On-Prem and Cloud Hybrid Point-of-Sale (POS) Solutions

Given that current research indicates it takes three or fewer bad experiences for most consumers to give up on a brand, it is increasingly necessary to proactively identify friction points in your customer journey.  

Technical problems, particularly those that inhibit the ability to process transactions, present a great challenge and a great opportunity. With customer experience and revenue at stake, most retailers have decided it is simply no longer tenable to risk system outages. What follows is a step-by-step guide to a potential solution.  

Why on-prem and cloud? 

On-prem and cloud hybrid point-of-sale (POS) solutions help mitigate technical concerns by giving businesses the ability to continue critical business operations during either an internet outage or a system failure. 

An on-prem and cloud hybrid model offers a path forward by maintaining a small hardware footprint at the retail locations and a cloud-based system. Both systems can run business-critical software, meaning that either individually can fail and the business can continue operating. So what are the things to keep in mind with this type of system? 

Questions to answer 

Generally, this type of system has several considerations that will change the complexity of creating the right solution for a specific company's needs. 

1. What level of data integrity do you need? 

Depending on how vital this requirement is, it will significantly change the system's need for immediate vs. eventual consistency. Take, for example, a car dealership. Losing a transaction here would be very disruptive. After all, cars cost quite a lot. On the other hand, a QSR (quick-service restaurant) brand could likely afford to lose a single sale while the system is changing the source truth to the cloud or on-prem infrastructure.

2. Cloud first or on-prem first? 

The choice to run primarily from the on-prem servers or primarily from the cloud is driven by understanding the benefits of both approaches.

Cloud first pros: 

• Easy data transfer to storage locations.
• It makes integrating with non-essential systems in your cloud environment easier.
• Monitoring is generally easier as most cloud providers offer turnkey cloud monitoring solutions.

On-prem first pros: 

• Cheaper to use on-prem hardware capable of running the system instead of still primarily using the cloud.
• Easier to know if the on-prem server has an issue.
• Decreased latency as compared to reaching out to servers in the cloud.

Put differently, in a cloud-first system you will be introducing network latency and cost for the sake of more straightforward configuration and data export. In an on-prem-first system, you reduce network latency and cost at the cost of increased configuration complexity and difficulty of data export.

3. What type of tech is needed to enable cloud & on-prem hybrid solutions? 

Generally, you will want to use a message-based system to support the type of distributed architectures needed to enable cloud and on-prem hybrid solutions. The top players in this space are Kafka and RabbitMQ, which offer the performance and flexibility to build a robust high-volume system that will scale with a business's needs. This will often involve some sort of reconciliation process when going from a cloud and on-prem disconnected state, because of system or internet failure, back to a connected state.

4. What systems are truly critical for your business? 

Ensuring you understand what your business's retail locations need to operate for, say 24 hours, will be crucial to create an effective hybrid system. The more you can narrow down this list, the cheaper it will be to maintain an on-prem footprint.

When not to consider a hybrid solution 

When your company is not at a scale that they can afford an IT organization, hybrid solutions are by their nature complex and generally require a sophisticated IT organization to operate them effectively. 

When your company is willing to accept risk for the sake of reduced costs, there are situations where your limited capital expenditure dollars may be needed in other parts of IT. There are certainly mitigating strategies to help this situation, for instance, having backup internet from a wireless provider or a manual workaround in the case of system failure. 

When your products are not time-sensitive, let's go back to our car dealership example. Ultimately a car dealership could easily ask patrons to return the next day because the nature of the purchase is not overly time-sensitive. However, a QSR brand that cannot serve a customer has lost that transaction as the customer will find another option.

Digital experiences that matter 

The recommendation to pursue on-prem and cloud hybrid solutions is not about implementing technology for technology's sake. These types of technical tools are a means of facilitating business outcomes and must be considered within a broader ecosystem of customer, employee and revenue needs. It's never one-size-fits all, but a complex environment of levers and opportunities that can be strategically aligned to keep pace with evolving expectations. On-prem and cloud hybrid solutions are just the beginning of the growth we can help you unlock.