In an interaction with Dataquest, Ajit Melarkode, Managing Director, Asia Pacific, Rackspace says that retailers are using cloud- based tools to engage customers and the global trend is a rapidly accelerating and rampant use of cloud computing.
What are the business imperatives of cloud for Indian retailers?
The cloud is flexible, in terms of both functionality and pricing. Retailers no longer have to maintain IT solutions on their own, and instead outsource such tasks to vendors. These service providers maintain the cloud environments, enabling clients to focus on their business. For retail brands, this means more time and resources focused on serving customers.
It is important for retailers, firstly, to build seamless platforms. Retailers can create a seamless customer experience requires seamless platforms. Secondly, retailers can use cloud to deliver real customer value, providing solutions rather than commodities. Thirdly, retailers can use the cloud to deliver incremental growth in new markets and services.
Cloud computing can help accelerate each of these three business goals.
What trends have you observed during your experience working with retail companies globally and in India?
In India, the IT industry in retail is in the midst of a massive structural shift – from the PC and client/server based 2nd platform of technology growth and innovation to the 3rd platform – built on Big Data, Cloud, Mobile and Social Technologies.
Retail entrepreneurs with and without IT background are leading a revolution in business practices by incorporating cloud-based applications. The number of such entrepreneurs is small today and is mainly restricted to those in the service sector, but others are emulating the success stories of these pioneers. Players in tier-II and tier-III towns are also experimenting with these cost-effective IT solutions to expand their businesses and build an edge in their fast growing markets.
Retailers are using cloud- based tools to engage customers. The global trend is a rapidly accelerating and rampant use of cloud computing.
In your perspective, why must the retail sector adopt cloud? What are the expected savings, and the key areas that retailers will enhance by using cloud?
Big box and boutique retailers alike see that eCommerce competitors continue to use technology as a means to win on price and selection, and know their customers increasingly use smartphones in-store to compare prices or search for deals. In order to remain competitive, brick-and-mortar stores must look to cloud computing as a way to upgrade their technology without busting their budgets. Perhaps most important, cloud offers retailers a way to explore the potential of big data analytics to understand their customers better.
The Internet has hugely disrupted the retail industry. The retail industry’s IT landscape is expanding well beyond traditional ERP, CRM and supply chain management. To compete, retailers are using new technologies such as web and click-stream analytics, big data and social media to identify individual customer preferences and behaviors that can offer personalized shopping experiences to build loyalty.
Doing all this means managing massive amounts of both structured and unstructured data and requires large amounts of compute power and storage. A cloud-based solution, with elastic storage, computing and analytics capability, is a natural fit.
In a cloud, virtual servers can scale on demand depending on the need for computer capacity. That’s very useful for retailers, whose businesses are characterized by periods of normal activity interspersed with high demand spikes during weekends and holidays, or promotional campaigns. With cloud computing, the CIO can design the IT infrastructure for a base load and simply source additional compute resources on demand to handle spikes.
A Rackspace survey released in 2014 found that while huge numbers of consumers in Asia-Pacific are using their smartphones to browse and purchase items on m-commerce websites, the impact of a poor user experience could be damaging. The report shows consumers’ frustration levels run high, as 78 per cent of consumers surveyed experience technical issues while browsing sites on their smartphones which directly impact their purchasing decisions and perception of the company. 28% of consumers surveyed said that they would not make purchases from an m-commerce site if they experience technical glitches. Nearly all of them – a phenomenal 93 per cent mentioned that their view of a brand would be affected if its website did not work smoothly and consistently posed the same problems. This once again reiterates the importance of adopting cloud for a seamless customer experience.
4. Can you give us a use-case where a retail company has deployed your solutions and what ROI has been attained till date?
C-bazaar, the largest online Indian ethnic wear store, with patronage in over 130 countries worldwide, wanted to partner with a trusted managed cloud company who could provide a high quality and reliable hosting experience.
The company placed importance on the need for scalability to meet the demands of their growing customer base. Customer satisfaction is vital to any company and at Cbazaar; they ensured this with guaranteed uptime and availability to their customer’s 24×7. Another challenge was to improve and better the SQL database performance and maintenance.
We were capable of assisting in rapid deployment of new features on Cbazaar e-commerce portal. We provided the requisite IT capabilities to handle seasonal spurts in traffic on the website. It was also important to Cbazaar that the business continuity was maintained at all times and a set agenda in place for risk management. We ticked the boxes in these aspects and have been an able partner to Cbazaar.
Cbazaar.com was very impressed with our level of support. We offered uptime guarantees, thereby minimizing instances of downtime and allowing the website to manage a high volume of transactions at the same time. Cbazaar.com has been able to handle the growing traffic with greater ease, since the adoption of our solutions. The traffic on the website has increased multi fold on Rackspace hosted managed cloud. Cbazaar was able to focus more on the core activities of portal development and better customer engagement, as Rackspace’s support freed them of worries about technical aspects of website management. Cbazaar.com was also able to focus their time on building applications with new features rapidly. A round the clock monitoring and managed back up have immensely helped in proactively managing risks.
With support from Rackspace, Cbazaar has found it easier to achieve scalability in meeting the growing customer base. Additionally, Rackpsace’s Fanatical Support ensures that Cbazaar.com offers first class online shopping experience for their customers.
5. How does Rackspace see India from a global perspective?
Cloud computing is an emerging paradigm computing concept that enables both information technology infrastructure and software to be delivered directly over the Internet as a service. Rackspace identifies India as a robust and upcoming market. In India, cloud services revenue is projected to have a five-year projected compound annual growth rate (CAGR) of 33.2% from 2012 through 2017 across all segments of the cloud computing market. The major trend in India is of faster adoption of cloud technologies, as an enabler of organizational value and strategic agility. We see Managed Cloud as the dominant trend, there is a debate as to whether businesses should be looking at either managed or unmanaged cloud infrastructures. Therefore, Rackspace’s outlook towards India has always been positive and we expect to see demand for managed cloud to grow.
6. Is India one of the fastest growing markets for Rackspace?
Companies in Asia-Pacific are rapidly adopting cloud to increase application response and scalability, as well as to expand the range of workloads running in the cloud. According to Gartner, nearly half of large enterprises will have hybrid cloud deployments by the end of 2017. In addition, an increased government spending on new e-governance projects based on cloud technology is likely to drive the market for cloud computing services in India over the coming years.
There are a number of reasons why India is an important market for Rackspace. To begin with our global data center footprints attract a number of westbound companies in India. This is an important category for us and one where we have much expertise. These companies have customers across US, Europe/UK and require a reliable provider to deliver their workloads. This is where they turn to us for hosting. India is also experiencing a huge eCommerce and startup boom. There are new ventures mushrooming every day that require IT assistance. For startups, our managed cloud is a great enabler as it allows them to concentrate on building their product as opposed to investing their time and energy in building the right IT infrastructure. Rackspace views this as an opportunity to further tap into the India market.