Are Microservices the Answer To Cloud At The Store?
Retailers continue to be challenged in the transformation of their business to compete with Amazon, Walmart and others. Yet one of the challenges we consistently hear from CIOs is that they are significantly challenged in the type and quality of bandwidth that they can get access to at malls without exorbitant pricing and essentially paying for services not needed. It’s a frustrating reality, but malls are actually hurting their tenants through egregious networking covenants. So that begs the question of what can retailers do technologically to improve the store experience within the constraints they are playing with at the mall?
At the Aptos Engage event, CEO Noel Goggin highlighted how this transformation is affecting their business in particular, with 75% of their revenue now coming from cloud subscriptions, up from just 18% two years ago. Total revenues increase 29% with about 33% of that figure coming from organic growth with the remaining amount coming as a result of their acquisition of BT Expedite.
The technical highlight of the event was the new Singular Commerce Platform of Tomorrow, their future architectural path. While the current name doesn’t exactly roll off the tongue, the demo and deep dive discussions highlighted a strategic direction which, in my opinion, is likely to really resonate within the retail community as it is based on micro services architecture. Rather than just utilize slideware, the concept was demonstrated along with Pier 1 Imports. Pier 1 highlighted how the new architecture will be foundational to how they are able to transform their business faster and more cost effective than they originally thought. Perhaps most interesting to me was the demonstration of the failsafe technology built-in for if, or when, the POS or tablet has to operate offline from the cloud connection. In essence, the technology “elects a new leader”. From my perspective, this brings a level of insurance to Cloud solutions, particularly POS at the store level.
While our research shows the growth in cloud overall is strong, and in store systems is strong as well, retailers in the enterprise space have been much slower than their SMB counterparts in adopting cloud based POS. After seeing the demo I can see Aptos’ vision for really removing any buy barriers from retail CIO’s with regards to enterprise POS with this product. This is a good move in our opinion and does provide a bit more credibility to cloud for POS. Following the session, I struck up a conversation with a billion dollar plus specialty hard goods CIO sitting next to me and he expressed his opinion that it was the right direction as well, with nothing not to like for their consideration.
The new platform will be developed in parallel to the core product through Aptos Labs. The proof is in the execution and success will depend on how rapidly will they be able to add features/functions from the core product to the new platform, bringing existing customers along. I suppose it is much like the old question of how one eats and elephant, one bite at a time, but in this context, I suspect Aptos desires to be a champion speed eater.
Finally I would be remiss if I didn’t laud the sizeable company investment Aptos has made to the Retail Orphan Initiative (www.retailroi.org). At the event were guest Mike and Amy of a RetailROI project in Haiti. To date the Aptos community in two years has contributed over $80,000 to RetailROI and associated projects in Haiti, US, and Liberia. In addition, the company has created the Commerce of Caring podcast series to highlight RetailROI projects around the world. This is an effort thankfully the company is continuing to invest in, and this giving back is impressively built into the Aptos company character.