Cloud has become increasingly vital to the success of e-commerce. The flexibility and agility that cloud’s virtualized nature brings to computing in general seems particularly suited to the e-commerce arena, where consumers now want to purchase goods and services at all times, no matter where they are, quickly, conveniently and securely.
What is driving uptake?
There is a complementary equation taking place which is helping push cloud to the fore in Asia Pacific; the increasing market demand for e-commerce is taking place alongside falling data storage and internet access costs. By 2014 the cost of global data storage was down to just US$0.02 per megabyte, while computing costs have fallen dramatically over the past decade – in 1990 it cost US$527 to process a million transactions, in 2012 that figure was down to just US$0.05.
E-tailers have come to realize that using cloud computing solutions can help them be more agile and flexible in general, which in turn means that they can respond more quickly to opportunities and customer interactions – all with lower costs and lower risk too.
Cloud is also helping Asia Pacific e-tailers enjoy the benefits of working with a specialist third-party provider. Utilizing cloud technology to outsource data center and application services means e-tailers get all business-critical information captured in a single online location within their cloud partner’s secure, multi-tenant data centers. This in turn means multiple benefits, including more advanced searching and filtering capabilities, unlimited data storage and retention, secure encryption, self-service access plus automatic upgrades, maintenance and customer support – all vital elements of the e-tail mix. We’ve already seen examples of companies launching cloud-based e-commerce platforms and experiencing double-digit sales growth within six months in Asia Pacific.
Asia Pacific – a match made in cloud heaven
Asia Pacific has at the same time emerged as the ideal place for the cloud/e-commerce relationship. It is the most mobile-centric region in the world, thanks to a combination of diverse geographical terrains, dispersed populations and a technology-hungry consumer base, and as such mobile has grown more rapidly in APAC than anywhere else.
The figures are compelling; Asia’s end-users have the highest propensity to use their mobile devices for accessing the internet - 37 per cent of Asian people use their mobiles as their primary internet-accessing device, compared to less than 20 percent in Europe and North America. The region represents a perfect storm of mobility, reliable, high-speed connectivity and mobile-first philosophy; the mass penetration of smartphones combined with the high propensity of Asians to use their mobiles for transactions is creating the world’s biggest e-commerce markets in Asia Pacific.
E-tailers able to reap sustainable benefits
Fundamentally, it’s about the agility and flexibility of cloud. Retailers, whether traditional or online, always experience spikes in demand for products and services, there are times of year when sales can literally leap up – think Christmas, summer holiday seasons or the modern phenomenon of ‘Black Friday’ and ‘Double 11’. Cloud computing solutions enable e-tailers to cope with these periods of heightened demand and activity easily, as they can scale up and scale down the resources required to serve customers as necessary. This is of course a major cost benefit too, since working with a cloud partner effectively means leasing cloud space when it’s needed – so for smaller organizations and e-tailers who need to maximize spend, this becomes a big benefit.
Security also plays its part, since e-tailers are dealing with financial transactions and potentially sensitive customer data. In the early days of cloud, security carried concerns because of its internet-based nature, but the advent of hybrid cloud has helped to allay those fears.
Cloud delivering the way forward
Cloud-based solutions are now helping e-commerce companies enjoy the agility needed to maintain competitive advantage in fast-growing and evolving markets in Asia Pacific.
Better risk management: Transition to the cloud helps in creating a new service ecosystem which integrates e-commerce resources, reduces complexity and shifts IT risk from the enterprise to the cloud computing provider. Integration of server, storage and network resources into one set of infrastructure further reduces incompatibilities and faults within the IT infrastructure, and the ability to search through unstructured data using intelligent analytics eases addressing of compliance and legal issues.
A lot of e-tailers are also struggling to execute their online-to-offline (O2O) strategies, a key part of which is how they can empower the digital needs of tenants in their outlet malls but reduce the outlet mall’s branch office CAPEX and OPEX costs - while still increasing operational efficiency and reducing risk. One of the leading adoption trends is to standardize via a cloud delivery of the branch infrastructure and IT for ease of management, reducing time to setup a new tenant/branch and improving branch office uptime and time to recover. Thereby improving employee productivity by providing higher-performing and responsive branch infrastructure.
The right cloud platform also means working with the right cloud partner of course. It is a question of trust but also of technical capabilities and solutions – the right cloud partner can for example help e-tailers take their operations to the next level with localized microdatacenters that offer even more control and agility, which could help a traditional retailer provide e-tailer experience, or help e-tailer setup brick-and-mortar shops.
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