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POS 101: The Cloud

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If you’re a living, breathing human being and you’ve lived on Planet Earth for the last ten years or so, chances are you’ve heard about a little thing called the cloud. (I’ll make an exception for the undead and astronauts on long-term missions, but even those folks must have heard whispered rumors of this strange, new technological sensation.) Because the term is so prevalent, software providers and software reviewers, like myself, tend to assume that everyone knows what we’re talking about when we mention cloud services. But alas, that is not the truth. Far too many people still think that cloud storage and cloud–or SaaS (software as a service)–providers have something to do with the weather. But though they share a name, the cloud has nothing in common with cirrus or cumulus phenomena. Likewise, The Cloud is not a reference to an obscure Marvel supervillain.

But I digress. Perhaps it might be more helpful if I stop telling you what the cloud isn’t, and start explaining what it actually is.

So What IS the Cloud?

That’s a fair question–and not particularly easy to answer. Essentially, the cloud is a vast, unseen computer network. If you want, you could describe it as “an inventory of data assets” or less helpfully, as “a vague description of things happening elsewhere.” (You could also refer to it as “a visible collection of particles of water or ice suspended in the air, usually at an elevation above the earth’s surface,” but that would be incorrect, as we discussed above.)

The best, most accurate phrase I’ve ever heard to describe it is “someone else’s problem.”

Presumably, you are familiar with the basics of computer technology. You have a computer at your home or office. It is a material object, which you can touch and feel and plug into an outlet. You can store important documents and files on your computer hard drive, and access them whenever you want–provided, of course, that you have physical access to your computer. Okay, that’s all very well and good, but what happens if your computer gets a virus, as they are oft wont to do? Or if you step on your ill-placed laptop in the middle of the night? (Don’t laugh. That has actually happened to me!)

Well, if something external–be it a hacker or your big clumsy foot–interferes with your computer you are simply out of luck. Unless, of course, you’re related to someone who works for the Geek Squad or the Genius Bar–or have had the foresight to store your files on a zip drive (or in days of yore, a floppy disc).

Enter the cloud.

These days, using the real-life magic of the Internet, you can store information on a vast, interconnected network, one that does not depend on the feeble integrity of a mere PC. The odds are that you already use this vast, interconnected network–this cloud–on a daily basis, whether you realize it or not. Anytime you access your email account, you are walking in the cloud, my friend. And every night when you tune into Netflix to catch the latest episode of House of Cards, you are tapping into the mighty power of cloud technology.

Do you see the beauty of it now? You don’t have to use up your precious computer memory anymore, downloading movies or storing the 1,546 pictures you took on your epic Hawaiian vacation. If you want to access your files, pictures, tax documents, amateur novellas, etc. all you need do is hop on the Internet and retrieve them from the cloud. Storing and protecting your stuff is now someone else’s problem. You are free to drop your computer off the balcony, or spill your evening martini onto your keyboard, and all the things you hold most dear will still be safe and sound, tucked neatly away in the nebulous vapor that is the cloud.

cloud computing


What’s This Got to Do With POS?

That’s really the $64 million dollar question, isn’t it? How can you actually harness the power of the cloud to do things of more significance than, say, binge-watching Orange Is The New Black? Happily, cloud technology has myriad uses beyond simple communication and entertainment. For example, software programs–those things you used to have to install on your server or hard drive–can now be easily hosted in the cloud. It doesn’t take too much imagination to realize that cloud-based software has certain rather delicious implications for retail and restaurant business owners.

For example, any information you enter into your point of sale (POS) software–think customer stats, P&L information, employee data, sales reports, etc.–can now be accessed anytime, from anywhere. The onus of protecting your servers from hackers and employee infringement falls on your SaaS provider–one less thing you have to think about! And your data is also kept safe from physical harm, water damage, corrosion, and tampering. If your little cafe burns to the ground or a flood sweeps away the contents of your shoe shop, all is not lost. Your financial figures, your inventory databases, and your customer’s important personal information will remain intact (and your insurance company can take care of the rest).

There is a price for this convenience, of course. No such thing as a free lunch, and all that. Unlike physical software, which you purchase one time and install, SaaS software usually involves a monthly fee.

The Real Cost

It may be counterintuitive, especially to those of us who were around at the advent of traditional software all those many years ago, but oftentimes, paying a monthly fee for the right to use your POS software can actually turn out to be cheaper in the long run than buying the licensing rights to it once. And while this is not always the case in life, when it comes to comparing SaaS and on-premise software, cheaper really does equal better.

I grant you, buying a disc or two of proprietary software does seem like it should save you more money than paying a fee for essentially the same software, month after month after month. If the on-premise software costs you $1500, and the monthly fee for the SaaS version is $100, then technically after ten months or so, the more expensive, one-time purchase would be much more cost effective.

Or would it?

There’s a catch, you see. Most on-premise POS systems do not include free customer service or technical support. Whoops–that could be a costly mistake! Locally-installed software also does not update automatically, or come with bug fixes, or sync up with new 3rd-party software integrations. Whoops again! When you begin to figure in frequent extra charges for technical assistance, software updates, and integrations, that budget-friendly, on-premise software begins to weigh heavily on the wallet–and require a lot of thought and maintenance on the part of the business owner.

Cloud-based point of sale systems, in contrast, are user-friendly in the most basic sense of the phrase. You don’t have to update them–ever. Updates are someone else’s problem. (Thanks, cloud!) The majority of SaaS software providers include at least free basic email support, and many of them offer free phone and live chat support as well. Another point for the cloud! And those pesky bug fixes? Already taken care of–in most cases before you even realized there was a problem. What’s more, cloud-based software is constantly evolving and growing. You may not know it right now, but in ten years (or five years–or even next month!) someone will invent an amazing new app that you can use to revolutionize your business. If you invest in an SaaS point of sale, chances are you’ll get to integrate with whatever cutting edge accounting, customer loyalty, or PR tools are available in the future. Not so with boring old locally installed software–what you get now is what you’ll still be trying to work with in a decade. In this age of rapid technological advancement, stagnation is death. POS software that exists in the cloud can help you maintain an edge, stay relevant, and change with the times.

Too Good To Be True?

Nothing is perfect, unfortunately. Even something as awe-inspiring and seemingly omnipotent as the cloud has certain . . . limitations. Most significantly, all the might of the cloud is pretty useless unless you have a reliable Internet connection. For most people, especially private citizens, that’s not a huge issue. We’re already well into the 21st century, after all, and the majority of folks–at least in first world countries like America–have constant access to Internet in their homes, or can at least go to the local Starbucks or McDonald’s if they need a little free Wi-Fi. For business owners, though, things are not always so cut and dry. Restaurants or shops in old buildings and/or remote areas might be prone to spotty Internet connections–and having your POS crash at random times could be disastrous in more ways than one. And for mobile businesses–food trucks, concessions stands, pop-up booths, kiosks, and the like–ready Internet is a precious and sometimes impossible-to-find commodity.

There are workarounds to problems of Internet access, fortunately. Many cloud-based POS systems allow you to process transactions offline; that way, if you need to sell your wares but don’t have a Wi-Fi connection, transactional information is simply cued until the Internet connection is restored. Having offline capabilities doesn’t solve every problem–it’s not much use if you desperately need to see hourly sales figures or closely track employee activity–but it certainly helps.

An unreliable Internet connection is not the only pitfall of SaaS use. For some companies, letting data security issues be someone else’s problem just isn’t realistic–or wise. Major corporations that deal with billions of dollars each year, as well as weapons firms, security teams, and certain branches of the government, don’t feel exactly comfortable leaving things in the hands of other people, other servers, and other datacenters. And I can’t say as I blame them, really. If I were responsible for storing nuclear codes, I wouldn’t want them floating out there in the cloud, where they could potentially be stolen or compromised by terrorists, dictators, Wiki-leaks vigilantes, and/or precocious teenage troublemakers. Now, to be fair, most cloud-based POS providers have very, very good security procedures in place–certainly better than what the average small business owner could set up for themselves. Similarly, international cartels aren’t exactly lining up to see the monthly sales totals from the local sandwich shop. But cloud servers aren’t immune from hacking, and can be compromised. It’s certainly something to think about.

Now What?

There will always be fads, and this is just as true of technology as it is of popular culture, diets, and clothing trends. Right now, no one is eating gluten, but in a few years, wheat products will be the new kale; right now, everyone is addicted to their smartphone, but come 2025 we may all be communicating telepathically via direct Internet hookups in our brains. Fads come and go. Let me be clear on this, though: the cloud is not your average hot-thing-of-the-moment, here today and gone tomorrow. Cloud technology isn’t going anywhere. If anything, our society will become increasingly more dependent on the cloud in years to come.

I say all this to make it clear that the cloud-based POS bandwagon is not just for forward-thinkers and industry revolutionaries. It is the inevitable direction of restaurant and retail business management. For the most part, the kinks have been worked out of the SaaS concept. Growing pains are unavoidable in any new technology, but the convenience and relatively low cost of cloud-based point of sale software are worth whatever minor pangs may be involved in treading new ground.

If you’re interested in learning more about cloud-based POS solutions, check out our extensive library of POS reviews.

Julie Titterington

Julie Titterington

Managing Editor at Merchant Maverick
Julie Titterington is a writer, editor, and native Oregonian. She graduated from George Fox University in 2004 with a BA in Writing/Literature. Julie has appeared in a variety of industry publications, including YFS Magazine, PM Times, and SmallBizClub. For the last five years, she has specialized in SMB software and services, particularly project management, point of sale, and small business lending.
Julie Titterington
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1 Comment

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Michael Spencer

    Terrific post, really enjoyed how you used humour to set the tone for this. I can tell you are actually a creative writer on this piece. Cloud SaaS is all about scaling, being seamless and doing more for cheaper. I’m convinced, the real gold for retail, restaurants and hospitality will come from the API integrations (sometimes called “Add-ons”) that these POS vendors are partnered with. In fact, I think they will be disruptive.

    Retail technology is heading to AI, embedded analytics and machine-learning that can offer new customer experiences via predictive analytics. Cloud integration of small businsses will enable more people to become retail entrepreneurs, for example, and have new ways to generate ROI and optimize digital touch points with the everyday and (younger) consumer.

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