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Cloud eats the world. On-premise isn’t dead, but must adapt to Composable Commerce


Technology Strategy: Emporix discusses options for Digital Commerce infrastructure - on-premise, public and hybrid cloud.

Over the past decades, information technology has undergone tremendous change. Cloud computing has transformed the way we all work, use software and organize systems. Cloud services by Amazon, Microsoft and Google have contributed significantly to the triumph of cloud in e-commerce and many other industries. Quite a few IT experts conclude that cloud killed on-premise computing, which has long dominated enterprise IT ecosystems.

However, global server shipments have been rising steadily for years, indicating that on-premise computing is still very much alive. It is not dead, but transforming and adapting to composable ecosystems that bring together the individual strengths of on-premise and cloud computing. In this article, we evaluate the benefits and challenges of both concepts, public cloud and on-premise (also referred to as private cloud), and show what role each can play in a future-proof technology strategy for composable digital commerce.

Spoiler: the advantages of one correspond to the disadvantages of the other, so in many cases it can make sense to combine both worlds, public and private cloud, to leverage strengths and balance disadvantages.

On-premise architecture for digital commerce: characteristics, requirements, pros & cons

On-premise software is installed and operated in a company's own network. Product, user and transactional data are stored and managed internally, using the company's own infrastructure and resources. In many companies, on-premise computing still exists as a relic of a bygone era when it was common to run software and data management on your own servers. On-premise today might be useful in some very specific business cases, however in most scenarios cloud services are likely to be the better choice in the long term.

On-premise benefits

  • Authority: full control over your own system and data
  • Accessibility: access to data and software even without Internet

On-premise challenges

  • Scalability: own infrastructure is often too sluggish to adapt quickly and flexibly
  • Development: access only via corporate network and dedicated devices
  • IT-Support: IT staff needed for maintenance and administration
  • Compliance: responsibility for compliance with regulations falls on your company
  • Availability: no system uptime guaranteed, high internal effort, if required.
  • Security: own responsibility and effort to ensure GDPR-compliant data protection

When to go for on-premise architecture

Companies that still rely on on-premise computing mainly do so for two reasons: firstly, because many IT and security managers still believe that their data isn't safe in the public cloud and is best kept on their own network. According to current studies, the opposite is true. Major cloud service providers not only offer a high-performance security architecture, but also a wide range of services that can be added on demand to tailor data security to specific needs. As a result, companies consider cloud services to be a security enabler rather than a security risk.

Another reason for companies to continue using on-premise computing for digital commerce is simple: they have always done it this way and therefore have the structures and resources to run their own IT infrastructures for digital commerce. Here, an outdated on-premise culture could be a barrier to transforming digital commerce ecosystems.

As a provider of a cloud-based composable commerce platform, we see no rational reasons in either the short or long term to host your digital commerce on your own infrastructure. Or do you buy vehicles for your sales and delivery teams and maintain them with your own technicians? For sure not, in almost every case leasing is the better business model. It's the same in digital commerce. Its future is in the cloud, there is no doubt about it.

Cloud architecture for digital commerce: characteristics, requirements, pros & cons

Many companies are shutting down their own server infrastructures in favor of public cloud services. Why maintain and renew servers, bearing costs and risks, when you can get them as a service? Using cloud services, companies can focus on their core business and reduce costs that come with owning IT infrastructure. Cloud services offer not only scalability but also high availability, which makes many digital commerce managers sleep better at night.

Cloud benefits

  • Scalability: flexibly adapt storage and systems to changing requirements
  • Availability: system uptime guaranteed by most cloud service providers
  • Maintenance: updates and new software releases provided automatically
  • Development: teams can connect from anywhere using any device
  • Cost: no running costs for own server infrastructure and administration
  • Contracting: usage-based and flexible pricing models with short contract terms
  • Decentralization: maintenance and development by decentralized teams worldwide

Cloud challenges

  • Vendor lock-in: cloud providers determine the scope, updates and cost of services
  • Cost fluctuations: consumption model can inflate spending if not capped

When to go for cloud architecture

As providers of a cloud-based composable platform for digital commerce, we are biased, no doubt. We believe that only cloud services provide the scalability, compatibility and availability that adaptive digital commerce ecosystems need to grow with new trends and requirements. If the number of visitors to your online store explodes, more capacity is required quickly to remain available online. If new sales channels are constantly being added to your digital commerce, your static on-premise infrastructure will probably reach its limits. If the future is volatile, your digital commerce architecture should be able to adapt flexibly.

Combining multiple public cloud services into multi-cloud

Sometimes it can be useful for companies not to rely on one cloud provider, but to combine different services to optimize costs, security and performance as needed. Using multiple services may increase the complexity of your ecosystem, but reduces the risk of vendor lock-in due to dependence on a single provider. In this respect, multi-cloud reflects the principles of composable commerce, where the strengths of different system components and services are combined to add the highest possible value to your business.

Hybrid cloud architecture for digital commerce: combining the best of two worlds

Hybrid infrastructures, integrating public and private cloud, combine the best of both worlds and help neutralize downsides. One key advantage of hybrid cloud is agility: managing technology to flexibly support business initiatives for competitive advantage. Hybrid clouds are perfect for scaling up and down as needed without compromising security and controllability of private cloud components, using on-demand resources in the public cloud.

When to go for hybrid cloud architecture

Simply put, hybrid cloud architecture can be a reasonable approach for businesses where both, flexible adaptability to new requirements and maximum security of customer and transaction data, are critical to digital commerce. However, in most cases, we see hybrid cloud architecture more as an intermediate stage within an iterative transformation process, for example, when companies aim to gradually transition their on-premise architecture to the public cloud.

Conclusion: Composable commerce requires composable infrastructure

No matter if companies choose cloud or on-premise as the basis for their digital commerce ecosystems, it is critical that both, platform and technology, can be adapted flexibly and quickly to new business requirements. Monolithic infrastructures reach their limits in fast-moving markets, as do monolithic digital commerce platforms. We are convinced that the future of digital commerce is composable. Systems and components will be selected and assembled according to best-of-breed principles, based on what adds the highest value, not because it has always been done that way. It's worth rethinking infrastructure strategically.

To find out more about how Composable E-Commerce can help grow your business, get in touch with Emporix today by clicking here.