Cloud Computing Technology in Ecommerce

The e-commerce market has boomed thanks to rapid advances in cloud computing technology. According to Gartner’s report on the impact of cloud computing technology on e-commerce, e-commerce has allowed businesses to respond more quickly to market trends than in-house technologies, however, deploying cloud computing has also its cons which IT leaders must consider. It is approximately 92% faster to install an e-commerce platform using cloud computing technology than developing it in-house.

Cloud computing technology can be private, public, or hybrid. While private cloud services are delivered by a single organization or data center to internal users, public cloud services are provided as pay-per-use services by third-party providers over the internet. Hybrid combines the best of private and public cloud services.

Cloud services can be categorized into Infrastructure-as-a-Service (IaaS), Software-as-a-Service (Saas), and Platform-as-a-Service (PaaS). An example of each is :

IaaS - Netflix uses Amazon Web Services to host its platform and provide streaming video-on-demand.
SaaS - Shopify and Bold Commerce offering components or applications which allows online retailers to build their e-commerce site rapidly
PaaS - While this is not prevalent in e-commerce applications, there are some platforms such as Apprenda or Google App Engine.

The top four advantages that cloud computing offers for e-commerce applications are:

Improves Scalability

Cloud computing allows online retailers to quickly scale up or downsize their applications and services depending on market trends. Market trends may be seasonal, cyclical, or related to a long-term shift in preferences of target demographics. Many e-commerce solutions providers offer modules or components that can be added or removed, increase or reduce storage and/or computing power giving that flexibility to online retailers.

Increase in Speed

According to Amazon, a 1-second lag costs the company $1.6 billion in sales per year. For Walmart, a 1-second improvement leads to an increase of 2% in conversion costs. Online consumers prefer e-commerce platforms that are quick to load and intuitive. 40% of users will abandon a webpage if it takes more than 3 seconds to load, according to this article. Cloud computing technology providers continuously improve applications to be ‘light’ to offer speed in loading a website, scrolling through product pages, adding to carts, relaying online payments, or confirming orders. In-house e-commerce applications depend on the servers and technologies and are susceptible to crashing when there is high traffic. With cloud computing technology, online retailers do not have to worry about servers crashing because their technology providers have larger bandwidth and storage space across multiple servers to manage sudden spurts in consumer traffic. With higher speed, the impact on SEO is significant and beneficial for online retailers deploying cloud computing technology.

Reduces Costs

Adopting cloud computing technology for e-commerce applications enables online retailers to forego IT (hardware and software) infrastructure, which they have to invest in heavily upfront and keep upgrading as technology advances. Moreover, the business has to employ a large workforce to develop, run and maintain in-house infrastructure. With options such as pay-per-use and component/module-based structures, cloud computing lowers technology costs in terms of capital and manpower.

Security

According to an article in ITProPortal, the volume of monthly bot attacks on e-commerce platforms rose by 13% in 2021. Cloud computing technology provides the benefit of creating redundancy with saves a business from data loss. By duplicating data and having multiple hardware and software which upholds the cloud computing infrastructure, a business can restore its data and platform quickly from malicious attacks. Cloud data centers are constantly monitored by professionals, secured with robust firewalls, and comply with stringent security protocols and regulations to protect data.

The above factors provide a very strong no-brainer case for an online retailer to go for cloud computing technologies, however, the business needs to carefully choose the service provider based on these four factors. There are many cloud computing service providers in the market and the choice of the partner plays a critical part in a long-term e-commerce strategy.

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