The difference between cloud-native and cloud-based

On the surface, when the word ‘cloud’ is thrown about, it’s easy to assume everything in the cloud is the same.

Well, it isn’t.

But before we dig into the differences between cloud-based and cloud-native software (and why it matters) it’s worth taking a second to explain what we mean when we talk about the cloud.

What is cloud computing? 

Cloud computing, in its modern form, emerged in the early 2000s. When we talk about the cloud we’re talking about a huge number of interconnected servers located in data centers around the world. So instead of storing and accessing data or running applications on a local computer or server, cloud computing enables us to access resources and services from anywhere, at any time, providing we have an internet connection.

Over the past decade cloud computing has evolved rapidly, with the introduction of various cloud service models (Infrastructure as a Service, Platform as a Service, Software as a Service) and the expansion of cloud capabilities, such as storage, analytics, machine learning, and more.

Today, cloud computing is an integral part of the technology landscape, powering a wide range of services and applications across industries and sectors, from small businesses to large enterprises. It’s transformed the way individuals and businesses approach computing and data management and it provides cost-efficiency, scalability, and convenience.

From a retail perspective, the cloud helps retailers enhance and streamline their operations, improve customer experience, and optimize different areas of their business. By leveraging the flexibility, scalability, and accessibility of the cloud, retailers can go a long way towards creating stand-out shopping experiences, ultimately delighting their customers and achieving business success.

What’s the difference between cloud-based and cloud-native software?

As seen above, the cloud and cloud services are awesome. They’ve transformed computing and the way we think about software. And ‘the cloud’ has inevitably become a buzzword across all sectors.

Retail is no different. 

It’s why there’s been a race among software vendors to move their offerings to the cloud. And this is where the differences start.

While both cloud-based and cloud-native software run in the cloud, cloud-native software is built in the cloud and for the cloud using cloud technologies and services, while cloud-based software may have been developed for on-premises use originally and later migrated to the cloud.

Cloud-native software is specifically designed to be run in the cloud. It is built using cloud technologies and services, such as containers, microservices, and serverless computing. Cloud-native software is designed to be highly scalable, resilient, and easily deployable, and can take full advantage of the benefits of cloud infrastructure. It is often developed using cloud-native frameworks and platforms.

Cloud-based software, on the other hand, tends to be less flexible, is harder to integrate with other systems, maintain from a security standpoint and to scale. Cloud-native applications, designed specifically for the cloud environment (and dedicated to specific cloud-platforms such as AWS, Microsoft Azure and Google Cloud Platform), aim to address many of these limitations by leveraging the full capabilities and benefits of cloud infrastructure.

What benefits does cloud-native retail software give retailers that cloud-based software doesn’t?

While both cloud-native and cloud-based software can offer benefits to retailers, there are some advantages that cloud-native retail software can provide that cloud-based software may not. 

Here are some examples:

• Flexibility and agility: Cloud-native retail software is designed to be modular, with each component working independently and being easily replaceable or upgradable. This allows retailers to quickly and easily adapt to changing market conditions, add new features, or make improvements to their systems, without requiring significant changes to the underlying infrastructure. This level of flexibility and agility may not be possible with cloud-based software that is not specifically designed for the cloud.

• High availability and fault tolerance: Cloud-native retail software is typically built using microservices and containerization, which can provide high availability and fault tolerance. If one component fails, the others can continue to function, which can help minimize downtime and reduce the impact on customers. While cloud-based software can also provide high availability, it may not be as fault-tolerant as cloud-native software.

• Performance and scalability: Cloud-native retail software is designed to be highly scalable, allowing retailers to easily add or remove resources as needed. This can be especially important for retailers during peak sales periods, when demand for their systems may spike. While cloud-based software can also provide scalability, it may not be as efficient or cost-effective as cloud-native software.

• Maintenance & Updates: Cloud-native retail software requires little to no effort as most of the maintenance and updates are provided automatically by the service provider. Since they’re built with microservices, interruptions are minimal. Updates and changes can be made to individual modules independently, without impacting the performance or availability to the entire software. Cloud-native applications, by default, also guarantee proper disaster and recovery thanks to high availability for business solutions alongside redundancy and failover support.

• Cost optimization: Cloud-native retail software is designed to optimize costs by taking advantage of cloud-specific services and features, such as serverless computing or auto-scaling. This can help retailers save money on infrastructure and reduce overall operational costs. While cloud-based software can also provide cost savings, it may not be as efficient or optimized as cloud-native software.

Overall, while both cloud-native and cloud-based software can provide benefits to retailers, cloud-native retail software can offer additional advantages in terms of flexibility, fault tolerance, performance, scalability, and cost optimization.

What are the benefits of cloud-native software in retail?

Cloud-native software can offer several benefits to retail businesses. 

It’s why understanding the differences between cloud-native and cloud-based is becoming increasingly important. Just look at the latest information from Gartner - according to the 2024 Gartner® Market Guide for Unified Commerce Platforms Anchored by POS for Tier 2 Retailers, retailers should verify the vendor’s capability to deliver cloud-native POS solutions that guarantee adequate resilience, data security and privacy through a thorough assessment of its disaster recovery features. 

As per the report, cloud-native solutions are the recommended route to take because they guarantee resilience, data security, and privacy - among other benefits.  

Here are some of the key advantages of cloud-native software:

• Scalability: Cloud-native software is designed to scale easily and efficiently, allowing retail businesses to handle fluctuations in demand without having to worry about provisioning new infrastructure or servers. This can be especially important for retailers during peak sales periods, such as Black Friday or Cyber Monday, when there may be a sudden surge in traffic.

• Cost-effectiveness: By using cloud-native software, retailers can take advantage of a pay-as-you-go model and only pay for the computing resources they use. This can be a cost-effective solution for retailers who want to avoid the upfront costs associated with on-premises infrastructure.

• Agility: Cloud-native software can be deployed and updated quickly and easily, which can help retailers respond to changing market conditions or customer needs. Upgrades take place without any down time and service level agreements ensure high availability. This can be especially important for retailers who want to launch new products or services quickly.

• Security: Cloud-native software leverages enhanced security features that are designed specifically to mitigate cloud security threats. Security features like encryption for data in transit and at rest, automatic monitoring and threat detection, vulnerability management, continuous compliance assurance, geographical redundancy and all resources are automatically available.

• Customer experience: Cloud-native software can help retailers provide a better customer experience by enabling real-time inventory tracking, personalized recommendations, and seamless checkout processes.

With these benefits in mind, knowing that a piece of software is truly cloud-native when a vendor says it is also key. A great way to do this is to look for the seal of approval from the MACH Alliance. If a vendor is MACH-certified you can guarantee that the solution is truly cloud-native.

In Summary 

To summarize, cloud-native software is designed for the cloud, optimized for the cloud, and will give you limitless possibilities. You are in control with cloud-native software and can create a retail ecosystem that’s the perfect fit for your business and your needs. And this becomes easy to adapt and evolve as you grow. 

This is opposed to cloud-based software which has been migrated to the cloud, isn’t fully optimized, and doesn’t fully leverage the cloud’s capabilities.

In short, cloud-native software can help retailers stay competitive by providing them with the agility, scalability, and cost-effectiveness they need to succeed in a rapidly changing marketplace. It is the basis for buying a solution as a service with a service level agreement for high availability that includes continuous updates and maintenance. 

With cloud-native applications, you are the master of your own destiny and not beholden to the whims of a software company or being ‘locked-in’ to using software that’s on-premise and relies on developer maintenance.  

For a forward thinking retailer, cloud-native software is the future if you want to keep pace with all the changes happening in retail.

If you’d like to find out more about our cloud-native Unified Commerce Platform anchored by POS and how to future-proof your business, then we’d love to talk to you.