A “house of cards” is one way to characterize this situation. It is also further injurious because quarterly results are driving decisions for revenue and profit, not a long term vision. This is the “elephant in the room”. How do I upgrade and get my infrastructure and applications into the twenty first century and not kill the company? Is the answer to this problem the ambiguous solution called the “Cloud”? I think so if you believe and trust in the notion that someone else can be responsible to make sure your system never goes down, provides high speed performance, ensures your information is secure and gives you control over how you use it. When speaking to retailers many want to get out of the IT business, especially mid-market companies. By going to SaaS based systems you can move from a capital intensive and internally complex business model to one where your costs are now operational, predictable and much simpler, sort of.
So is this a good idea, outsourcing your systems and applications? The answer in my opinion is yes, but only if you do it in a thoughtful and cadenced march having a very precise map to where you are going. The challenge is you can never give away control. In the past you had to rip and replace to go from an old system to a new one (think ERP). Now with these “Cloud” based offerings you can off load applications by simply shutting the old ones down and turning on the new ones, discarding your old hardware investments. This journey is obviously not quite that simple and does take a lot of time. The good news is you prioritize and choose what you want to shut down and when.This may be the only reasonable and fiscally responsible way to go.
I believe this is the future and that over the next ten years you will see service based business solutions becoming mainstream for most everything a retail company does. That is precisely why the Microsoft’s, IBM’s, Oracles, SAP’s, etc. are investing billions in this infrastructure.