Cloud computing is now pervasive in almost every sector – from cybersecurity to SaaS – but its benefits in e-commerce 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 and managing expensive physical servers.
Moreover, 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.
4 Ways Cloud Computing Affects eCommerce
With all that in tow, let’s look at how cloud computing affects e-commerce.
Enhances profitability
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 for expert personnel to manage and maintain IT assets. Hence, overall costs decrease 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 cheaper 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 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. Frustrated, they may exit or go to a competing page. But, of course, that’s the last thing you want.
Scalability
Regarding true 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 overwhelmed.
Cloud computing is inherently scalable – there’s no need to buy physical servers to cater to the demand, and you can 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, Alibaba Cloud, to ensure everything functions smoothly. For example, in the first iteration of Singles Day, Alibaba Cloud could support 2.4 billion page views in 24 hours.
In 2017, cloud computing supported 256,000 payment transactions on Alibaba’s website every second.
The engineers at the firm prepare for the event several months in advance, constantly stress-testing the cloud server to ensure everything runs smoothly.
This would have been more difficult to predict and manage if the e-commerce firm relied on physical servers to balance the load.
And not just e-commerce firms benefit from this exciting new technology. Here are some ways in which 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 environment to be able to work together. All your business documents, processes, and key data resources can be uploaded to the cloud and accessible to all with a 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, you can maintain a centralized repository from which all employees can learn.
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 many customers, it will lead to immense negative publicity and an ensuing loss of revenue.
E-commerce providers can’t afford downtime and must ensure a top-notch customer experience. So they’re effectively outsourcing cybersecurity using cloud computing, as the provider is responsible for ensuring it. This isn’t bad because it reduces costs and frees up resources.
Cloud computing is an option, but there is more than one way to minimize your business’s cybersecurity risks.
Conclusion – Ways Cloud Computing Affects eCommerce
Cloud computing has significantly impacted eCommerce, providing businesses with new ways to store and manage data, optimize website performance, and scale their operations. Some of the key ways that cloud computing is affecting eCommerce include:
- Increased scalability: Cloud computing enables eCommerce businesses to easily scale their operations up or down as needed without investing in expensive infrastructure.
- Enhanced website performance: By leveraging cloud-based solutions, eCommerce sites can deliver faster load times, improved reliability, and better overall performance.
- Improved data management: Cloud computing provides businesses with more flexible and efficient ways to store and manage large amounts of data, enabling them to make better-informed decisions and improve customer experiences.
- Streamlined operations: Cloud-based solutions can help eCommerce businesses streamline operations by automating processes, reducing manual tasks, and improving overall efficiency.
Overall, cloud computing is transforming eCommerce, enabling businesses of all sizes to act more easily and effectively compete in today’s rapidly changing digital landscape.
