- eCommerce

4 Ways Cloud Computing Affects eCommerce

Cloud computing is now pervasive in almost every sector – from cybersecurity to SaaS – but its benefits on the e-commerce space are manifold.

However, before we dive into how cloud computing affects e-commerce, let’s take a closer look at understanding how cloud computing works.

The term ‘cloud’ refers to data storage on the internet.

The advent of cloud computing means companies don’t have to invest resources in building out and managing expensive physical servers.

What’s more, cloud computing reduces the time to market and drives down development costs. It’s also inherently scalable as you can add resources as and when needed to deal with spikes in network traffic.

With all that in tow, let’s take a closer look at the ways cloud computing affects e-commerce.

Enhances profitability

By using a cloud computing provider like Amazon Web Services or Microsoft Azure, e-commerce companies don’t need to purchase expensive equipment and dedicate physical space to store servers.

There’s also a reduced need to hire expert personnel to manage and maintain IT assets. Hence, your overall costs go down as your cloud computing provider is responsible for system upgrades and adding new hardware and software.

This is important from an e-commerce perspective. Margins in this business are razor-thin because the onus is on e-commerce sites to provide products at a cheaper price than what people could buy in offline, retail stores.

Lower downtime means e-commerce store owners don’t have to worry about network outages that can eat away at sales and revenue.

After all, even a potential outage of a few minutes means customers trying to land on your page or checkout will get an error notification. Out of frustration, they may simply exit or go to a competing page. That’s the last thing you want.

Scalability

When it comes to dedicated shopping events like Black Friday, offline retail stores often have to hire seasonal staff and deploy extra merchandising space to cater to the spike in demand.

An e-commerce store operates on the same principle – unless you add more network capacity during an anticipated rush in orders, you can expect your site to crash as it’s simply overwhelmed.

Cloud computing is inherently scalable in nature – there’s no need to buy physical servers to cater to the demand and you can just request more bandwidth from your provider instead.

Let’s take an example. China’s Alibaba, one of the biggest e-commerce sites in the world, runs an annual shopping event on the 11th of November, referred to as ‘Singles Day’.

The company relies on its proprietary cloud computing technology known as Alibaba Cloud to make sure everything functions smoothly. In the first iteration of Singles Day, Alibaba Cloud was able to support 2.4 billion page views in 24 hours.

In 2017, cloud computing supported 256,000 payment transactions on Alibaba’s website every single second.

In fact, the engineers at the firm prepare for the event several months in advance, constantly stress testing the cloud server to make sure everything runs smoothly.

This would have been far more difficult to predict and manage if the e-commerce firm relied on physical servers to balance the load.

And it’s not just e-commerce firms that benefit from this exciting new technology. Here are some ways of how cloud computing is protecting retail businesses too.

Collaboration

A core benefit of cloud computing is that it fosters collaboration among team members.

There’s no need to be present under the same roof or environs in order to be able to work together. All your business documents, processes, and key data resources can be uploaded on the cloud and accessible to all with the password.

E-commerce businesses can leverage this to their advantage.

For example, if you’re looking to scale outside your current country into new economies then you can maintain a centralized repository where all employees can learn from.

Furthermore, your developers can be spread out across different locations with cloud computing facilitating knowledge sharing.

Security

Cloud computing providers ordinarily have thousands of businesses as clients and, as such, need to ensure that their security parameters are top-notch.

That’s because one successful cyber attack not only affects lots of customers, it will definitely lead to immense negative publicity and an ensuing loss of revenue.

E-commerce providers can’t afford any downtime and must ensure a top-notch customer experience. By using cloud computing, they’re effectively outsourcing cybersecurity as the cloud computing provider is responsible for ensuring it. This isn’t a bad thing because it reduces cost and frees up resources.

Cloud computing is definitely an option, but there is more than one way to minimize your businesses’ cybersecurity risks.

4 Ways Cloud Computing Affects eCommerce

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