Cloud Computing for Wholesale Distributors: You Don’t Need to be a Meteorologist!

Blog | March 26, 2012 by SAP News

Cumulus, Stratus, Cirrus, Nimbus, Private, Public:  The options are vast and the jargon is confusing.

As Joni Mitchell so eloquently put it:

I’ve looked at clouds from both sides now,
From up and down, and still somehow
It’s cloud illusions I recall.
I really don’t know clouds at all.
Sound like something you can relate to?

Figure 1

Let’s take a moment and talk about cloud computing; what it is, and how it can help your company be more nimble, efficient and profitable. First of all:  As the folks from Google will tell you, the cloud is quite simple (see Figure 1).

Seriously; Cumulus, Stratus, Cirrus, Nimbus:  Let’s leave those up to the meteorologists of the world.  Private and public clouds are something you and your IT team should take some time to understand.  So, let’s dive in and take a page from Joni Mitchell’s songbook and look at clouds from both sides now. It appears as if this young woman is uploading her files to a Cumulus cloud.

Public Cloud
In a public cloud, a service provider makes resources, such as applications and storage available to the general public over the Internet.  The idea behind it is to separate the infrastructure (hardware, software) from the actual service – data storage, e-mail, etc.  The internet becomes the delivery channel.  The individual users don’t know if the server they are “pinging” through their browser is in Baltimore or Bangladesh.  And, they don’t care so long as their transactions are processed in the blink of an eye.  The public cloud provider is able to be extremely flexible.  They can scale to meet the increased demands as additional users log on and start accessing data or performing transactions because they can level off the “load” on a multitude of servers.

Many of us are using a public cloud.  Think Gmail or Hotmail, both of which are free to anyone, anywhere.  That said, many public cloud services are offered on a pay-per-usage model, or subscription model.  These pay for service solutions are typically feature/function rich, and used to conduct enterprise business transactions.

Private Cloud
Private clouds are much simpler to describe (see Figure 1).  Seriously, folks, a private cloud is an infrastructure operated solely for a single organization, typically managed by a third-party and hosted externally.  The idea is that you get all the scalability and time-to-market benefits of a public cloud service without ceding control and security.  In other words, your organization and only your organization, is conducting business transactions in a private cloud.

So, now that we understand the basics of public and private clouds, your next question might be:  Why should I care?

  • Are your margins slim?  (I’m betting they are.)  Then, the cloud can be a creative way for you to create efficiencies, cut costs and increase profitability without sacrificing customer service.
  • Is your IT hardware spend getting out of control?  The cloud is one way to control, or potentially eliminate costs as your service provider is footing the bill for the technology infrastructure.
  • Are your customers and suppliers asking for more than you can deliver with your existing solutions?  The host of applications offered on the cloud can enhance your legacy systems by enabling you to quickly and cost effectively implement new solutions that will help you collaborate better with your suppliers, and enhance service to your customers.
  • Is the belt tightening on your overall IT budget?  Then, cloud solutions are worth exploring as most service providers offer a pay-as-you-go model, so you only pay for those services your consume.  Some offer a subscription model, so you pay a monthly, fixed fee based on the number of users actively using the cloud solution.

Granted, cloud based solutions might not be for everyone, but they’re certainly worth taking the time to explore.  Benefits such as cost reduction, increased customer service levels, and improved collaboration with all of your trading partners could prove to be significant.

So, the next time you gaze in to the sky, I’m betting you’ll look at those clouds in a slightly different way.

SAP offers a variety of cloud (on-demand) solutions to fit the needs of wholesale distributors.  From our full suite of integrated business application solutions in SAP Business ByDesign to line-of-business solutions for sales, human resources, and more.

Click here to learn more about cloud solutions from SAP.

Karen S. Lynch is the vice president of the Global Wholesale Distribution Industry Business Unit at SAP.

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