Cloud Computing

When children’s apparel retailer Peek…Aren’t You Curious hit the scene in 2007, company executives knew the company needed scalable information technology to gain traction in the industry and keep operating costs low. The San Francisco-based company found an ideal solution by deploying cloud computing, which allowed it to use virtualization to streamline computing power.

“We knew the value of technology to our operation, but we also wanted to spend our funds wisely,” said Bob Graham, CIO, Peek…Aren’t You Curious, in a presentation at the 2009 RetailConnections Executive Summit, in Aventura, Fla.

That’s why cloud computing became a top priority. Cloud computing is an Internet-based configuration that uses servers and data-storage systems in distant locations. A Web-based connection, called the “cloud,” keeps retailers linked to the virtual hardware, which is hosted by a third party.

For Peek…Aren’t You Curious, which has currently has eight stores, it was imperative to be a multichannel retailer with a single IT infrastructure “that could support all channels and was scalable,” Graham said. “By starting with a common infrastructure and single source of data now, we won’t have to rip and replace systems later as we grow,” he added.

The growing chain seamlessly connects to the cloud via a DSL network from AT&T, New York City. Within this distributed computing model, the retailer is running many mission-critical applications through Software-as-a-Service agreements, which are similar to leasing agreements. Peek…Aren’t You Curious signed on-demand contracts with vendors, which host the applications on their Web servers and deliver the application through the cloud. Once the contract expires or is not renewed, the retailer loses access to the solution.

The company’s digital receipts and post-sale point-of-sale transaction management operations, for example, are managed by Afterbot, Norcross, Ga. Peek…Aren’t You Curious pays an annual fee and then a renewable fee based on transaction volume. Its workforce management system also works on a SaaS model.

“As we add sales people, we just increase the number of licenses,” Graham explained.

Besides being a cost-effective infrastructure option, some describe cloud technology as the next wave of computing.

“The whole country is over-computed,” Graham said. “Wherever we can take advantage of shared services at a lower cost, and at the same or higher service level, that is a clear benefit for us.”

Not all retailers, however, are convinced of the promise of cloud computing. Some claim that services may not be fully reliable, or applications may not be available if service is interrupted. Others are gun-shy about making the transition, as a third-party partner would manage their private data. But once chains get past their protective natures and no longer require that mission-critical data exist only in-house, more may make the move.

“We are proving that the old computing model doesn’t work anymore,” Graham said.

Besides requiring a reliable, costly in-house infrastructure and network that can handle hundreds of projects, chains also need an IT army to manage a traditional computing model, according to Graham.

Cloud computing and SaaS applications keep a lid on the retailer’s labor costs. Unlike its competitors, Peek…Aren’t You Curious does not need a staff of database administrators to monitor the infrastructure 24/7, “which could cause other IT operations to suffer,” Graham said.

“We hand this responsibility to our third-party partners who are more efficient and experts at managing these solutions,” he added.