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June 08, 2009

Cloud Computing’s Impact on E-commerce

If global meteorologists could predict the trends of e-commerce and computing, the forecast would probably reflect partially cloudy skies.  This is because more applications in the IT field are making the transition to cloud computing.  The clouds are rolling through and making their rounds but what effect will they have on e-commerce?  Continue the rest of this article to view a glimpse of the five-year outlook.

What the Cloud Has to Offer

What leads many to believe that e-commerce will be engulfed by the cloud computing storm is the cost benefits it has to offer.  In theory, the costs of cloud computing are based on consumption.  There is no software, hardware or infrastructure to buy and in most cases, you simply pay for what you use.  The idea of cloud computing being cost effective is centered around peak usage.  Let's say your website is at its busiest from November 26 to December 21 every year.  During these periods, you typically need more computing power, more disk storage and more bandwidth.  Through the rest of the year, your traffic only calls for a third as much of these resources.  In a traditional IT model, you would need to invest in a variety of components to handle your peak activity, even though much of those investments are left sitting idle for most of the year.  With the cloud, you only pay for the processing power, storage and bandwidth you need, meaning you don't have to pay for times when your business is idle.

A Word From the Experts

Some IT experts are predicting that within the next five years, nearly 90% of all e-commerce businesses will be leveraging some form of cloud computing in their operations.  A bold statement?  Perhaps.  But maybe not when considering that many online merchants are already using some type of the cloud as we speak.  Just think about the businesses that rely on hosted shopping carts.  They have already moved beyond traditional computing means to web applications that can be defined as variations of cloud computing.  It is very likely that more companies will simply offload their infrastructure, development and software applications to the cloud, a trend that has been going on longer than most realize. The transition shouldn't come as a surprise, yet viewed as a new way to describe what many e-commerce businesses have already started doing.

Summarizing the Cloud

In many ways, cloud computing simply refers to what several e-commerce businesses have been doing for sometime now.  Since the term has been popularized in recent times, more people are becoming aware and thus, more businesses are heavily considering the transition.  The concept is catching on but not all cloud advocates in the e-commerce world will be cloud users.  For example, it would be unlikely for major companies such as Google and Amazon to utilize the cloud for cost benefits or added flexibility.  However, they probably wouldn't mind raking in the profits by selling cloud services to others.

Tags: online merchants,  IT,  e-commerce,  cloud computing,  cloud,  bandwidth,  storage,  shopping carts