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Can cloud computing help high street retailers keep pace in the digital age?

The retail sector has undergone a dramatic and all-encompassing transformation over the last decade. As the rise of the e-commerce giants has changed how, where and when we shop, traditional high street retailers have been forced to navigate a new technological landscape. For many, it’s a case of adapt or wither.

Today, around a quarter of sales of non-food items in the UK take place online. While some analysts believe warnings about the death of the high street have been overstated, every year people spend more of their money online, and those companies which fail to keep pace with consumer habits find it increasingly difficult to survive.

Consumers now expect to be able to make purchases on the go, from a range of devices and at any time of day. Retailers have responded to this cultural shift by spending hundreds of millions of pounds on new apps and websites, ensuring their online checkout experiences are as seamless as those offered in store.

But while they have invested heavily in their digital interfaces, many are still lagging behind their online rivals when it comes to back-end operations. Legacy IT infrastructures still dominate, preventing bricks-and-mortar retailers from operating as nimbly as their digitally-native competitors.

At the core of this issue is data storage. While “e-tailers” host most of their workloads in the cloud, many high street chains are still shackled to unwieldy and expensive on-premise data centres. With a huge number of legacy applications to maintain, retailers often find the process of migrating to the cloud costly and time-consuming.

So what can be done to take the pain out of the process? Earlier this month, NS Tech and Skytap – a cloud provider for modernising traditional applications – invited IT leaders from across the retail sector to a roundtable discussion focused on that particular question.  

In his opening remarks, Chris Griggs, Skytap’s VP for EMEA, said that “mobile and digital are driving the adoption to cloud. The challenge of course is what do you do with the back office, what do you do with the legacy estate, and how do you integrate that with the digital world you’re trying to drive out to your businesses?”

“Organisations have two choices with their legacy estate,” Griggs added. “It’s rewrite those applications or modernise those applications. What we’ve seen is a lot of organisations try to rewrite those applications but of course we know that’s a long journey. It would take a long time and a huge amount of money. Our proposition is about helping you to retain some of that investment and take those applications, move them to the cloud and use what the cloud offers to modernise them.”

One of Skytap’s biggest clients – a global retailer – is currently trying to build its online offering and modernise its supply chains. “It’s a mammoth piece of work,” said Griggs. “It involves technology that is 10 to 20 years’ old, including Oracle RAC, IBM WebSphere and IBM AIX.” Rather than forcing the brand to rewrite each application, Skytap is helping it to repackage them in the cloud.

For many businesses, the promise of cost-savings is the key motivator for a cloud migration programme, but Griggs said the biggest benefits are less obvious. “The global retailer moved to cloud not because it was going to be cheaper but because it was going to accelerate the revenue that they were getting by being online,” he revealed.

Some attendees admitted they had suffered so-called “bill shock” after first moving operations to the cloud. But Scott Dainty, regional sales manager at Skytap, said there are steps organisations can take to reduce the risk of overspending. “By controlling usage of this cloud resource based on quotas and limits, we can ensure that people can’t use more than they’re entitled to use,” he said.

However, there was consensus among attendees that cloud computing offers benefits beyond simply saving money. “People think of cloud as just another data centre,” said an IT manager at a high street retailer. “They think: ‘I have an on-premise data centre and I’m going to move it to the cloud.’ But it’s so much more. It’s essentially a shopping centre where you’ve got all the shops you need. If you want to buy anything, you can go to Google Cloud, Microsoft or Amazon.”

Another attendee, who is also working at a high street chain, agreed and added that being a “cloud-first” organisation requires a culture change. “It’s not just about getting people on the cloud; it’s about making people aware of the benefits. You move to the cloud because you can innovate. You move because you’ve got all of those hundreds of security people at Amazon and Google and elsewhere working to keep the data safe.”

Moving legacy applications into the cloud enables organisations to be more flexible. “Process modernisation,” said Dainty, “is about introducing agile approaches to traditional applications so that you can improve the software development lifecycle.” One of the attendees – an IT manager at a FTSE 100 company – added that while agile development is “not necessarily better”, it is “more flexible and responsive to the business”.

All businesses “have some applications which are going to be very challenging to move to the cloud,” she added. “But we all have metrics to cloudify as much as we can, so having somewhere to put legacy applications is very useful.”

Despite talking up the benefits of cloud computing, some attendees expressed concern about the security implications of migrating sensitive data and applications. It is critical, according to Griggs, that companies take a proactive approach to security. “The projects we see fail are the ones where security is brought into the conversation far too late,” he said. “You’ve just got to work with the application owners and the business owners and the security team from the start.”

Concluding the debate, the chair stated that “we are all chasing the consumer now”. “Businesses are fighting very hard at their front-end to keep up with those consumers, but the back-end is where the problem is,” she said. “They need to get that back-end as fast and flexible as the front-end. Skytap can help you modernise your applications, so that you can keep pace with the consumer.”