How Cloud Native Transforms Digital Commerce

In the last decade, organizations have been focused on digital transformation and moving their systems to the cloud. However, these legacy systems weren’t initially built for the cloud, causing them to lack the speed and agility of cloud-native platforms — solutions designed specifically for the cloud, in the cloud.

Despite benefiting from cloud features like scalability, businesses on legacy systems miss the full potential of the cloud. This has prompted a shift towards cloud-native platforms offering greater agility and scalability to power a truly digital business.

The Changing Retail Environment

According to Salesforce’s State of the Connected Customer research, 80% of customers consider a company’s experience equally important to its offerings. The report also reveals that 57% of customers have stopped leveraging the services of a company because of a superior experience provided by a competitor. A sluggish and outdated digital commerce journey is unacceptable in today’s landscape, where consumers expect on-demand access.

A study by global management consulting firm McKinsey & Company indicated that almost 71% of consumers now expect businesses to deliver personalized interactions and that personalization helps drive repeat engagement, increasing customer lifetime value and loyalty. To thrive, businesses must constantly innovate and update to cater to the dynamic demands of today’s consumers.

Cloud-native platforms have become the preferred choice for new business projects. It enables digital commerce enterprises and retailers to be creative and test new ideas. Whether it’s enabling a digital commerce strategy; adding multiple payment options for a seamless checkout experience; gauging interest in digital currencies; or testing digital storefronts in the Metaverse.

Since a cloud-native approach accelerates development capabilities, enables data-driven customer insights, and improves speed-to-market, businesses can quickly introduce new digital commerce offerings to stay ahead of evolving retail trends. In fact, Gartner predicts that around 95% of new digital initiatives will be cloud-native by 2025.

Building and deploying applications in the cloud-native infrastructure will allow retailers to meet modern user expectations and create interactive experiences. This, in turn, will boost sales and customer return rates. Cloud-native infrastructure accelerates application development through user-friendly tools and automated scaling. This efficiency allows developers to focus on enhancing products and continually improving the customer journey.

An Overview of the Cloud Native Approach

Even though many businesses have just started their cloud-native journeys, it’s already become one of the biggest trends in the industry.

A study by Precedence Research indicates that the valuation of the global cloud computing market is predicted to reach a staggering $1.6 trillion by 2030. To keep up with the rising demand for cloud services, 2021 witnessed a remarkable 67% surge in developers using Kubernetes compared to 2020, with a total of 6.8 million cloud-native developers globally.

Before delving into the rapid proliferation of cloud-native technologies and initiatives, let’s start with some basic definitions.

What is Cloud Native?

While there is no single, universally standardized explanation of “cloud native,” its essence and practical usage lie in this interpretation:

“Cloud-native is about the optimization of applications and their environments to reap the maximum benefits of the core characteristics of cloud computing to achieve digital transformation and other business goals.”

Cloud-native technologies empower businesses to develop and run scalable applications seamlessly in modern, dynamic environments such as public, private, and hybrid clouds.

Applications built to run feasibly on cloud environments:

• Are designed for and deployed onto distributed computing resources, strategically capitalizing on economies of scale.
• Demonstrate elasticity, dynamically adapting to changes in workloads.
• Emerge as effortlessly deployable and manageable on demand, given the management of underlying platforms and infrastructure has been abstracted away.
• Exhibit resilience in times of failure.

Why Cloud Native Matters?

The cloud-native architecture leverages several individual components, including containerization and microservices, because it’s considered essential for digital commerce businesses seeking flexibility, agility, and time and resource optimization.

However, the shift to cloud-native is more than a mere infrastructure change; it’s a profound shift in mindset. This transformative approach positions the cloud at the forefront of every decision a business makes in their operations and processes.

Here’s how cloud-native architectures can drive transformation within your digital commerce efforts.

1. High Agility & Scalability

As organizational processes grow more complex, many struggle to stay aligned with dynamic market conditions, digital transformation, and rising customer expectations. These factors make agility one of the top business priorities of today.

Cloud-native architectures comprise loosely connected microservices that communicate with each other to build the application’s core. This independence facilitates rapid alterations to individual components without disrupting the system, fostering a highly nimble and flexible infrastructure.

Adopting a cloud-native approach becomes essential for achieving optimal agility, primarily due to its capacity to scale up or down on demand. When an application needs to scale, additional containers can be automatically deployed. On the other hand, when the traffic experiences a significant drop, containers can be de-provisioned to conserve resources and costs efficiently.

2. Optimized Customer Experience

The increased agility and scalability are beneficial for businesses and extend to their customers. Within a cloud-native ecosystem, users reap the benefits of faster fixes, introduction of new features, and heightened responsiveness to their needs. Service disruptions are minimized as a single malfunctioning microservice doesn’t disrupt the entire application. A new replacement can seamlessly carry the load in real time, ensuring customers experience the expected high availability.

For optimized customer experiences, DevOps teams can further leverage best practices in change management within cloud-native architecture facilitated by Continuous Integration/Continuous Delivery (CI/CD).

• Continuous Integration (CI) involves developers merging code changes into a central repository, enabling automated testing and builds on the code.
• Continuous Delivery (CD) automates code changes throughout the development cycle, including the production and deployment stages.

When adopted together, CI and CD processes allow developers to quickly identify and rectify issues while enabling the faster release of new features. Cloud-native’s alignment with automation empowers DevOps teams to focus on innovation, creating new products and updates that captivate users.

3. Time & Cost Reduction

A pivotal aspect of cloud-native architecture lies in the modular nature of containers and microservices, functioning as building blocks that can be repurposed across various applications. This functionality enables developers to access components used on previous projects and reuse them for new application development, thereby minimizing the overall expenses associated with building and deploying new components.

This leads to substantial cost savings and time efficiency, allowing companies to focus on more complex tasks. For example, this approach simplifies the testing phase since vetted microservices necessitate less rigorous testing than entirely new ones, streamlining the development pipeline.

One success story of shifting to a cloud-native approach is ecommerce services provider PenguinPickUp which reduced 75% delivery costs and now processes over 1.5 million packages to more than 20 locations annually.

Learn how we helped PenguinPickUp reinvent themselves through technology consulting, cloud platform development, and managed support solutions.

4. Sustainability

Going cloud-native can also help companies and organizations become more sustainable and reduce their carbon footprint. A significant element in cloud-native applications is that businesses only use the resources they need compared to on-premises data centers where servers are not fully utilized. This means that the lean characteristic of cloud-native architectures aligns with optimizing an organization’s energy consumption. In fact, a report by Accenture indicates that migrating to the public cloud can reduce CO2 emissions by 59 million tons per year.

To know more about migrating your applications to the cloud, read our latest article: The 6-Step Process to Migrating Legacy Applications to the Cloud Faster

In any case, sustainability isn’t just an additional bonus after a shift to cloud-native approaches; instead, new applications should be designed by keeping sustainability at the forefront. According to a 2021 report from CloudBolt Software, nearly 68% of surveyed IT leaders indicated that a cloud provider’s sustainability measures are a crucial element in forging business relationships.

For instance, transitioning to a cloud-native architecture also enabled PenguinPickUp to reduce its carbon footprint by 63%. Similarly, businesses can adopt green software engineering principles to make their applications more sustainable. They can also leverage carbon footprint tools to track their cloud utilization accurately. For maximum energy conservation, cloud-native architects must meticulously observe and measure energy usage to identify areas for enhanced efficiency.

Next Steps

As you begin or advance on your cloud-native journey, consider these four questions to gauge your organization’s position within the context of the core competencies we’ve explored:

1. Is your scope comprehensive enough?
2. Do your engineers have the capacity to connect the dots between infrastructure changes, application deployments, and end-user experience?
3. Is your team well-versed in the strategies required to elevate the agility and scalability of the systems, ensuring they align with the cloud-native principles?
4. Do you have a clear set of objectives to achieve the next level of cloud maturity?

Shifting to a new IT paradigm built on cloud-native services demands a crystal-clear trajectory for your business. Start by establishing a vision that encapsulates your brand’s core, then translate this vision into a set of services that will build your new enterprise “platform.” These are the services that should be under your ownership and nurtured within your Enterprise Services layer — they serve as your competitive differentiators in the marketplace.

You can distinguish these standout services from other platform components you could acquire from partners, freeing up resources to focus on what makes your business stand out. Finally, as you transition to cloud-native services, set feasible milestones and inspiring goals to build confidence within the organization.

Moreover, replacing legacy applications might be beneficial as many businesses find them difficult to scale and perform at a high level as they often rely on slow and inflexible relational databases. By transitioning to a cloud service backed by a fast NoSQL database, you can seamlessly scale to accommodate hundreds of thousands of concurrent sessions with minimal latency. Using reusable microservices, your teams can quickly build applications that support all sales channels, propelling your retail evolution.

Choosing the Right Cloud Partner

What should you look for? Choose a provider with an expansive range of tools, enabling your developers to realize any business vision. Look for in-depth expertise in innovation, so you can capitalize on their experience and avoid repeating legacy architecture mistakes in the cloud. Additionally, consider maintaining a partnership with a single provider, so you can reap the benefits of all of their managed services and maximize your purchasing power.

Working with a partner like TechBlocks will make everything easier no matter what application you’re moving. We’ll handle the migration process for you, keeping downtime to a minimum and ensuring high productivity. Our team will also provide ongoing management services, ensuring you get the most value from your cloud investment.

As an organization specializing in cloud-native engineering services and cloud-first consulting, TechBlocks helps digital commerce businesses accelerate cloud migration and optimize this ecosystem to fit their unique goals and data needs.

The Bottom Line

Cloud-native practices can undoubtedly revolutionize a digital commerce business, improving scalability, time, and cost efficiencies, while maintaining sustainability standards. However, the cloud holds even greater potential, bringing about a transformative shift in a team’s operational approach — one rooted in innovation, adaptability, and embracing continuous change.

Discover how TechBlocks can guide your business towards a successful digital transformation, harnessing the power of the cloud.

Originally published at https://tblocks.com on August 28, 2023.