Online Sellers Rely On Cloud To Handle Digital Surge

It’s no secret that COVID-19 has already exacerbated the struggles of brick-and-mortar sellers while digital sales are booming. And now, in an effort to stay competitive in online sales, cloud services have become even more important for retailers.

The Wall Street Journal reports that retailers have been relying more heavily on the cloud amid the surge in digital sales so as not to crash their IT systems.

Last month, Canalys, the Singapore-based technology researcher, reported that cloud spending surged in the second quarter as lockdowns drove high levels of consumption.

Spending on the worldwide cloud infrastructure services sector grew 31 percent in the U.S. in Q2 to reach $34.6 billion compared to the same period last year, Canalys found.

“This represents the largest quarterly expansion in terms of U.S. dollars, as consumption of cloud-based services for online collaboration and remote working tools, eCommerce, remote learning and content streaming hit new records during lockdown,” Canalys said in a statement.

Amazon Web Services (AWS) was the market leader in cloud services in Q2, taking a 31 percent share. Microsoft’s Azure comprised 20 percent market share for the first time. Google Cloud took third place with 6 percent.

Michael Fisher, Etsy’s chief technology officer, told the WSJ that the company’s online marketplace migrated its IT systems into Google Cloud in February. He said the eCommerce website, which specializes in handmade or vintage items and craft supplies, liked Google’s cloud-based search and machine learning capabilities.

“We couldn’t have predicted better timing,” Fisher told the newspaper. “We’ve doubled the amount of data we process.”

And it paid off: Earlier this month, the New York-based crafts giant reported huge gains in the second quarter. Etsy’s Q2 revenues rose to $428.7 million, up 136.7 percent from $181.1 million for the same period a year ago. Etsy also earned $96.4 million (75 cents per diluted share), a 429 percent increase from the $18.2 million (14 cents per diluted share) for the same quarter last year. The results surpassed analysts’ estimates of 39 cents per share on $329.8 million of revenues.

“Many customers are scaling beyond their wildest projections,” Carrie Tharp, who oversees retail and consumer strategy at Google Cloud, told the newspaper.

Last month, Google reported a 43 percent rise in revenue from its cloud computing services over the second quarter.

“Google Cloud is highly focused on six core verticals, with retail being one of them,” Alex Smith, senior director of channels at Canalys, told the WSJ. He said that Google has tailored its cloud services to fit the needs of large retailers sitting on massive amounts of data, offering cloud-based analytics tools, contact center services and recommendation engines — all increasingly powered by artificial intelligence.