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Retail and Hospitality


Public cloud computing in retail

Rebecca Lambert looks at the facts behind the fiction of public cloud computing and explores the impact it is having on the retail industry

It’s now over one year on since Microsoft launched its cloud computing environment branded the Windows Azure Platform, marking the companies first major shift in corporate strategy since embracing the internet back in 1995. Today, with more than 70 per cent of its business now focused on innovation in the cloud, Microsoft is firmly committed to cloud computing and is keen to show its customers the profound benefits that can be realised by embracing this new computing model.

As defined by the Association for Retail Technology Standards (ARTS) in its Cloud Computing for Retail Technical Report version 1.0: “Cloud computing is an emerging computing model by which massively scalable IT-enabled computing capabilities and resources (servers, storage, networks, applications and services) are delivered as a service to external consumers using Internet technologies.” This definition of the cloud holds true for both public and private cloud implementations. In this article we will focus on public cloud. A future article will cover the option of delivering cloud computing via private resources.

In general terms, the IT infrastructure within a public cloud is owned and managed by an organisation selling cloud services and is made available to the general public or a large industry group. In this model, computing capabilities and services such as standardised business processes, applications, and/or infrastructure services are accessed by multiple subscribing clients on a flexible pay-per-use basis in a secure data centre environment owned by the services provider. Microsoft’s cloud services offering essentially spans three categories: infrastructure as a service (IaaS) – to provide on-demand computing and storage to host, scale and manage applications and services; platform as a service (PaaS) – Windows Azure as the operating system and application platform in the cloud, SQL Azure as cloud database services, and Windows Azure AppFabric that provides connectivity, security services and federated identity for applications; and Microsoft Online Services as the software as a service (SaaS) offering, which provides on-demand applications and hosted services such as productivity, collaboration and management of desktops. Each of these services is offered via the public cloud computing model.

Today, an IaaS offering – also known as on-demand data centres – is generally used as a development and testing environment by those who don’t want to make long-term investments in the hardware they would normally need to support their operations. Providing compute power, memory, and storage, typically priced per hour, based on resource consumption, customers only pay for what they use while getting all the capacity they need. One of the biggest advantages of IaaS is that it offers a cloud-based data centre without requiring you to install new equipment or to wait for the hardware procurement process.

Cloud computing is a great way of ‘taking the strain’ with services – particularly with peaks that will no doubt be experienced after an app launch

Nick Lansley, Tesco
Retailers moving to the cloud largely choose a PaaS offering, where the underlying hardware, operating environment, middleware, networking and related platform are abstracted from the applications they use. Here, the focus is on creating the application functionality rather than managing and garnering experience in the underlying infrastructure. You rely on your cloud vendor to provide the platform on which you build and deploy applications. Expanding retail solutions into cloud-based offerings requires vendors and customers to build highly scalable, reliable services that can be used simultaneously by any number of users and devices – globally. To pursue this approach independently would require that you build your own infrastructure to host and manage solutions, develop a software paradigm and invest in the hardware and software to handle internet-scale traffic and demand. Just as the Windows operating system (OS) allows ISVs, customers and developers to focus on building value-added, on-premise applications instead of building OS-specific features, components and drivers, Windows Azure Platform enables the same foundation for cloud applications.

An effective implementation does not have to immediately make use of all of the characteristics of cloud computing. Vic Miles, retail technology strategist at Microsoft points out: “In contrast to an on-premise architecture that must be scaled for the largest possible usage, an initial cloud implementation might be sized for an existing set of consumers. Scalability is the single biggest benefit of cloud computing. It allows a retailer to start small yet have the capability to scale to the superset of potential consumers that the retail organisation aspires to.” This flexibility to be able to deploy (and possibly change over time) different services without a major upfront investment in the system is essential for harnessing the new opportunities offered by the cloud.”

Tesco API in the cloud

Made infamous through Nick Lansley’s Technology For blog,’s R&D department is one of the more well-known retail organisations to have turned to the Windows Azure Platform in recent years. Back in 2008, the UK-based supermarket chain revealed its view of the future of online grocery shopping by unveiling the Grocery API (application programming interface) for its shopping service. Lansley, head of R&D at, showed off the company’s latest development project at Microsoft’s Professional Developer Conference (PDC) in Los Angeles that year with the Tesco@Home prototype application designed using the API to make shopping for a large household quicker and more convenient. The API, which gives developers access to the supermarket’s entire product catalogue and allows them to develop applications to enhance the online shopping experience, received attention all over the world. In March 2009, Lansley announced to developers that the API, which until then was hosted on a single server, had been redeployed in a beta version of Microsoft Windows Azure. “I’m delighted to say that the Tesco API is now running in Microsoft’s Azure cloud computing service and it seems to be working just fine,” said Lansley in his blog. “This means that I can scale the service beyond my single server on which the API was hosted until now.”

Over the next year, Lansley kept the developers up to date on the ongoing developments being made to the API, and in March 2010 one particular blog post came up with some impressive figures about the benefits gained from moving the API to the Microsoft cloud platform. “The API has been created as an ASP.NET application – perfect for being hosted within the new production Windows Azure cloud computing platform. An early version was running in an equally early version of Azure during 2009, so the design takes account of operation within the cloud. It’s also been upgraded recently to work in .NET Framework 4.0 and ongoing developments use the Visual Studio 2010 development environment, so it’s 95 per cent cloud-ready right now. Tomorrow it’s a case of adjusting the API source code to work fully within Azure’s development fabric, then upload it to the Azure cloud for some stiff weekend performance testing.”

As succinctly summarised by Lansley: “Cloud computing is a great way of ‘taking the strain’ with services – particularly with peaks that will no doubt be experienced after an app launch.”

An advanced PaaS such as the Windows Azure Platform allows technology partners and customers like Tesco to take advantage of a wide range of complex system tasks including instant scalability, load balancing, fault tolerance, disaster recovery and software upgrades without any service interruption. These capabilities are critical to bringing cloud computing to the core of the retail revenue engine – in-store systems.

Bedin Shop Systems develops cloud POS

Microsoft partner Bedin Shop Systems brings another example to the table of the capabilities the Windows Azure platform is opening up to the retail world. In July 2010, the Italian technology developer caused a stir at Microsoft’s Worldwide Partner Conference when it showcased its POS and in-store solution built on Windows Azure. Seeing a gap in the market to provide a POS solution that offers system performance without compromising on data centralisation, the Italian partner created aKite, which can be rapidly deployed and accessed from anywhere in the world through an Internet connection. Since its release, the Windows Azure-based aKite software services suite has gained significant customer acceptance. In February this year at the Euroshop Retail Design Conference in Dusseldorf, Germany, the company announced three new customers – Italian retailers Bricocenter, Bruel and luxury brand Jennifer Tattanelli – that are using the solution to optimise their operations.

Bedin Shop Systems smart clients are light internet-centric desktop applications deployed from a Web page and automatically updated from Retail Web Services, the intelligent ‘hub in the cloud’ designed as a service-oriented architecture for straightforward cooperation inside and outside a retail store chain. is the front-store smart client that allows connected and disconnected operations. Meanwhile, the back-store solution includes stock and suppliers management applications delivered via the cloud. In this way, Bedin is able to quickly deploy a full-store system from the cloud that supports disconnected sales at the POS.

“Rapid customer acceptance of Bedin aKite solutions for retailers provides an excellent example of Microsoft cloud momentum in the retail industry,” says Simon Witts, corporate vice president of the Enterprise and Partner Group at Microsoft. “Through alliances with retail solutions vendors such as Bedin, we are creating a new and transformative paradigm for IT and business through Windows Azure.”

One of the interesting capabilities of the Bedin solution is the aKite Document Interchange, a software service based on the Windows Azure AppFabric Service Bus that simplifies integration with legacy enterprise resource planning systems. The solution uses the Service Bus capabilities to connect to on-premises assets in a secure manner without having to open the on-premises firewall.

Office 365

Finally, Microsoft’s Online Services – its SaaS offer – presents another option for companies looking to take advantage of a public cloud computing model. Currently in beta, Office 365, which brings together Exchange Online, SharePoint Online, Lync Online as well as Microsoft Office desktop software and Web apps, is Microsoft’s cloud version of its trusted communications and collaboration software. Providing companies robust security, reliability and user productivity on a pay-as-you-go basis, Office 365 is already proving popular with large retailers looking to help their employees work together more easily from anywhere on virtually any device, while collaborating with others inside and outside their organisation. Joining the growing roster of Office 365 customers include industry leaders such as Coca-Cola Enterprises, McDonald’s and Starbucks.

Announcing the new cloud productivity service in October last year, Kurt DelBene, president of the Office Division at Microsoft, said: “Office 365 is the best of everything we know about productivity, all in a single cloud service. With Office 365, your local bakery can get enterprise-calibre software and services for the first time, while a multinational pharmaceutical company can reduce costs and more easily stay current with the latest innovations. People can focus on their business, while we and our partners take care of the technology.”

The software industry has been through major changes – from mainframe computing, to desktops, to the web – and now we are standing at the next phase of innovation. Cloud computing is fast becoming a transformational force in the delivery and consumption of IT services, software and applications, whether used in a public, private or hybrid environment. As momentum around each of these different cloud scenarios continues to build as retailers realise increased business agility at lower cost, we will see more business plans integrate a cloud computing strategy. Microsoft has already done this and has made a strong commitment to cloud computing to help retailers connect with consumers whenever and wherever they choose.

This feature first appeared in the Spring 2011 issue of Speak. To read the feature in full, check out the digital edition . For more on Microsoft and partners in the retail, hospitality and consumer industries, subscribe to Speak or to get involved, visit the partner zone.

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