CSA Exclusive: Security, innovation, budget lead retail IT challenges

9/13/2021

Retailers see security as a major IT challenge, but are moving ahead with cloud transformation.

Survey results released exclusively to Chain Store Age reveal four in 10 retailers view data/cyber security as a top IT challenge.

Rackspace Technologies and Google Cloud jointly surveyed 1,420 IT executives in retail, as well as other industry sectors, in July and August 2021. The top IT challenge cited by retail executives polled in the survey was security, followed by the pace of innovation and budget.

Specifically, retail survey respondents said their top IT challenges are:

40% data/cyber security.
34% keeping up with innovation.
31% budget.
26% managing costs.
25% hiring skilled workers (over half said the talent shortage prevents them from driving innovation and from deploying the required IT).

Half of retail respondents say the growth of their business is the factor that most determines the infrastructure of their IT program, followed by security:

49% Business growth
39% Security
37% Customer experience
34% Efficiency
27% Reducing restructuring costs
25% Agility

When asked about the role of the IT department in making business decisions, almost four in 10 (38%) retail respondents said IT executives play a key role in the direction of the company.

Retail in the cloud – a closer look

The survey also asked a number of questions about cloud technology trends. More than half (54%) of retail respondents said all of their data is already in the cloud. The other 46% say they plan to move more into the cloud. More than eight in 10 (83%) agree that cloud services enable greater innovation.

Other cloud-related findings include:

Public cloud expands the range of products and services (64%), improves ease of use/customer service (49%), provides a better customer journey in terms of personalization/preferences (46%), allows entry into new markets/industries (45%), and creates new revenue streams (41%).
Private cloud expands the range of products and services (54%), improves ease of use/customer service (49%), provides a better customer journey in terms of personalization/preferences (42%), allows entry into new markets/industries (36%), and creates new revenue streams (44%).
Half (49%) note a talent shortage is preventing them from driving innovation or deploying the required IT.

Most respondents say they are already enjoying the benefits of a public cloud (67%) and/or a private cloud (72%). In addition, public and private clouds are as much as 40% to 50% of most IT budgets.

When asked what is preventing them from enjoying the benefits of the public and private clouds, most cite security concerns (52%), data privacy (44%), lack of control of management (41%) and compliance regulation (35%).

The Rackspace survey also indicates most retail companies/organizations distribute cloud technology in the following four ways:

31% on an on-site data center.
20% by colocation (hosting IT hardware off site in a data center).
24% managed hosting (support for operating and application infrastructure).
22% hyperscale (massive facilities to support scalable applications).
Current retail cloud workloads are hosted 34% on virtual machines, 30% on serverless/FaaS, and 30% on containers.

Increases in infrastructure spending over the next 12 months will include:

56% on-site data center.
48% managed hosting.
49% on hyperscale (AWS, Google cloud, Microsoft Azure).
31% colocation.

However, 57% of retail respondents envision not owning a data center in the next five years. Furthermore, 57% say containerized applications will increase in the next two years.

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