Building A Scalable Warehouse In The Cloud

By Keith Phillips, President and CEO, Voxware and Diego Pantoja-Navajas, CEO, LogFire

As more technology solutions become available in the cloud, warehouses that still rely on on-premise software are getting left behind. Not only do older on-premise solutions lack the scalability that companies and 3PLs need to adapt to the changing face of multi-channel and retail businesses, but the total cost of ownership (TCO) for even a single software solution of a traditional solution can use up most of a CIO’s budget. Cloud adoption is growing across all industry sectors—so much so that research firm Gartner predicts that, by the end of 2017, nearly half of large enterprises will have deployed hybrid cloud solutions.

The High TCO of On-Premise Technology and Solutions

To start using an on-premise solution, the first step for many companies is to open the checkbook and take a deep breath – and one better make sure the checkbook has plenty of checks as well. After all, implementing an on-premise solution can run into the hundreds of thousands of dollars or more. In order to host and maintain the software, traditional solutions involve data centers, IT support personnel, and technical infrastructure. To oversee the implementation, they must often pay expensive consultants to interface or integrate the new software with their existing solutions. And companies implementing traditional solutions must wait a long time before new warehouse technology is operational—and an even longer time before seeing an ROI, because of the high up-front and ongoing costs.

To make matters worse, the financial costs associated with on-premise warehouse technology don’t stop after the integration. With on-premise software, the CIO is also responsible for overseeing and maintaining the data centers and the technical infrastructure needed to support the solutions and technology. CIOs are under increasing pressure to reduce their costs and staffing needs, but managing this infrastructure means that CIOs must employ even more IT staff or push off other initiatives. From every angle, the TCO for on-premise warehouse technology is constantly an increasing investment.

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