Providers are also used to transparency and due diligence. These drive them to make their offerings more mature and secure. They are also more focused, which allows them to successfully implement new practices that enhance their security.
•If you wanted to protect a very unique and valuable asset, where would you keep it? In your house or in a lock box inside a bank? Even if someone broke into the bank’s security perimeter, they would still need to know which lock box contains the item, assuming they were targeting it specifically. Along the same lines, it is easier to locate the resources (think hard-drive) associated to a particular single-tenant enterprise application, than to find them in a Cloud provider that distributes the data across several computational resources.
Cloud Computing may be one of the most disruptive technologies to hit our Information Economy. It’s enabling new business models and destroying others at the same time.
The combination of misinformation and resistance might want to make you compromise on your Cloud Computing strategy or even postpone it, and that may be a very dangerous path. Taking calculated risks when it comes to Cloud might secure your future while providing your business with interesting growth opportunities. Partnering with Motorola Solutions in implementing an effective Cloud Strategy is a good way to manage those risks and more confidently make this fundamental transition.
Damian Starosielsky is Director of Enterprise Solution Development for Motorola Solutions
Read Part One of Damian’s Cloud series, “Retail in the Cloud."
Find out more about WLAN Cloud services from Motorola Solutions.
Traditionally operational efficiency or associate productivity is thought of as an approach to reduce operating costs of the retail store. By enabling better processes, tools and technology, the store is able to find cost savings through reduction in number of hours of labor needed to run the store. Reducing the amount of labor needed has a direct impact on the bottom line as a result these productivity gains are a way to increase profitability. While this goal has guided the retail industry through some significant and fundamental transformation over the past several decades, the amount of operational efficiency that can be achieved for the sake of reducing labor costs to increase profitability has reached a limit of diminishing returns. While further reduction in labor is often possible, the careful balance of having the “just enough” or “bare minimum” is no longer adequate as the sole factor of consideration. The changing landscape of the shopper expectations for the in-store experience and new types of competitive channels are forcing retailers to think about operation efficiency in a different way.
The key to this shift in thinking is the focus on the customer. Traditionally, customer experience, although not a primary focus for driving operational efficiency, was impacted by changes in efficiency gains. Occasionally, customer experience and operational efficiency went hand-in-hand. For example, during the addition of bar codes to products and scanners at the point of sale (PoS), this combination expedited check-out times, provided more accurate receipts, and revolutionized inventory management. It was a significant win for the retailer in terms of efficiencies as well as for the customer. In other cases, the correlation between improving labor efficiency leading to shopper benefit has been harder to quantify.
For example, consider the situation where retailers implemented self check-out or other self-service kiosk technologies. They effectively shifted the burden of the labor required to check out onto the consumer but was a successful strategy as consumers adopted it due to the benefit of shorter checkout lines.
Finally, in the worse case the customer is negatively and sometimes severely impacted by labor efficiencies. Sometimes stores have optimized staffing levels to the point where any gain in profitability was negated by reduced sales as a result of poor customer experience. Certainly, we have all had experiences where the lack of staff in the store contributed to a poor shopping experience. Standing in a long line, looking for an associate to help, empty shelves, or getting bad information on a product are just some of poor experiences we could run into as customers. – All as a result of staffing levels optimized to the point of directly and negatively impacting the shopper. A 2012 study by Loyalty360 confirms this is a significant challenge for many retailers today - 45% of the companies surveyed acknowledged that less than 10% of their employees are focused on customer retention. This negative impact to the shopper is the vital reason for the shift in thinking about operational efficiency and what to do with the gains.
Improving customers experience has risen to the top of mind for retail executives. It’s clear with the competitive pressures and amount of change facing the industry that establishing differentiators is as important as ever. Because the fundamentals of razor thin margins and goal to improve profitability haven’t changed cleaver innovative ways to improve the shopper’s experience must be found. One such idea to accomplish this is through the combination of technology, process, and agility of workforce to keep labor budget flat but repurpose some hours to customer facing initiatives. While this approach does not add costs it does enable the store to realize improved profitability over time by growing overall shopper TLV. Retail customers are demanding improved and more connected in store experiences. It’s clear we as an industry need to keep pressing the bounds of what is possible to deliver to retail shopper’s needs.
Nathan Rowe is Director Enterprise Solutions for Motorola Solutions
Watch how Motorola Solutions Elevates Today's Retail Environment: https://www.youtube.com/watch?v=khJ7aEJBQ6o
Learn more about Retail Staff Communications technology from Motorola Solutions: http://www.motorolasolutions.com/promo/retail/staff-communications.html
Read other blogs by Nathan here: http://communities.motorolasolutions.com/community/north_america/fresh_ideas_ent erprise/blog/authors/NRowe
By Damian Starosielsky
Demystifying the Cloud
Cloud Computing is one of the greatest technological advances of recent years. It allows a more dynamic allocation of computational resources, which means that you can easily expand or contract your computing needs and only pay for what you actually use. Some of the benefits include easier access to these resources and the ability to innovate and adapt to market needs more rapidly. Although many of these benefits are well understood at a high level, there are plenty of variants and enough vendor-specific technology attributes to make it difficult for businesses to decide on the right Cloud Computing strategy for them. The choice between a public cloud and a private cloud is not a trivial one, with community clouds emerging as the option between them. Also, it’s also not straightforward to choose between the different XaaS models (Infrastructure as a Service, Platform as a Service and Software as a Service). To make matters worse, poor portability across Cloud providers even within the same model make the vendor choice a very difficult one.
Understanding the impact of the Cloud
It’s hard to think of an industry that will not be affected by the Cloud. There are many examples of companies who are facing business challenges because they were at the wrong end of this highly disruptive technology. One example is Oracle, facing challenges in its traditional database and CRM businesses, partly due to emerging technologies that are better aligned with Cloud Computing. Making the right decisions when it comes to a Cloud Computing strategy might not only give you competitive advantages, it might also be the key to the survival of your business. Netflix, Akamai, Salesforce, Uber and Workday are a few examples of companies that can attribute a lot of their success to a well-executed Cloud strategy, displacing a variety of competitors along the way.
Amazon started offering Computing services as a way to monetize excess capacity that was not being utilized outside of peak shopping seasons. This monetization probably justified higher infrastructure investments to more optimally handle peak season, which contributed to its e-commerce business’ success and subsequent disruption of other retailers.
Lastly, the attention Cloud is receiving is increasing dramatically. According to a recent report by IHS Technology, enterprise spending in Cloud will reach $235B in 2017, approximately triple of what it was in 2011.
Cloud Adoption in Retail
Major retailers have started to adopt Cloud Computing with some caution. Business critical systems like Point of Sale have not moved to the Cloud, yet retailers seem fairly comfortable moving systems that control promotions and pricing.
Some of the resistance can be attributed due to the fact that Amazon, the inventor of Cloud Computing, is also seen as a main source of competition for most retailers. Other Cloud providers exist, but they capture significant amounts of metadata that could be used in ways that conflict with the retailer’s best interest. For example, simple traffic analysis of a retail system could help you approximate in-store traffic and even sales volume, all in real time!
Cloud Computing may be one of the most disruptive technologies these days. It’s enabling new business models and disrupting others. Its ramifications are not yet fully understood in all industries, but it is fairly obvious that several will be impacted. Cloud Computing is likely to be an enabler for retailers to increase operational efficiency, find new growth opportunities and create a true omnichannel shopping experience. There is complexity and nuance involved in implementing an effective Cloud Strategy in retail and Motorola Solutions has proven to be a trusted advisor helping its customers make this transition with confidence.
Damian Starosielsky is Director of Enterprise Solution Development, with over 15 years of experience leading innovative software development efforts.
See what Motorola Solutions is doing for Retail: http://www.motorolasolutions.com/US-EN/Business+Solutions/Industry+Solutions/Ret ail.
Find out more about WLAN Cloud services from Motorola Solutions: