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How Brick and Mortar Enterprises Will Use Cloud Computing to Survive and Thrive

Locusts, floods, and droughts used to periodically shut down business. Farmers – the bulk of the pre-industrial economy – had no shelter.

Today COVID-19 shuts down business, but cloud computing gives shelter. Cloud Service Providers (CSPs) help us survive via eCommerce, telecommuting and, of course, streaming entertainment. More strategically, they help companies improve efficiency, adjust to market changes, and create business models that blend the physical and virtual. As a micro example, my wife moved her Yoga Next Door business online this spring, and, much to our surprise, she expanded her customer base. Her new business model is a mix of in-person and virtual instruction (recorded or live), based on student preferences.

Enterprises in face-to-face businesses like retail, hospitality, and healthcare must take a similar approach, embracing cloud Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), to reinvent themselves digitally. Leading enterprises in these sectors will accelerate their migration to IaaS platforms such as databases, data warehouses, and data lakes in order to reduce capital expenditure, gain operational flexibility and run advanced analytics on large and varied data sets. They will use PaaS to develop, deploy, and manage custom applications, and they will shift to cloud-hosted SaaS software for off-the-shelf needs.

New Digital Models

Here is an optimistic take on how leading firms in retail, hospitality, and healthcare will strengthen their businesses in the coming months and years with offerings from AWS, Azure, and Google. Each has the opportunity to digitize and virtualize interactions, reducing its exposure to the physical limitations of a COVID-19 world.

Retail. Retailers will customize shoppers’ online experience by using CSPs’ prepared algorithms and automated tools to build, train, and deploy machine learning models that predict changing consumer behavior. Their supply chain managers will anticipate and prevent bottlenecks by tracking inventory through cloud-based IoT platforms. Retail IT teams also will continue to move functions like finance and accounting to SaaS applications for efficiency.

Hospitality. Like retailers, hospitality providers such as restaurant chains must place a premium value on their customers’ digital experiences. PaaS analytics tools will enable them to assess customer preferences, for example by studying survey data about local attitudes toward masks and social distancing. In addition, they will use myriad SaaS offerings to create virtual restaurant tours, menus, and indoor/outdoor seating charts that enrich the reservations and takeout ordering process.

Healthcare. Hospitals and other healthcare providers must collect, record, and disseminate new patient health indicators to contribute to public health services such as the Centers for Disease Control. They also must measure the effectiveness of COVID-19 treatment and safety measures, as well as the full experience and outcomes of COVID-19 patients. Automated PaaS analytics tools will help them deploy and maintain such measures with limited development work. They can use SaaS applications, meanwhile, to support telehealth and patient portals, and back-office operations.

Reinvention on Cloud Platforms

Implications for Data Analytics Teams

So how can data and analytics teams in these industries navigate the transition? Successful cloud strategies will share three common attributes.

Convergence of physical and digital domains. The leaders will digitize all critical aspects of the physical customer experience. Smart sensors will recognize the phones of existing customers (those that opt-in) upon their entry into a store, text them onsite offers and coach attendants on their preferences. Data analytics teams will model hospitals and other physical environments with digital twins - virtual replicas of physical things - to control patient traffic flow for efficiency and safety.                                             

Diverse and open datasets. Enterprises need recent data, and lots of it, to understand their customers’ fast-changing preferences. Leading retail, hospitality, and healthcare providers will embrace new sources of insights, including unstructured text from sources such as social media platforms. They also will tap, use, and share open datasets to address public health concerns related to COVID-19.

Multiple clouds. The winners will hire a second CSP to gain negotiating leverage, exploit price differences, and in some cases satisfy rigorous SLAs based on regional differences. As they learn and pursue more advanced use cases, data analytics teams will shop among multiple CSPs to select just the right data science toolset. They will migrate workloads when requirements or CSP capabilities change.

When the pendulum stops swinging between lockdown and business as usual, we should expect it to settle into a new balance. We might go to the office half time, buy only certain products in a store, and satisfy our craving for the big screen with drive in movie theaters. The leaders in retail, hospitality, and healthcare will try to strike the right balance of the physical and virtual -  and use cloud computing to capitalize on it.

Kevin Petrie

Kevin is the VP of Research at BARC US, where he writes and speaks about the intersection of AI, analytics, and data management. For nearly three decades Kevin has deciphered...

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