Oliver Moazzezi, technical architect at cloud service provider, Cobweb Solutions, and a Microsoft MVP (Microsoft Exchange Most Valuable Professional), explores the retailer benefit for cloud computing. Cobweb also reveals how it has helped smoothies brand, Innocent Drinks, develop an outsourced IT solution for its communication needs
The BDO Retail Forecast for 2012* makes grim reading. The report points out “a number of retailers with cash flow problems…are likely to dip into administration.” With market conditions characterised by economic uncertainty and a drop in overall consumer confidence, retailers are striving to increase competitiveness and preserve cash resources by decreasing and delaying Capital Expenditure (CAPEX).
At the same time they are searching for methods to increase IT agility to help minimise time to market for profitable new retail lines. They also want to mine retail data to minimise stock on hand while avoiding stock-out scenarios and identify profitable lines to maximise profitability per square foot of retail space.
In a recent survey** of IT retail decision makers, 57% of respondents said they were thinking of moving to software services via cloud computing in the next two to three years. This isn’t surprising considering hosted cloud computing, including Software as a Service (SaaS) and Infrastructure as a Service (IaaS), allows retailers to deploy the latest technologies and applications, while minimising costs.
Hosted cloud computing also provides retailers with the agility they need to manage data centrally, rapidly deploy new capabilities and avoid relying on older, often unsupported software or infrastructure.
Agility enables retailers to realise competitive advantage, while also allowing them to ‘throttle up’ critical applications to align with seasonal needs. The benefits derived from the adoption of hosted cloud services are therefore a compelling proposition for these fast-paced markets.
Centralised hosted IT infrastructure and services also provide retailers with high levels of flexibility. For instance in-store EPoS tills located in a wide range of store locations can be polled by SaaS solutions located in hosted service provider data centres. Critical business information (store sales by product line, stock order information etc) can be made available to store managers or head office personnel for a wide range of uses. This includes order processing and fulfilment, store-specific sales/P&L analysis and product line sales analyses.
The benefits of hosted cloud services
By using hosted cloud services, retailers avoid IT-related CAPEX. At the same time, the flexibility of these services enables users to pay only for what they use, whilst scaling up and down to meet seasonable demands. Simultaneously, retailers enjoy high levels of support and guaranteed service level agreements when using hosted cloud services. Most cloud service providers will provide all customers with contractual service levels that must be maintained. Centralised support by cloud service providers allows retailers to focus on their retail business and market opportunities, rather than on underlying IT infrastructure and applications.
Other benefits of hosted cloud solutions include enhanced business continuity and compliance.
Leading cloud service providers utilise a wide range of next generation backup and disaster recovery solutions. This ensures that all customer-specific data is retained to help meet compliance, governance, and operating requirements.
Many cloud service providers also use next-generation security solutions and advanced encryption techniques. They also expedite patches and new security solutions to maximise data security. Cloud providers should be aware of constant changes in best practice security processes and update their systems to reflect this.
Finally, retailers using hosted cloud services can quickly access the very latest software applications, increase the number of users, create new virtual machines and increase data storage capabilities all on a 24/7, internet-accessible basis.
The inherent flexibility and agility of hosted cloud services allow retailers to exploit opportunities quickly, while helping to minimise capital expenditure and operating costs.
PCI and cloud computing – hosted service providers must be PCI compliant
The PCI DSS (Payment Card Industry Data Security Standard) is a multifaceted security standard that includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures. This standard is intended to help organisations proactively protect customer account data.
PCI DSS requires organisations to protect cardholder account information throughout the transaction lifecycle. Cloud computing providers must provide PCI compliant solutions to avoid the threat of incurring heavy fines. Providers must have the ability to find patterns of text in an email to protect messages that have payment details. Leading cloud providers use next generation technologies to ensure secure encryption, archiving and compliance. To meet legal and forensic compliance requirements, they should guarantee that a business’ email archive is secure and tamperproof and that nothing can be deleted or altered.
Search carefully when considering hosted cloud services
While cloud computing, Software-as-a-Service and Infrastructure-as-a-Service are compelling options for retailers, they need to address the benefits and risks when considering a hosted cloud service provider. A cloud services provider differs from traditional outsourcers and hosting providers through the transparency and flexibility they bring in per unit billing, self-provisioning and service reporting. The process of moving to a cloud provider must offer co-existence and roll back to enable a seamless migration. As retailers look to IT to drive their businesses forward, the adoption of cloud computing represents one of the few strategic initiatives that can demonstrate lower predictable costs, alignment to business and seasonal cycles and a foundation for business growth. It’s no wonder cloud adoption in the retail sector is mounting.
Four key points to consider when choosing a cloud service provider
- Financial transparency: leading cloud providers using portal-based provision and billing systems should be able to tell you exact costs at contract, using pay-on-demand models
- Data security and quality: a cloud provider should at a minimum be able to offer an ISO27001 and ISO9001 accredited service to ensure data security
- Transitioning to the cloud: quality cloud service providers offer phased approaches to cloud adoption (which is a recommended procedure). Companies use both in-house and external cloud IT resources simultaneously to test applications and ensure governance and compliance, leading to a smooth transition to the cloud over a pre-determined period of time
- Flexibility: leading cloud providers recognise company requirements can change. Contracts should provide cost effective methods to move away from hosted cloud environments if required, and will promote that as a key service benefit
** Survey by Cobweb Solutions
Innocent Drinks case study
Cobweb Solutions smoothes out Innocent Drinks’ email headaches
Innocent Drinks, the maker of 100% fresh fruit smoothies turned to Cobweb Solutions for an outsourced IT solution to manage its communication and messaging requirements. The Microsoft Hosted Exchange service from Cobweb Solutions is reported to deliver an efficient and robust email service to Innocent employees based in its London, Manchester, Dublin, Amsterdam and Paris offices.
Innocent was established in 1999 as a small stall selling its smoothie recipes at a music festival. Today, stockists range from large supermarkets to small health stores throughout the UK. The company has doubled in size over the past 18 months and now employs 83 people. Many of the employees are based at the company’s headquarters in Shepherds Bush, London.
As with any growing business, Innocent required a scalable and robust communications and messaging system that could develop and adapt as the company expanded internationally. The organisation also required a system which would give remote offices a seamless connection to state of the art communication tools.
Prior to the implementation of Cobweb’s Microsoft Hosted Exchange service, Innocent was constantly experiencing problems with its in-house exchange server (fondly referred to as ‘Kiwi’). In particular, the company was close to the 16Gb database limit Microsoft had imposed on the small business server with exchange. This meant employees were frequently disconnected from the server if their email boxes reached capacity. Users were taken offline whilst the server was rebooted, resulting in periods of up to four hours downtime. With escalating data requirements, Kiwi could no longer cope and the system was becoming inefficient, preventing people from performing their roles.
Innocent also experienced high volumes of viruses and spam. Andrea Kalavsky, systems magician (aka IT systems manager), would spend valuable timescanning and blocking up to 20 spam messages per mailbox daily. Innocent required a communications and messaging email solution that could support its unique marketing activity.
The company encourages consumers to contact them via advertised email addresses, the details of which can be found on the bottom of the drink bottles. For example, email@example.com. Over time this strategy has contributed to the increase in mail volumes, data storage requirements and the number of Public Folders required to support the growth. One Public Folder alone had 150 different SMTP email addresses and housed 10s of thousands of emails.
The company faced a dilemma of how to resolve its communication needs. It could either purchase more hardware and employ additional IT staff to support its growing IT requirements, or it could select a fully managed outsourced service.
Advised by its IT consultants, Innocent opted for a Microsoft Hosted Exchange Service from Cobweb Solutions, a leading provider of such services in Europe. This involved handing the 24/7 management of its email, including spam and virus protection, archiving, backup and remote access capabilities to Cobweb Solutions. The service is based on a predictable pay-per-user pricing scheme, so there is no hidden expenditure.
Kalavsky, systems magician at Innocent Drinks, said: “Now Cobweb Solutions is managing our communications and messaging, we no longer have to worry about email downtime. Nor do we have to address the threats from viruses and spam as Cobweb has it all under control.
“In addition, we now have fully managed Blackberry services. This means we can communicate efficiently with our employees, suppliers and customers.
“We are thrilled with this service and particularly impressed by the fact the roll out to Blackberry services did not require the use of desktop software. It was as easy as simple activation and the entire outlook is now in our pockets. Our plan is to expand our original capacity of 70 users to 120 by the end of 2006.
“Online collaboration is another business requirement which Cobweb could help us to address. As we expand abroad, our overseas operations departments need to share documents with the UK teams. One of the options is to implement Cobweb’s Hosted Windows SharePoint Services solution, which will enable our disparate user base to have access to real-time business information, without having to solely rely on email.”
Mark Davies, business development director at Cobweb, said: “As a growing company, Innocent Drinks needs to concentrate on developing and expanding its business. Our Microsoft Hosted Exchange service has enabled the company to do this by taking away all of their communication and messaging management headaches.
“Our services are fully managed by highly skilled professionals. This means Innocent does not have to worry about implementing and supporting its own central infrastructure, email security, data backup or the associated unpredictability of running its own IT systems.
“By outsourcing its messaging and collaboration needs to Cobweb, Innocent now has a reliable communication solution in place. This offering gives the Innocent team access to email, diary, address books and business documents anytime, anywhere.”