The Greater the Flow, the Bigger the Pipe: Part 1

I recently attended a conference for CIOs of leading national retailers, and if attendees agreed on one thing, it was the increasing use of cloud-based applications.  Whether it be for point-of-sale, inventory, back office, or customer-facing applications, retail operations are turning away from the use of local applications hosted on local servers.

There are many good reasons for this. Companies can reduce capital spending for new servers. They don’t need as many in-house IT staff. They have access at a local level to a much broader range of applications and services. And they can pay for all of this on an as-used basis.

However, this new functionality comes at a cost. In the past, the only time a retail location had to go out over the Internet was when it needed to sync up with the corporate server. Typically, this would be done at night or during slow times. But now, with the increase in real-time use of the Internet, retail locations must ramp up their bandwidth to handle all of this new traffic.

Currently, a typical retail location might have a T1 line with about 1.5 megabits of bandwidth. That’s just not a big enough pipe to support rapid credit card transactions-- plus everything from inventory management to customer rebates, digital advertising, and guest WiFi. Retail locations that are moving to the cloud but haven’t upgraded their connectivity are literally being brought to their knees. Their systems just can’t handle the demands of the new cloud-based environment. 

To be able to meet corporate productivity and performance benchmarks, and meet the expectations of staff and customers alike, enterprises with numerous distributed retail locations must simultaneously increase the capacity, the resiliency, and reliability of their network connections.

For every second a retail location is down productivity decreases, money is lost, and customers are dissatisfied. Retail locations that continue to rely on T1, cable, or DSL are paying more than they need to for connectivity—while putting themselves at increased risk. (One of the nation’s largest donut chains said that of its 6,500 stores, more than 40 are without Internet connection at any given hour of the day. That should be unacceptable to any enterprise, and is completely avoidable.)

In my next post, I will talk about ways companies can reduce cost and risk and get both the bandwidth and the resiliency they need to support the emerging new cloud-enabled environment.