Cloud computing enables a retailer to rent Internet-based computing power and data storage to support its web business. Users can ramp capacity up or down in minutes and only pay for the power and capacity they need. That can provide e-retailers with significant cost savings and flexibility, but it also can expose them to risks.
Tony Burton, CEO of Wolfmont LLC, which operates The Digital Bookshop, an online retailer of print, electronic- and audiobooks, is hesitant to use cloud technology because he is scared that if his Internet service goes down, he will be left in a lurch.
“As a small business in a rural area, Internet service is sometimes sporadic. It's a bad spot to be in, to need information and know it exists, but to be kept from it simply because the local DSL provider has lost connectivity for whatever reason,” Burton says. “Much of America still does not have access to reliable high-speed Internet, or any high-speed Internet at all. I work with an author who lives in rural Arkansas, and her absolute best speed available is 22 kilobits per second. There is no cable or DSL,” he says.
Other retailers worry about losing control when their data is online. “If I have the server in my closet and I know what I’m doing, I’ve got complete control. By outsourcing it I’ve removed that hands-on aspect,” says Dean Richardson co-founder of Genlighten.com, a site that enables visitors to search for and purchase genealogy documents.
That exact fear came to fruition this summer for e-retailers using a software-as-a-service-based cloud version of site search from SLI Systems. The vendor’s system went down for 37 minutes when SLI’s domain name hosting facility experienced a temporary failure of all its servers.
E-retailer Jelly Belly has been an SLI Systems client for two years and it says it is happy with the vendor. In fact, e-commerce marketing manager Jason Marrone says the incident was the first time the system has gone down for Jelly Belly.
“We received a letter but honestly had no idea that we had experienced an outage so it appears to have had little impact on us,” he says. “I was relieved to find that SLI was monitoring the service closely and happy that they were proactive in informing us. Like any technology service, whether internally hosted or in the cloud, you are going to have down time. There’s just no way around it. It happens to Amazon and eBay and it happens to us.”
SLI CEO Shaun Ryan says after the outage, SLI upgraded its domain name hosting facility and also added a back-up system in case the main facility goes down. “As a result, our customers now have a better service than they did before. Over time we’ve evolved our architecture so it’s now extremely strong,” Ryan says. “For example, each site search is hosted in multiple geographic locations, with triple redundancy in each location and full monitoring, backed by 24/7 support. For most of our customers the search is now the most reliable function on their site.”
Despite some fears about control, Richardson says the benefits of cloud technology far outweigh the cons. Richardson recently moved his e-commerce site to a cloud-based infrastructure from Engine Yard. Engine Yard has access to many web application and database servers, and adjusts capacity as needed.
Richardson says operating in the cloud eliminates the worry of having enough server capacity and poses less financial risk.
“It’s less hassle because someone else administers the servers and adds or subtracts them virtually as needed and we pay for just what we need, and that's a lot less than the cost of buying our own servers,” Richardson says. “If we committed to hardware up front, we could be on the hook for lots of money even though our revenue wasn't growing like we hoped.”