Clouds and business. How cloud technologies help e-commerce
It is generally accepted that e-commerce, as a separate area of the economy, appeared in 1995, when Jeff Bezos launched Amazon. True, attempts to cross IT and sales were made back in the blessed sixties by several American airlines, which sought to automate the reservation and sale of air tickets in this way. Today, almost 30 years after the advent of Amazon, the e-commerce industry can easily compete with “offline” areas of business, and its development is greatly facilitated by cloud technologies. Today we will talk about their impact on the present and future of e-commerce.
E-commerce and cloud technologies
Now the very concept “
» has gone quite far beyond online sales: this area covers all business processes carried out using information systems, including billing and transaction processing. This same spectrum includes
,
,
electronic data interchange (EDI)
inventory management, as well as automated data collection and analysis systems.
On the other hand, cloud services existing today are globally divided into several types. This IaaS (infrastructure as a service) is a model in which computing resources are provided by a cloud service provider. IaaS provider provides storage, networking, servers and virtualization capabilities, eliminating the need for the customer to operate and maintain their own on-premises data center. Model SaaS (Software as a Service) involves licensing cloud-hosted software on a subscription basis. Finally, technology PaaS (Platform as a Service) allows customers to manage a modular package that includes a computing platform and a set of applications without having to build and maintain the associated infrastructure themselves.
What do clouds provide for e-commerce?
First of all, the introduction of cloud technologies into business processes contributes to maximum optimization of the infrastructure, increases the scalability, elasticity and economic efficiency of the project. Traditional infrastructure often cannot handle surges in traffic during peak periods, resulting in downtime or reduced performance. For example, in e-commerce, this can affect the speed of loading pages of an online store, the appearance of errors in the process of processing requests or filling out a shopping cart, placing an order and delivery. In fact, these are lost customers. Cloud platforms provide virtually unlimited scalability, allowing the client to increase or decrease consumed resources in real time, depending on current needs.
Moreover, regardless of whether we are talking about a sharp increase in traffic during the holidays, or a gradual increase in consumed resources due to the natural expansion of the business, the cloud platform allows you to smoothly manage the infrastructure without stopping servers and downtime. This phenomenon is called “elasticity”. Cloud platform resources are typically dispersed across geographically distant data centers. This distributed architecture reduces latency and provides faster response times, thereby improving the customer experience.
Economic efficiency
Economic efficiency is ensured, first of all, by reducing the costs of purchasing and repairing your own equipment, software licensing, as well as the salaries of specialists who provide technical support. An important part of the cost is the need for backup, which again requires both the availability of appropriate equipment and additional resources. In the vast majority of cases
take on all these tasks themselves. Finally, efficiency is greatly increased by automating a number of routine processes, and the cloud somehow makes it possible to schedule many standard procedures, such as backups, compression, or clearing caches, and perform them without human intervention.
Another important factor for e-commerce is the increased flexibility and availability of cloud services. For perhaps ten years now, employees in IT companies have been gradually moving from offices to home, and with the spread of coronavirus, remote work has become widespread. Cloud platforms are initially focused on remote access to the services they provide, so companies practicing remote employment schemes will not have to rebuild when switching to using such platforms.
Security questions
Because the
is closely related to finance and payments, the issue of information security plays a very important role in this area. Cloud platforms provide advanced encryption capabilities that enable e-commerce businesses to protect sensitive data. By using encryption algorithms and secure key management systems, cloud service providers ensure that customer information is protected from unauthorized access or interception. This, by the way, solves the problem of the need to comply with all the requirements of current legislation in terms of processing personal data, secure storage of information and prevention of leaks. In addition, some cloud platforms offer built-in features such as data masking and data tokenization, which further enhance privacy by anonymizing personal information. Solving this problem in a local infrastructure environment is often either not possible or too expensive.
In addition to this, “clouds” offer various identity management tools (Identity and Access Management, IAM) to control user access to e-commerce systems and prevent unauthorized actions. These include multi-factor authentication (MFA), single sign-on (SSO), and the ability to configure group policies for different categories of logged-in users, which allow you to control role-based access and monitor all activity in real time. Most cloud IAM solutions also provide seamless integration with existing identity services and third-party authentication providers, simplifying user management processes while increasing security.
Monitoring and analytics
To ensure the smooth operation of any commercial project, it is very important to organize real-time monitoring of all its components, as well as, if possible, automate the collection and analysis of the received data. Valuable analytics in e-commerce also include data on customer behavior. Sources for collecting analytics information may include not only website metrics and transaction data, but also information obtained from social networks and third-party advertising platforms.
Based on data collection and analysis technologies, as well as using machine learning algorithms and predictive modeling methods, predictive analysis systems are built – another area where cloud technologies are revolutionizing e-commerce. For example, e-commerce companies can use predictive analytics to anticipate customer demand for certain products based on historical sales data, market trends, and external factors such as weather conditions or seasonal events. By accurately predicting fluctuations in demand, an online retailer can optimize inventory management, minimize stockouts, and increase revenue.
In addition, predictive analysis allows you to develop personalized marketing strategies tailored to individual customer preferences and behavior. By analyzing past purchase history, web browsing history, and demographic information, e-commerce platforms can provide targeted recommendations and promotional offers, thereby increasing user conversion and engagement.
A few examples
Any statements look unfounded if they are not supported by clear examples. Of course, the most popular cases are those of large companies that were the first to feel the benefits of introducing cloud technologies into their business and were the first to take practical steps towards such integration.
The most obvious example is, of course, the online store Amazon.com, which relies on the Amazon Web Services infrastructure. AWS offers auto-scaling capabilities that match resources to demand, allowing Amazon.com to seamlessly process millions of concurrent transactions without experiencing downtime or performance issues, even during peak times such as Christmas sales, Black Friday, or ” Cyber Monday.”
Netflix uses cloud tools to analyze user behavior and preferences, providing personalized recommendations. Using services like Amazon Redshift or Google BigQuery, Netflix can quickly process massive amounts of viewer data, allowing it to understand user preferences and serve them videos that suit their tastes. This improves user satisfaction and increases engagement.
Shopify's cloud platform integrates with inventory management tools like TradeGecko or Skubana, allowing merchants to track inventory in real time, automate reorder processes, and sync data across multiple sales channels. This reduces the load on warehouses and minimizes storage costs.
PayPal uses cloud security services such as AWS Security Hub or Azure Security Center to monitor threats and implement encryption protocols. By using cloud-based security solutions, PayPal can protect sensitive customer information and maintain trust in its platform.
Alibaba Group uses cloud infrastructure to support its global e-commerce platform AliExpress, enabling cross-border transactions. With data centers located in different regions, Alibaba Cloud provides low latency and high availability to users around the world. Additionally, cloud-based localization tools allow AliExpress to adapt its platform to multiple languages and currencies, automating platform localization for customers around the world.
eBay uses cloud-based tools to analyze cost patterns and optimize resource utilization. Using cloud-based cost management platforms such as AWS Cost Explorer or Google Cloud Cost Management, eBay can track cloud resource costs in real time, identify savings opportunities, and implement optimization strategies. By using cloud-based cost management solutions, eBay can reduce infrastructure costs while maintaining performance and scalability.
What's stopping you from moving to the cloud?
However, the transition to using cloud platforms for companies that have never used such technologies before is associated with a number of objective difficulties. And the most serious among them is the complexity of integration and migration: many projects use outdated software, which is technologically impossible to transfer to the cloud without suspending all well-functioning business processes. And we are talking not only about online store engines, but also about various project management systems, monitoring employee working hours, bug tracking, accounting and financial accounting. As popular wisdom goes, one move is like two fires, and moving to the cloud is no exception.
Another important aspect is the dependence on cloud service providers. If a project has already been successfully deployed in a cloud, moving the entire infrastructure to another provider often becomes either unreasonably difficult or completely impossible. This aspect must be carefully considered at the planning stage of the project architecture.
Future trends and prospects
One of the most dynamically developing areas today is machine learning and artificial intelligence, and these technologies are actively being implemented in cloud platforms. First of all, we are talking about automating the extraction and analysis of valuable data, and developing on their basis intelligent systems for preventing failures and managing available resources. But this is not the only way artificial intelligence can help e-commerce. Here are other aspects of the use of these technologies in e-commerce based on cloud platforms:
- Personalized Recommendations: AI-powered recommendation engines analyze customer behavior, purchase history, and preferences to provide real-time product recommendations. Cloud platforms provide scalable infrastructure to process massive amounts of data that can be used to generate more accurate offers, thereby increasing customer engagement and driving sales.
- Dynamic pricing. Machine learning algorithms analyze market dynamics, competitor prices, and consumer demand to optimize pricing strategies.
- Chatbots and AI-powered virtual assistants improve customer support by providing instant responses to queries, assisting in product searches, and simplifying transactions. Cloud-based natural language processing (NLP) services allow companies to create conversational interfaces that recognize customer queries.
- Fraud detection. Machine learning algorithms can analyze data, user behavior and historical patterns to detect and prevent fraudulent activity.
Conclusion
significantly simplified access to hardware and software resources, allowing businesses of any size to leverage massive computing power and data storage tools without the need for significant upfront investments in hardware and software infrastructure. And pay-as-you-go pricing models allow entrepreneurs to pay only for the resources actually used, making cloud platforms accessible to organizations of any size. The flexibility and scalability of the cloud makes it possible to process growing volumes of data as your business grows. All of this together opens up opportunities for innovation and new ways to interact with customers in a flexible manner that were previously unavailable to e-commerce businesses.
Serverspace – a cloud service provider that provides rental virtual servers with Linux and Windows OS in 8 data centers: Russia, Belarus, Kazakhstan, the Netherlands, Turkey, USA, Canada and Brazil. To build an IT infrastructure, the provider also offers: creation of networks, gateways, backups, CDN, DNS services, S3 object storage.
By the way, we have already published a series of materials about various tools for e-commerce and commerce: OpenCart, PrestaShop and PHPShop.
The article is supported by the team Serverspace.
Serverspace – a cloud service provider that provides rental virtual servers with Linux and Windows OS in 8 data centers: Russia, Belarus, Kazakhstan, the Netherlands, Turkey, USA, Canada and Brazil. To build an IT infrastructure, the provider also offers: creation of networks, gateways, backups, CDN, DNS services, S3 object storage.
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