This is a three-part blog series. This part covers why retailers and commerce brands embrace the cloud, the reality of cloud hosting providers, and why merchants need to stay vigilant with cloud services.
Our CEO Sonal Puri joined Doug Hollinger, President and Chief Content Officer at Concierge Commerce, for the Cuppa Commerce podcast, where he interviews industry insiders and experts that are influencing the way we sell online. The Cuppa Commerce podcast discusses where digital commerce is headed – and how digital and e-commerce professionals can maximize return on their investments.
Below are some of the most interesting excerpts from Sonal and Doug’s conversation.
Why retailers and commerce brands embrace the cloud
Doug: I’d like to step back a little bit and talk about how we got to today and the current cloud environment, and this “turning everything into services” and commoditization. So why do you think retailers and commerce brands specifically embrace this kind of environment, the software as-a-Service, cloud computing, and cloud-host applications? And do you think there’s any reason for them to not embrace that or are there reasons they should continue to self-host?
Sonal: If you look at all of the utility models around you, I mean, is there at any point, a scientific model or a math model that says keep doing it yourself, do the heavy lifting? Because the cost of having the skills to deliver some of this work just for one unit is so much more than it’s ever been, then why not leverage the combined force of, call it a village, to get you to where you need to be. There’s no reason for us to say we are only e-commerce focused or we’re only digital commerce focused, because as you know in my background and the background of the entire executive team at Webscale, we can provide these services to pretty much any company that is transacting on the Internet.
But e-commerce has some very addressable challenges. One, they don’t know their growth in the next year. Two, they don’t know whether an influencer or an event is going to drive 2X or 10X of traffic. It’s very difficult to plan. Three, there’s revenue passing through their site. So obviously the bad guys are sniffing around trying to get to them and to find a way to hurt their brand by taking their credit cards or worse. So they’re a massive target and they have very little visibility into the consumer mindset.
The consumer mindset is changing on a daily basis with regards to how they consume products. So given all these challenges, why not be in a place where you can move on a dime, and you can respond in real time to any needs that the market throws at you. That’s the beauty of leveraging Infrastructure as-a-Service or leveraging on-demand services, as it’s there when you need it, and you’re not paying for it when you don’t.
Doug: Yeah, exactly. It’s so much faster and cheaper, right, to leverage these things. And in many ways, it mirrors software itself, how leveraging these kind of platforms, and networks, and systems and solutions opens the playing field to a lot of people to get into the game, right, get into the commerce game getting into certain market spaces when they couldn’t before, because the cost to just get up and running are cheaper.
Sonal: I couldn’t have said that better myself, Doug. I think the bottom line is – imagine an online retailer that has 100,000 visitors and is maybe doing a million dollars in revenue a year. Imagine them having access to the same kind of technology that Amazon and Walmart have because we’re now able to bring them the same technology stack.
We have customers that may do 10 to 20 million visitors a month and we have customers that do 100,000 visitors a month, and they use the exact same technology stack. They may have access to premium services and so on that they ask for, but they have access to the best. So to your point, exactly right, it levels the playing field, and anyone now competes with an Amazon.
The reality of cloud hosting providers
Doug: Yeah, so cloud has been this sort of buzzword for a while, and it promises a lot of advantages for businesses, including that scalability we talked about, both up and down. If you have a lot of changes in your traffic, or like you mentioned, maybe you have a big boost of visitors, it promises lower costs over time, ease of maintenance. You talked about you could, sort of, set something up quickly, but to what extent do you think those promises are actually being met by the reality of the cloud hosting providers out in the market today? And if promises are not being met or people are being surprised by costs, for example, where do things go wrong?
Sonal: Well, that is a very interesting part of the problem that you are outlining. So there’s a couple of things. One is actually getting onto these cloud hosting platforms. We find our customer base will either trust experts like us to take them there, to take them to a cloud hosting platform. And that experience for a majority of our customers can be anywhere from a couple of weeks to run and complete the migration with pretty much no downtime or very limited downtime in the middle of the night when there are no sessions or traffic. So you get that kind of an experience on the cloud migration piece.
If you compare that to traditional hosting migration, that was a process that took six months to a year to a point where people who tend to migrate from one standard hosting or traditional hosting provider to another, swear they’re never going to do it again. Literally, that was the world that we lived in. So that’s one part of it.
Then, the second part of it is people who decide to do it themselves. And we tend to get a lot of relationships introduced to us from people who went to the cloud themselves. It meets the promise of having this easy-to-use infrastructure, and you’re not racking and stacking servers and dealing with them. But then, to your point, the cost starts to add up if you don’t manage your infrastructure correctly. And then, we would get customers or prospects that we talked to, that say, “I started off spending a couple of thousand bucks, and very quickly, my cloud bills just skyrocketed.”
So cloud bills that are uncontrolled or unmanaged tend to go out of control, and if it’s not somebody’s core expertise, they’re not going to know what to look for. They’re not going to realize, and then they get a bill after the fact. It’s like if you have a leak in your house, you’re going to realize at the end of the month when your water bill comes like, “Oh my God, I spent extra money on water, and I didn’t even know I had this problem.”
And then it’s like, “Okay, now I need to put in the amount of time to go back in and clean up. And what am I cleaning up? I don’t even know what utilization is.” So now you’re learning how to manage cloud costs, which was not your core expertise in the first place.
Staying on top of the cloud
Doug: I think part of this may be that people confuse cloud with SaaS, you know what I mean? In some ways, they think that the cloud automatically comes with some services or automation that it doesn’t necessarily come with.
Sonal: It doesn’t.
Doug: To use your analogy, it’s almost like you went and turned the water sprinkler on and then expected it to shut itself off or adjust itself when it rains. It just doesn’t do that so is that what people need to understand is maybe there’s less automation or less obvious things, and it requires just constantly staying on top of it?
Sonal: You can bring up instances and run a site, but then, to make that site secure, you need to bring up security services that are from the cloud. And then, to provide that 24/7 support, you need to have somebody who’s either willing to stay up all night and answer your phone calls in the old world of getting the pager buzzing. And that’s one set of problems that you start to face.
And then, you’re dependent on that handful of people that are running your site for you that may or may not go on vacation or actually have a life, God forbid, when you’re trying to do Black Friday or Thanksgiving or Christmas, right? It collides with everything that you know about running a business.
So exactly to your point, there’s additional services. Then, there’s the ease of bringing up additional infrastructure, but then forgetting that it’s a utility and you’re paying for it like a utility. Cloud cost management is a massive market where companies are getting funded millions of dollars to manage people’s cloud costs. So it’s a problem, that’s why they are funding in this space. That’s one of those things that we realize very early that customers tend to deal with, and our contribution to it is, “Hey, we’ll make it our problem, and you’ll get a fixed bill every month based on what we think your traffic is going to be. And there’s no surprises, so work with us and allow us to make this experience surprise-free.” And we have the 24/7 global support and the white glove experience that comes with it.
Access the full podcast at this link.