Hidden Costs of Cloud Based Systems

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cloud computing

Cloud-based POS systems are nowhere to stay. With the cloud, it is possible to reduce all in-store hardware to a minimum. Tablets are used to access the online POS system through a simple app. As the entire system is online, there is no need for local computers, a local server, or even any kind of complicated hardware.

Billing is possible through the tablet with an in-store wireless scanner and data is updated on the cloud server immediately. As you can see, it is a win-win situation for everyone. The store owner has to pay a minimal fee for this service and thousands of companies have already jumped on to the cloud-server bandwagon. However, every new technology has its drawbacks and cloud-based systems are no different, says Forbes.

Hidden Costs of Cloud-Based POS Systems

According to Datamation, cloud-based storage systems are now at an all-time high. Almost 94 percent of all enterprises, including retail stores, are actively considering cloud services to store their company data. However, a few companies are holding back as they have doubts. In their opinions, the concern is that cloud-storage systems are not as safe as they appear.

This doubt was reinforced recently. Hollywood actress Jennifer Lawrence had stored personal images on cloud-storage. Her account was hacked and the images were leaked all over the Internet. Retailers are not worried about images, but they are worried about customer data, company information, and financial information that is stored on the cloud server. Apart from the cost of data loss, companies are also worried about hidden fees that might be charged by these cloud-based POS systems. A few of the main concerns of the system are as follows:

Rogue Cloud Implementations – These are the main concerns of IT companies that store data online. More than 83 percent of companies saw rogue cloud implementations online and these implementations resulted in the loss of confidential data. The companies who faced this problem reported that the implementations resulted in account takeovers, defacement of websites, stolen goods, and stolen services, and they were very difficult to deal with.

Cloud Storage Costs – According to NFIB, cloud systems also had several hidden costs that could raise the eventual price of the entire system. A few of the most common hidden costs included the following:

  • Uptime charges were the most worrying. Uptime refers to the amount of time the cloud service is available. For most retailers, this may run anywhere from nine to nine, or six to five, 24/7, etc. No matter which uptime is decided on, it has to be specified in the contract. Additional uptime is charged extra.
  • Initial migration costs are also a concern. According to retailers, migrating data online is also expensive and may be charged extra as migrating fees. The software vendor will usually help you with the process but make sure you check before you sign the contract.
  • Unknown extras like storage limitations, collaboration or sharing data fees, fees for extra features like email management, inventory control, and extra systems may also raise the overall cost of the system.
  • SSL certificates are vital to ensure data security. However, getting and maintaining these certificates can be expensive. The security certificate should also protect the transmission process to and from the server.

Performance Bottlenecks – As the cloud server company expands to deal with its customers, there is the chance of ‘traffic blocks’ happening on its server. More than 64 percent of retailers worried that the extra load on the system would result in poor performance, system slowdowns, and slower financial transactions. This was particularly true for retailers as a slow system would hold up billing and result in annoyed customers who would abandon carts in irritation. In fact, APMDigest stated that Amazon was the first to note that a delay of even one second would result in a loss of $1.6 million in sales.

Pick and Choose

What retailers should know is that every system has its pros and cons, says Datamation. Yes, migrating to a cloud-based POS system may be a little complicated but it is worth the expense. According to CloudTimes, implementing a pick-and-choose policy could help you save time and money. All you have to do is choose the features you want and pay only for them. As for problems, every system has its issues, and cloud computing and cloud-based storage systems are no different. However, as the world of technology improves, these kinks will be worked out much more sooner than you would expect, and the system will improve. Vendors like Shopify are already offering affordable systems that are being used by small and large retailers all over the world. For retailers, this is a good future, as they will have access to a super-fast, effective POS system that is affordable and secure.


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