The Benefits of Commerce in the Cloud

By now much of the digital world is familiar with "the cloud," which is the use of computing resources (e.g., hardware, software, infrastructure) delivered as a service over a network. The method of delivery allows data to be accessed from any device with an internet connection and web browser. The alternative — and traditionally the common model — is licensed, on-premise software, which is installed locally on the hardware and servers of the purchaser and managed internally.

Cloud is now a viable option to support multichannel operations, and there are several key reasons why retailers of any size are attracted to cloud-based commerce platforms, including the following:

• Continual innovation: Enhancements are delivered continually to users without disruption of day-to-day operations or costly upgrades.
• Productivity: Removes the burden of managing infrastructure and upgrades that don't add value, and allows both IT and business teams to focus on core competencies such as merchandising, marketing and customer service.
• Open architecture: Efficiently extends the commerce platform to other channels and devices, allows developers to program in the language of choice, and enables an array of third-party technologies to maintain integrations to a common code base.
• Global by nature: Enables enterprises to plug into a secure, scalable and reliable environment that's purpose-built to support intense processing volumes and automatic redundency.
• Lower total cost of ownership: Removes initial investments for licensed software and reduces implementation costs. Over time, additional users and sites are introduced to the platform with minimal capital expenditures.

Another advantage of managing commerce in the cloud is the opportunity for economic alignment with the provider. On-premise software models are focused on license sales, yearly maintainence fees and future module sales. This doesn't foster a close working relationship. Cloud providers, on the other hand, are typically focused on maintaining and nuturing an ongoing relationship focused on mutual success from day one. This alignment with clients, and their goals, keeps cloud providers focused on and accountable to their ongoing success.

Columbia Sportswear: Finding Success and Growth in the Cloud
In 2008, Columbia Sportswear, a leading outdoor apparel and product retailer, created a digital commerce strategy to serve consumers and business partners across brands, geographies and channels. Given the dynamic and global nature of its business, Columbia needed a scalable, flexible and cost-effective solution to manage its presence for all four of its brands (Columbia, Sorel, Mountain Hardwear and Montrail) while supporting a complex mix of transactions in different languages and currencies. The retailer decided that Demandware's cloud-based commerce platform would provide the flexibility and scalability necessary to grow and support its business around the globe. It was right.

Columbia began its implementation in February 2009, and its first site, Columbia.com, went live in August 2009. By leveraging cloud technology to quickly and efficiently expand its global brand presence without the cost and overhead of managing multiple on-premise platforms, Columbia was able to quickly deploy a number of additional sites, including:

• more than 26 sites across its four brands with local merchandising, language, pricing, currency, fulfillment and payment methods;
• Columbia and Sorel sites in the U.S., Canada and 10 European countries;
• mobile-optimized sites in the U.S. across its four brands; and
• an additional 13 branded non-e-commerce sites across Europe and Asia.

Multichannel retailers need the flexibility to quickly and cost effectively respond to market challenges and changes. Columbia leveraged a single, cloud-based common platform for efficiencies and economies of scale to gain a competitive edge against competitors that took more costly, less manageable multiplatform e-commerce approaches.

Is the Cloud Right for Your Business?
Retailers must be clear about what they want to achieve so they can choose the best possible fit for their business. Considerations such as future scalability, reliability, brand control, capacity to continually innovate and revenue growth objectives are key.

Turning to a cloud model to support and enable commerce operations has increasingly become a viable option for both large and growing multichannel retailers. The growing use of cloud for consumer technology — e.g., music, email, document storage and even banking — has opened many executives’ eyes to the benefits of cloud for business technology. It begs the question: We live our life in the cloud, why not run our business in the cloud?

Rob Garf is the vice president of product and solutions marketing for Demandware. Rob can be reached at rgarf@demandware.com.