Retail’s journey to the cloud with Microsoft Azure

We ask Michael Schulte of Diebold Nixdorf about the role of the cloud in retail and key criteria for transition

Elly Yates-Roberts
By Elly Yates-Roberts on 16 August 2022
Retail’s journey to the cloud with Microsoft Azure

Diebold Nixdorf launched its Vynamic Retail Platform, a modular solution based on microservices, a cloud-native architecture and an appplication programming interface-first approach, in March 2022.  

Hosted on Microsoft Azure, the Vynamic Retail Platform is highly scalable and adaptable, as well as channel and touchpoint independent. As the cloud becomes integral to the operations of retailers, Michael Schulte, vice president of retail software product management at Diebold Nixdorf, discusses how brands can best use the technology to exceed customer experiences and drive business success.  

Where do you see the biggest growth opportunities for retailers as part of their digital transformation? 
While the customer experience may mean different things to different retail segments, one thing is true for all retailers: today’s customers seek relevance, convenience and instant fulfilment of their needs. That’s why we see the store expanding both in role and responsibility, with online retail quickly becoming part of the core processes. This puts high demands on streamlining and improving omnichannel customer journeys – such as growing the efficiency of order fulfilment processes and the effectiveness of personalised loyalty campaigns. Integrating different channels and touchpoints has always been important, but now it is essential to solving the puzzle. 

What is your take on cloud-native vs ‘cloudified’ software solutions? 
Traditional software applications were often built as standalone, siloed solutions. However, cloud computing has raised the bar. Security, scalability, performance, deployment, upgradability and openness to use point-of-sale software in a wider technology ecosystem are now incredibly important functionalities.   

However, they impact the core design of a software solution’s architecture and cannot be easily met by simply ‘cloudifying’ your legacy software solutions. If you want to reap the full benefits of cloud computing and cloud-centric software, the solution is a cloud-native software, that is built from scratch and leverages open cloud standards.  

What does the cloud architecture for a store of the future look like? 
The store-of-the-future will have a broader role compared to the traditional store we see today. It will be viewed as an asset that contributes to the omnichannel customer experience and online-to-offline journey execution.  

Continuous readiness to innovate requires native support for flexibility and openness, so retailers can rapidly expand and adjust customer and staff journeys. From a software design perspective, this can be realised through highly modular software architecture based on microservices and an API-first design approach. 

And to complete the picture: the execution of some journeys requires a cloud set-up combined with offline enablement. That means cloud-native software should also support hybrid deployment models involving edge devices, so that the software can either run 100 per cent in the cloud, 100 per cent in the store, or in a hybrid configuration. 

What key criteria should retailers consider when migrating to the cloud? 
I have already emphasised the importance of flexibility, openness and continuous evolution of journeys. It is also important that retailers are touchpoint- and channel-agnostic to allow service reuse as much as possible. In addition to this, brands should strive to simplify their IT infrastructure while ensuring scalability, reliability and more efficient maintenance, by using cloud network-based centralisation and software operations. Last but not least, I would definitely recommend including network topology flexibility – in other words, native offline operations support and cloud-enabled centralisation – as evaluation criterion.  

Retailers should also evaluate how they want to use their cloud solutions. This is directly related to operational efficiency. Do they want to manage and maintain these themselves, or would they prefer to pay for what they use by adopting an as-a-service model, thereby relying on the experience of specialised cloud teams and proven cloud infrastructures? 

What are the risks and rewards of moving retail operations to the cloud? 
Application availability and data security are often seen as risks, while speed of innovation, scalability, reduced IT costs and more effective collaboration are mentioned as benefits. The risks can be mitigated by working with reliable technology providers who offer an end-to-end cloud solution and use proven technologies.  

There are a few criteria to consider to ensure businesses choose the provider that is right for them. First, does it have established data and network security policies in accordance with data privacy laws and the latest certification and standards? Second, does it provide round-the-clock monitoring of the cloud environment to solve most issues before they occur? Third, can it offer near-real-time disaster recovery capabilities with fallback data centres in different geographic locations?  

It is also important that your cloud migration partner provides a 24/7, accessible, multilingual helpdesk, has experienced technical staff around the globe to solve issues, and offers highly elastic scaling and load balancing services so that you do not need to worry about performance or data availability. 

By considering all this, retailers can expect the best from their cloud journeys. 

This article was originally published in the Summer 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.

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