Native versus hosted software-as-a-service

Wladimiro Bedin explains the benefits for retailers of choosing native cloud software-as-a-service for their POS solution

By Guest on 14 May 2014
Native versus hosted software-as-a-service

Retailers today are increasingly adopting cloud computing, but there are a range of options to choose from when considering POS solutions. A native cloud POS is designed from the ground up to take advantage of new paradigms, such as multi-tenancy, rapid elasticity and open APIs. A hosted cloud POS is traditional software hosted in a data centre or on a public infrastructure-as-a-service based on thin client or traditional client/server architectures.

But does it really matter about the design of a software-as-a-service solution if the user doesn’t notice any difference? As always, the devil is in the detail as, in the medium to long term, it has an effect on overall quality and cost.

Any software application can be hosted in a data centre and offered on a software-as-a-service basis, but traditional software is usually designed for internal company use and has restricted functionality outside the organisation. Traditional architectures are not well suited for today’s digitally connected world that includes customers, suppliers and service providers.

Only native cloud services are designed for a wider audience (up to thousands of companies and millions of users) and are interoperable for easy and direct inter-company cooperation. In this scenario, high scalability and service level agreements (SLA) are not nice-to-have features, but a must. This calls for a service-oriented architecture based on standard web services and asynchronous messages.

High scalability and SLAs require middleware to connect the base operating system and the application software that automatically handles load balancing, rapid elasticity, hardware failures and software upgrades without any interruption, resulting in a true 24/7 service. Platform-as-a-service (PaaS) offerings are middleware designed for the cloud, but to get real value, application software must be radically redesigned.

As cost is always a primary driving force, scalability and SLAs are not achieved through brute force but through rapid elasticity and sharing the same software and hardware resources among different companies (multi-tenancy). PaaS is ideal for enabling elasticity, as it enables new cloud resources to be added rapidly when sales volumes increase. This resource can then be removed when no longer needed, drastically reducing the average daily cost. Then with multi-tenancy, a single software version with wide parameters can meet the needs of each store. Standardising software means it can be deployed more quickly and updated continuously and at a lower cost.

Finally, cost is important, especially in the current economic environment, but the main benefits of a native cloud POS are its ability to directly engage with customers through any fixed or mobile channel, as well as its integration with the supply chain and the emerging cloud service ecosystem. This both enables new business models and provides competitive advantage.

Wladimiro Bedin is founder and CEO of BEDIN Shop Systems

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