There are other relatively less compelling reasons why loyalty is unlikely to be moving to cloud soon. Customer is the focal point for all consumer businesses and loyalty is a critical component in fighting competition.
Therefore, for most businesses, the ability to respond fast to dynamic customer market changes is a critical or core competency. Thus, many businesses will consider their loyalty application as core and hence demand ability to customise/modify the loyalty application to their needs. Customer intelligence held in the loyalty database is a gold-mine for the business to profile and target their customers with the most effective offers. Businesses with valuable data in the cloud will perceive this as a risk. There are no enterprise class rich loyalty applications cloud ready as yet, even though one could host applications like Oracle Siebel Loyalty for multiple customers to simulate loyalty on the cloud in a limited manner.
The latest outage of Amazon cloud services and Gmail, data breaches like the Sony Playstation Network and AT&T security breach which exposed 100,000 email addresses of iPad 3G does not provide much confidence to those considering moving to cloud services. Incidents like these will push the timeline for loyalty moving to the cloud further away.
The writer is senior vice-president, ITC Infotech