Cloud tech becomes a retailing priority amid COVID-19

Photo: Getty Images/Vladimir Vladimirov
Aug 18, 2020
Tom Ryan

Cloud spending has accelerated during the pandemic. Online collaboration and remote working tools, e-commerce, remote learning and content streaming hit new records during lockdowns, according to Canalys, the research firm.

Canalys found worldwide cloud infrastructure services market spending jumped roughly 11 percent during the second quarter from the previous three months and 30 percent year-over-year.

The growth comes as a number of reports have arrived touting cloud as one of the primary focuses for corporations overall as 2020 IT budgets shrink in response to COVID-19.

Gartner noted that in a budget-conscious environment, SaaS and other pay-as-you-go models supporting outsourced cloud services enable CIOs to invest significantly less cash upfront rather than scaling up on-premises data center capacity or acquiring traditional licensed software. Cloud systems also enable technologies such as artificial intelligence, machine learning and 5G that drive digital transformation.

“Any debate around the utility of public cloud has been put aside since the onset of COVID-19,” said Sid Nag, research VP at Gartner, in a statement. “For the remainder of 2020, organizations that expand remote work functionality will prioritize collaboration software, mobile device management, distance learning educational solutions and security, as well as the infrastructure to scale to support increased capacity.”

In a new KPMG report based on a survey of 900 technology execs, 56 percent said cloud migration has become an “absolute necessity” instead of “piecemeal migrations of small datasets” due to COVID-19. Demand for hybrid cloud models far surpassed other strategies, including multi-cloud, that dominated pre-crisis.

Only a minority of executives considered their organization’s cloud capabilities to be strong. While initially utilizing cloud systems to drive down costs, organizations were found to be struggling to ensure new workloads and tools were adequately functioning and secured.

“When it comes to cloud, many companies have been comfortable moving
 at their own pace and doing the easy things first — one application at a time, one proof-of- concept at a time,” said Priya Emmanuel, managing director, cloud strategy and transformation, KPMG in the U.S. in the report. “The COVID-19 situation has put into perspective how unprepared many organizations are to suddenly have to do things differently.”

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20 Comments on "Cloud tech becomes a retailing priority amid COVID-19"

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David Naumann
David Naumann
CEO and President, Cogent Creative Consulting
7 months 29 days ago

Cloud-based applications have become very popular in the past few years and the pandemic accelerated the move to the cloud. Cloud-based collaboration tools and core applications not only improve productivity, but also reduce total cost of deployments and ongoing maintenance.

Jeff Sward

Cloud technology instantly became table stakes with the onset of COVID-19. Even before COVID-19, if you were going to use words like “omnichannel” or “seamless” or “integrated” then cloud technology was a big part of the solution. “Work from home” is also now table stakes for the foreseeable future, and probably forever in many ways. Cloud technology is now part of the oxygen keeping businesses alive.

Stephen Rector

Cloud migration is no longer a nice to have – it’s a must have for retailers, especially with most major retailers announcing work from home policies through the end of the year.

Richard Hernandez

Where this was on the wish lists of a lot of organizations, the pandemic has accelerated the implementation of cloud-based resources to help in not only keeping up with increased remote work, but in streamlining cumbersome processes as well.

Perry Kramer

An accelerated and strategic move to cloud technology is at the top of almost every retailer’s priority list. In addition to allowing retailers to reduce the percentage of IT investment spent “keeping the lights on,” well-negotiated cloud agreements allow the retailer to scale up and down capacity and costs. Done well it is also a long-term model that should avoid the trap of trying to maintain inefficient, inflexible, and disproportionately expensive seven+-year-old technologies that almost every retailer has at least a pocket of. The good news is retailers have been on this road and now need to accelerate. To see what could have been, look at the many state governments trying to make changes to their COBOL code-based unemployment systems.

Gene Detroyer

Like with so many other things, COVID-19 has accelerated our move into the future. I wonder, what else will be accelerated? Has that 10-year or 15-year horizon turned into three years or five years?

Brandon Rael

Cloud-based architecture and business solutions have emerged over the past 10 years. While there were some concerns and apprehensions about data security and privacy, those have been mitigated as the cloud solutions have matured. With the great acceleration caused by COVID-19, the move to digital touchless commerce has necessitated migrating to an agile, flexible, and scalable solutions architecture.

Data sharing, collaboration, and having one view of the customer is a key imperative to providing outstanding cross channel commerce experiences. The timeline has shifted from a long term initiative to an immediate strategy to meet the changing times.

Cathy Hotka

Cloud means agility — a necessity for retailers in times as uncertain as these. Retail IT teams are very heads-down making these transformations, and saving their companies in the process.

Ricardo Belmar
Ricardo Belmar
Retail Transformation Thought Leader
7 months 29 days ago

Most organizations were in the process of furthering their cloud strategy before the pandemic started. COVID-19 has accelerated cloud adoption and network upgrades connecting them to the cloud and becoming critical lifelines for ongoing business. What was previously a strategic move has now become table stakes from both a cost perspective and a survivability perspective. Cloud apps are key for retailers to successfully implement omnichannel capabilities, improve inventory management, and develop seamless order management capabilities to serve customers with BOPIS, BORIS, curbside, and every other customer service and experience offering that has become prevalent during the pandemic. Retail IT groups have mobilized to rapidly adopt these solutions as well as upgrading their legacy store networks to become cloud-optimized. Bandwidth alone isn’t enough anymore and retail IT groups know how critical this is to compete during the pandemic.

Peter Charness

While cloud provides a cost benefit, it also provides speed to value based on the discipline that often comes along with the cloud implementation. You get what you get and there’s no point spending months and months in design meetings deciding what to modify.

Ken Morris

This has been a long time coming but COVID-19 has pushed the cloud to the forefront. Cloud based real-time retail has been waiting in the wings for some time and retailers have been slow on the adoption curve. The promise of this technology is worth the hype. How can you compete with Amazon when your legacy applications don’t talk in real time, when your inventory is a day late and a dollar short? I believe the combination of 5G and COVID-19 have taken 3+ years out of the adoption curve. The time is now to embrace the cloud.

Ananda Chakravarty

Cloud technology continues to grow and collaboration tools for working from home are a key reason. Gartner expects 6.3 percent growth in 2020. This growth will span across the entire spectrum of applications used by retailers. The important fact to consider is that cloud was a costly but necessary strategy before the pandemic. Companies are trying to contain costs and cloud services have begun to make up a substantial portion of these services. For long run investment cloud services are solid, but even Microsoft Azure has slowed its pace from 59 percent to 47 percent. Retailers are looking for ways to lower costs during the pandemic and, despite its importance, cloud services are being cut to leanness, keeping only the choice cuts.

Gary Sankary

It has been incredible to see the speed at which our industry has accelerated adoption for capabilities that support remote work, touch free commerce, and digital transformation. To see massive organizations pivot from on-site models to remote work overnight would not have been possible if the cloud infrastructure were not in place to enable this. Now the priority is to quickly identify business opportunities while mitigating risk to team members and customers. I will be interested to see what new innovations using cloud-based technology will emerge to keep team members and customers engaged.

Ralph Jacobson

It only makes sense these days to subscribe rather than own. Let others manage and develop your technologies. It’s rarely a retailer’s core competency to house apps and development on-site. The craziness of today only exacerbates the need to be agile enough to pivot without delay to set and meet the trends of society.

David Biernbaum

Retailers and brand suppliers are still trying to get a better grasp on all current and developing situations so that they can make more informed decisions. Since we do not know what the future holds, or what the timeline will be, the use of cloud technology is evolving each day to something not quite the same as the day before.

Steve Montgomery

As with many things since the onset of the pandemic, cloud-based technologies went from a needed-to-win to a needed-to-play. Companies could no longer say, we’ll look at that next year or it is on our road map for next year.

Whether it was work from home capabilities or retail applications companies suddenly found they needed them now — not tomorrow. This pivot has been handled well by some companies and not so well by others.

Zel Bianco

The ability to work collaboratively is a must. The ability to do that productively and cost effectively means the use of cloud technology is a must as well.

Casey Craig

Because of the pandemic, retailers who didn’t have digital capabilities well established were forced to implement them almost overnight. Cloud is a must to move at that pace of change. Given the speed and success of enabling these capabilities during COVID, cloud investments are going to significantly increase and migration to the cloud will be accelerated.

James Tenser

Remember the Paradox of Scale: The larger the organization, the more remote it is from its customers. Heavy analytics and decision-support belong in the cloud, but highly responsive sensing and tools belong on the edge. By “edge” I mean in the store — in the devices that team members use every day to get the work of merchandising, ordering, and customer service done right.

Kim DeCarlis

To quote Satya Nadella of Microsoft, as a result of the pandemic “we saw 2 years of digital transformation in 2 months.” While on-premises solutions are an option, most retailers today don’t want to be constrained by them with their limited deployment options and ability to scale. And with so many non-essential roles working from home, on-premises solutions become increasingly difficult to deploy, manage and maintain. Cloud solutions that can help retailers pivot their businesses quickly and scale as needed are a preferred option — particularly if they help with customer experiences and multi-channel engagement. One important priority change is that of security … with more digital properties come a broader threat surface. It is important that retailers plan for this in advance.


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