Cloud Computing

Cloud ComputingRetail Sector

Group 10

Kshitij Gupta (8)Pratik Bansal (28)Pradeep Kumar Sharma (32)Deepank Paliwal (43)Prateek Bahl (57)Prateek Sachdeva (58)

ACKNOWLEDGEMENTWe feel immensely pleased in presenting this report as a part of our project in Information Technology for Business Decision.We would like to extend our word of thanks to Ms. Deepali for throwing light on the different aspects of IT, the formal and hence providing us an adequate path for the completion of this report.We would also like to thank all the seniors who had given their opinions regarding all the queries that we had during the course of this research.

Table of ContentsCloud Computing1Characteristics1Service Models2Deployment Models3Real-time Insight5Increased Savings51. Optimize your foundation72. Create a seamless Platform83. Engage Customers84. Innovate and Learn8New Applications9Strategic Applications9Legacy Applications9Example 1: WalMart10So why did Walmart start considering Cloud Computing 2011?10Benefits from Cloud Computing:11Future Scope of Cloud Computing in WalMart:12Example 2: Innovator case study: 3M Visual Attention Service12Challenge12Cloud-enabled business model:12Business results:13Example 3:Disruptor case study: Comcast Xcalibur13Challenge13Cloud-enabled business model13Business results14Security Issues faced by Cloud computing15Data Integrity15Data Theft15Privacy Issues16Infected Application16Data Loss16Data Location16Security on Vendor level16Security on User level16Legacy issue in implementation16

IntroductionCloud ComputingThe term cloud appears to have its origins in network diagrams that represented the internet, or various parts of it, as schematic clouds. Cloud computing was coined for what happens when applications and services are moved into the internet cloud. Cloud computing is not something that suddenly appeared overnight; in some form it may trace back to a time when computer systems remotely time-shared computing resources and applications. More currently though, cloud computing refers to the many different types of services and applications being delivered in the internet cloud, and the fact that, in many cases, the devices used to access these services and applications do not require any special applications. Many companies are delivering services from the cloud. Some notable examples as of 2010 include the following: Google has a private cloud that it uses for delivering many different services to its users, including email access, document applications, text translations, maps, web analytics, and much more. Microsoft Has Microsoft Sharepoint online service that allows for content and business intelligence tools to be moved into the cloud, and Microsoft currently makes its office applications available in a cloud. Salesforce.com runs its application set for its customers in a cloud, and its Force.com and Vmforce.com products provide developers with platforms to build customized cloud services.But, what is cloud computing? The following sections note cloud and cloud computing characteristics, services models, deployment models, benefits, and challenges.Characteristics Cloud computing has a variety of characteristics, with the main ones being: Shared Infrastructure Uses a virtualized software model, enabling the sharing of physical services, storage, and networking capabilities. The cloud infrastructure, regardless of deployment model, seeks to make the most of the available infrastructure across a number of users. Dynamic Provisioning Allows for the provision of services based on current demand requirements. This is done automatically using software automation, enabling the expansion and contraction of service capability, as needed. This dynamic scaling needs to be done while maintaining high levels of reliability and security Network Access Needs to be accessed across the internet from a broad range of devices such as PCs, laptops, and mobile devices, using standards-based APIs (for example, ones based on HTTP). Deployments of services in the cloud include everything from using business applications to the latest application on the newest smartphones. Managed Metering uses metering for managing and optimizing the service and to provide reporting and billing information. In this way, consumers are billed for services according to how much they have actually used during the billing period. In short, cloud computing allows for the sharing and scalable deployment of services, as needed, from almost any location, and for which the customer can be billed based on actual usage.Service ModelsOnce a cloud is established, how its cloud computing services are deployed in terms of business models can differ depending on requirements. The primary service models being deployed (see Figure 1) are commonly known as: Software as a Service (SaaS) Consumers purchase the ability to access and use an application or service that is hosted in the cloud. A benchmark example of this is Salesforce.com, as discussed previously, where necessary information for the interaction between the consumer and the service is hosted as part of the service in the cloud. Also, Microsoft is expanding its involvement in this area, and as part of the cloud computing option for Microsoft Office 2010, its Office Web Apps are available to Office volume licensing customers and Office Web App subscriptions through its cloud-based online Services Platform as a Service (PaaS) Consumers purchase access to the platforms, enabling them to deploy their own software and applications in the cloud. The operating systems and network access are not managed by the consumer, and there might be constraints as to which applications can be deployed. Infrastructure as a Service (IaaS) Consumers control and manage the systems in terms of the operating systems, applications, storage, and network connectivity, but do not themselves control the cloud infrastructure .Also known are the various subsets of these models that may be related to a particular industry or market. Communications as a Service (CaaS) is one such subset model used to describe hosted IP telephony services. Along with the move to CaaS is a shift to more IP-centric communications and more SIP trunking deployments. With IP and SIP in place, it can be as easy to have the PBX in the cloud as it is to have it on the premise. In this context, CaaS could be seen as a subset of SaaS.Deployment ModelsDeploying cloud computing can differ depending on requirements, and the following four deployment models have been identified, each with specific characteristics that support the needs of the services and users of the clouds in particular ways.. Private Cloud cloud infrastructure has been deployed, and is maintained and operated for a specific organization. The operation may be in-house or with a third party on the premises. Community Cloud cloud infrastructure is shared among a number of organizations with similar interests and requirements. This may help limit the capital expenditure costs for its establishment as the costs are shared among the organizations. The operation may be in-house or with a third party on the premises. Public Cloud cloud infrastructure is available to the public on a commercial basis by a cloud service provider. This enables a consumer to develop and deploy a service in the cloud with very little financial outlay compared to the capital expenditure requirements normally associated with other deployment options. Hybrid Cloud cloud infrastructure consists of a number of clouds of any type, but the clouds have the ability through their interfaces to allow data and/or applications to be moved from one cloud to another. This can be a combination of private and public clouds that support the requirement to retain some data in an organization, and also the need to offer services in the cloud.

Cloud computing in retail worldWith cloud technology already gaining adherents throughout the IT community, it is only a matter of time before cloud computing becomes commonplace in the business and economic sectors. The retail sector is fast becoming affected by the potentialities presented by cloud computing.

There has been a considerable amount of buzz about businesses running software, like customer relationship management (CRM), accounting, human resources, and other office applications, in the cloud. Big-name companies such as Amazon, Salesforce.com, Microsoft, and Google are also making the move to cloud computing. Instead of implementing their complicated applications themselves with their own IT departments, businesses can opt to run the apps on a shared data center. In SaaS (Software as a Service), which is one of the main offerings of cloud computing, applications can be provided on demand, over the Internet. With all the noise being made about the benefits of cloud computing for big business, retailers seem to be left behind. The Association for Retail Technology Standards, the standards division of the National Retail Federation (NRF-ARTS), released a report called "Cloud Computing for Retail" to provide guidance for obtaining the benefits of this computer technology. The ARTSCloud Computing Workgroup, at their ARTS Users' Meeting, also had a whitepaper intended to bust myths around cloud computing in retail.

However, a cloud-based killer app for the retail industry has yet to emerge, which is probably what is preventing retailers from enthusiastically joining the cloud computing bandwagon. At an International Data Corporation (IDC) conference about cloud computing, the retail industry had many attendees, but they told IDC that they were still investigating cloud computing and were not yet ready to buy. They also expressed their interest in the concept of the private cloud, which is just another way of saying that they want to use the technologies behind cloud computing to operate their own clouds for their businesses, possibly because they have issues with the security of data in the public cloud.

David Dorf, the director of technology strategy for Oracle Retail, advises retailers to choose cloud computing for apps that are not mission critical, like expense reporting or invoice matching, so perhaps the killer app that cloud computing needs to become more attractive to retail will be involved with the more generic processes such as these. There are already some products trying to leverage the cloud computing wave for retail, like an e-commerce cloud platform that lets retailers integrate social networking features into product detail pages on their websites.

Impact of Cloud Computing on Retailers

Internet-based computing has a number of implications for businesses. Among other things, retailers are empowered to improve their production and services while, at the same time, giving them opportunities to cut back on expenses.

Real-time Insight

How does a business get an accurate picture of its business performance at any given point? The traditional practice of business analysis, depending on how the data is gathered, provides information that may come in hours or days after data extraction. Now, this information isnt as real-time as we think it is. This information is something that actually happened several hours ago, which implies the consequent risks of possessing stale data.

With the emergence of cloud computing as an avenue for accessing business applications on the time, real-time analytics provide retailers with real-time insight into the current performance of business operations in comparison to key performance indicators. Aside from real-time insight, this application is beneficial for retailers because it allows predictive modeling, which can improve the effectiveness of business operations. Using real-time insight, retailers can fine-tune customer programs as necessary and immediately address problems with supply chain, merchandising, or marketing departments of their operations, among others. For example, using real-time inventory data, a retailer can re-organize the supply chain to ensure that the right product is delivered at the right time. Not only does real time analytics allow easy and time-saving inventory, it also cuts costs for extra inventories, which means more money for his business.Increased Savings

Retail cloud computing helps retailers monitor and immediately address deficient operations, thereby saving them any further costs due to deficient merchandise. On top of that, cloud computing decreases company expenditures, translating to further increased savings for the retailer. Randi Levin, the chief technology officer of the City of Los Angeles, recently revealed how cloud computing has helped her city save millions of dollars in information technology costs. Several more government agencies are implementing cloud computing and have achieved as much as 50% in savings associated with IT operations. If this works for large cities, imagine the billions of dollars in cost savings this can give retailers. Maintaining hundreds of computers and managing an IT department are not only demanding responsibilities, but they are also very expensive accounts. Cloud computing allows retailers to manage these critical applications centrally, thereby reducing both costs and complexity.

Implementation across Retail Sector

Cloud-based solutions for both consumer and business applications are achieving higher profiles, and they are already being used by a growing number of retailers to support their most important business functions including the mission-critical point of sale.Unlike many other technologies that retailers have had to adapt to meet their business needs, cloud computing was designed specifically with the cost conscious, data-deluged retail enterprise in mind. For retail CIOs seeking a quick ROI payback from any proposed new initiative, adopting cloud-based solutions offers almost immediate cost savings. Not only is there less need for up-front capital investment in hardware, software and deployment, but these on demand solutions are typically available on a per-usage basis. Operating in a highly seasonal industry, retailers have typically had to make IT investments sufficient to support their busiest times. In contrast, per-usage pricing opens the door for retailers to literally use as much of an application as they need at any given time, achieving savings during less busy times. In addition, this pricing model allows retailers to move many IT costs from the capital expenditures budget line to the operating expenditures line.

Planning For CloudGetting business value from a cloud strategy requires planning. Cloud computing is mature enough to allow for specific guidance to retailers about leveraging the cloud. Using this four step approach can ensure that you are ready to maximize business value from your cloud investment.

1. Optimize your foundation

When we look at how cloud computing can help the retail enterprise we always advocate starting with an intelligent retail foundation. Just as you would not select your product assortment until you know what kind of retail store you will operate, so it is that there are some foundational aspects of your business that make sense to cloud enable first. Early considerations for cloud computing includes solutions such as: Supplier collaboration Forecasting Point of Service Operations

2. Create a seamless Platform

The next step is to connect all of your consumer experiences to the foundation. These consumer touch points include: Retail store or others Web Catalogue Customer call centre

Each of these touch points will need to take advantage of the foundation of information that is provided to the right device; based on the use case. This is where the foundational return on investment begins to take shape. By connecting these experiences retailers are able to: Achieve a seamless relationship with their customers. Take advantage of the best cloud enabled device for the job. Enable associates to be well informed with critical customer service information such as product availability and specifications.

3. Engage Customers

Customer Engagement is often the goal for any cloud based strategy. At this point we have enabled the business to support a single view of the customer across all touch points which enables a differentiated experience through aspects such as: Loyalty Digital Signage targeted or customized by demographic Interactive in-store applications Personalized shopping experiences including promotions

4. Innovate and Learn

Finally augmentation or growth of the entire retail business model is possible which enables the business to explore additional channels, social media connection and consumer mobility options which can drive differentiation for a brand.

Identify Your Cloud typeAfter addressing the considerations related to moving towards a cloud model, the next step is to identify the profile of the candidate applications. Defining the application profile will further define the approach to cloud enabling an application.

New Applications New applications that are targeted at a broad consumer base or that need to be consumed by employees wherever they engage consumers are definite candidates for cloud based delivery. With this, you still have the choice to provide the compute and the data either on premises or on a platform as a service (PaaS) offering such as Windows Azure.

Strategic Applications Applications in the Strategic category consist of solutions that you want to enable for broader access; but are part of your core line of business application offerings. Applications such as labour scheduling or merchandise forecasting may benefit from cost savings in a multi-tenant environment while allowing high scalability for peak times. Again, there is choice on whether you provide that scalability on premises or in the cloud. The main objective is to ensure that the applications are cloud ready and can run in a virtualized, scalable environment.

Legacy Applications Legacy applications that require complex integration with other internal systems and/or have very sensitive information may be best served by a private cloud environment that is highly scalable yet is only accessible from a secure device.Selecting an Approach With the information about basic considerations and the application profile, selecting an approach to modernizing an application becomes clearer. The simplest form of selection is to align application type to a specific cloud approach.

Type of ApplicationCloud TypeExamples

New ApplicationPublic CloudLoyalty, Promotions

Strategic ApplicationHybrid CloudStore Operations, Clientelling

Legacy ApplicationPrivate CloudLOB Apps,Financials

Examples of Cloud Implementation

Example 1: WalMart

WalMart before using Cloud Computing:1. $421.849 billion annual sales 20101. In 15 countries, 8500 Stores worldwide1. 2.1 million associates worldwide, Walmart employs 1% of America 1. US stores visited by 100 million customers every week. In other words, 1/3 of America goes to Walmart every week!!1. 1million customer transactions every hour1. databases estimated > 2.5 petabytesthe equivalent of 167 times the books in Americas Library of CongressSo why did Walmart start considering Cloud Computing 2011?

1. WalMart uses cloud computing to analyze its sales data. 1. The organization specifically adopted cloud based applications to visualize sales data and enhance its analysis for operations in china. 1. To meet Walmarts massive processing/storage capacity requirements1. Provide a flexible application development environment1. Provide information on the cloud architecture1. Allow for secure access to data outside of the corporate firewall1. Fast and easy scalability1. An environment that supports rapid application deployment1. Rapid application response times1. An environment that supports data quality and integrity1. An environment that places control in the hands of trained IT professionals1. A secure deployment and operational environment1. Accessibility to and integration of in-house applications and data1. A cost-effective solution for Walmart and their vendors1. Business intelligence capabilities1. A platform suited to mobile applications and accessibilityWalmart is looking to create a best-in-class global e-commerce platform to power anytime, anywhere shopping for our customers. The Platform team has been working tirelessly to build the tools to help our developers deliver big site changes faster, explains Walmart Public Relations Director Ravi Jariwala.

Benefits from Cloud Computing:1. Through adoption of cloud technology in this area of the business, the organization has been able to cut it operational costs by 75% with elimination of need for new servers. 1. With its abundance of prior experience in the retailing and distribution sector, in addition to its cloud computing and other cutting-edge technologies, WalMart China was quick to adopt new sales data visualization system. 1. The organization has even announced its plans for development of a cloud-based sales data visualization system for three of its Chinese sales centers in Shanghai, Shenzhen and Dalian. The new system will begin operations in September 2013.1. Deployment of the new cloud based system has facilitated customer interactions for WalMart. 1. The retailer can process status of orders rapidly, in addition to enhancing the sharing and analysis of information and standardizing business processes that previously relied on individual employee skills.1. Cost-Effective for Walmart and their Vendors - Without the need for application servers and database servers onsite, customers can save an average of $8,000 for startup hardware costs, depending on the number of users and the customers processing needs. by Chechelkonogov, Chief Technology Officer, Acumatica.1. Accessibility and Integration of In-House Based Applications and Data1. Secure Deployment and Operational Environment1. Rapid Application Response Times1. Flexibility in Application DevelopmentFuture Scope of Cloud Computing in WalMart:1. This will enable the company to develop more competitive sales activities. 1. In addition, the system will allow WalMart to view local information, including data by region and business category, in real time from the companys headquarters so as to quickly and seamlessly respond to changing consumer needs. 1. Moreover, by employing a cloud platform for the system, the company can avoid having to maintain new servers, network devices and other ICT assets. This, in turn, will reduce costs, including operational costs, by 75% (compared to building an on-premise system).

Example 2: Innovator case study: 3M Visual Attention Service

The 3M Visual Attention Service is an online scanning tool that scientifically analyzes design effectiveness based on how the average human eye responds. VAS marries vision science with technology to help designers, marketers and other communicators test the visual impact of their content and increase the probability that viewers will notice the most important elements of a design.ChallengeSince the global design community is made up of copious small design organizations, 3M needed to make the new capability accessible from anywhere, affordable to many and available as needed during a design project. By delivering VAS using cloud technology, 3M is able to offer the service on a continuous basis without requiring customers to install special software to use it. Hosting the solution via cloud also helps the company ensure the latest version is always available for customers. Cloud-enabled business model: 3Ms cloud-enabled business model allows it to offer a new solution, known as VAS, to a new audience the creative design community. The cloud-based offering allows 3M to transform its role in the product development value chain by closely integrating with a global network of designers. The affordable, flexible, cloud-based, pay-as-you-go model allows the company to deliver VAS in a fast, user-friendly manner that fits into a designers existing design process.Business results:By hosting VAS via cloud, 3M achieved: A highly scalable environment important during peak design times A low up-front investment and a flexible pay-as-you-go pricing model to help significantly reduce hosting costs and optimize profits The ability to attract new customers with an innovative solution while facilitating tighter integration within the product design ecosystem.Example 3:Disruptor case study: Comcast XcaliburComcast Corporation is a leading media, entertainment and communications company. It operates cable systems and develops, produces and distributes entertainment, news, sports and other content for global audiences. It is also one of the nations largest video, high-speed Internet and phone providers to residential and business customers. ChallengeIn 2011, Comcast piloted Xcalibur, its next generation cloudbased TV platform that aims to revolutionize the way people watch TV. Xcalibur moves the company beyond the delivery of channels and video via set top boxes that use digital television technology to leveraging cloud architecture that delivers live TV service to any Internet-connected device. Leveraging Internet Protocol (IP) technology, the company can update its guide and add features more easily and cheaply. It also helps Comcast meet the demands of connected customers to watch TV wherever they want and access content sources more seamlessly. Cloud-enabled business modelThe cloud-based platform shifts the ability to control content into the cloud. It enables live video feeds that serve the evergrowing numbers and types of mobile and connected devices. Customers can find content tailored to their needs in new ways, for example, by using an iPad app to choose channels, on demand videos and Xfinity online streaming videos. They can then watch their selected content when and where they want whether on TV, tablet or other device. This personalized TV experience, combined with a powerful search engine and Internet apps to access non-TV content, as well as the ability to share via social media channels, allows Xcalibur to create a radically different customer value proposition, with the potential of attracting entirely new customer segments in the future.Business resultsThe Wall Street Journal cited this move to the cloud as evidence of a new phase in how Internet technologies are transforming television. Benefits thus far to Comcast include: Meeting customer demands for easier access to TV and other Internet-enabled content Delivering content to more devices than before Creating new apps faster and more cheaply Making UI changes more quickly and easily

Challenges faced in Cloud computing in Retail IndustryThe advantages of cloud computing may be very appealing but nothing is perfect. Cloud got many issues legacy systems are not ready for the cloud prohibits modern applications such as mobility and social media.Security Issues faced by Cloud computingWhen it comes to Security, cloud really suffers a lot. The vendor for Cloud must make sure that the customer does not face any problem such as loss of data or data theft. There is also a possibility where a malicious user can penetrate the cloud by impersonating a legitimate user, there by infecting the entire cloud thus affecting many customers who are sharing the infected cloud. Some of the problem which is faced by the Cloud computing are: -1. Data Integrity2. Data Theft3. Privacy issues4. Infected Application5. Data loss6. Data Location7. Security on Vendor level8. Security on user levelData Integrity When a data is on a cloud anyone from any location can access those datas from the cloud. Cloud does not differentiate between a sensitive data from a common data thus enabling anyone to access those sensitive datas. Thus there is a lack of data integrity in cloud computing.Data TheftMost of the cloud Vendors instead of acquiring a server tries to lease a server from other service providers because they are cost affective and flexible for operation. The customer doesnt know about those things, there is a high possibility that the data can be stolen from the external server by a malicious user.Privacy IssuesThe Vendor must make sure that the Customer Personal information is well secured from other operators. As most of the servers are external, the vendor should make sure who is accessing the data and who is maintaining the server thus enabling the vendor to protect the customers personal information.Infected ApplicationVendor should have the complete access to the server for monitoring and maintenance, thus preventing any malicious user from uploading any infected application onto the Cloud which will severely affect the customer.Data LossData loss is a very serious problem in Cloud computing. If the vendor closes due to financial or legal problems there will be a loss of data for the customers. The customers wont be able to access those datas because data is no more available for the customer as the vendor shut down.Data LocationWhen it comes to location of the data nothing is transparent even the customer dont know where his own datas are located. The Vendor does not reveal where all the datas are stored. The Datas wont even be in the same country of the Customer, it might be located anywhere in the world.Security on Vendor levelVendor should make sure that the server is well secured from all the external threats it may come across. A Cloud is good only when there is a good security provided by the vendor to the customers.Security on User levelEven though the vendor has provided a good security layer for the customer, the customer should make sure that because of its own action, there shouldnt be any loss of data or tampering of data for other users who are using the same Cloud.Legacy issue in implementationOne of the most challenging cases to consider is the fact that legacy systems are not ready for the cloud. This shortcoming also prohibits you from taking advantage of modern applications such as mobility and social media. By transforming your legacy systems you have a modern platform to address the increasing demands of the technology savvy shopper.Legacy modernization can have a significant impact on a retailers ability to compete in todays market. The effort to modernize requires a unique discipline within the IT ecosystem. The effort to modernize applications and keep the business logic intact has become a critical enabler to reduce operational costs and improve operational efficiency.

References

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