Understanding “Cloud” POS Systems in Restaurants

There’s a lot of talk about cloud computing, and it’s a definite buzzword around the merchant industry. Lots of restaurant and retail store owners and managers are sold on the idea of upgrading their point-of-sale systems to “cloud-based” systems, but what’s the truth about cloud?

Basically, cloud computing is a form of networked computing that stores applications and data on a virtual network rather than on a physical machine. Physical machines are then used to access these applications and data through connections to that network.

Often, the network used in cloud computing is the internet, so cloud and internet have become effectively synonymous in the minds of many. But the misunderstandings don’t stop there.

When ISOs sell “cloud-based” POS systems, they’re actually doing one of two things:

  1. selling a true cloud system, or
  2. selling a networked system of locally-hosted POS devices.

The first option is relatively rare, and somewhat risky. If you’re using a true cloud system, chances are that it’s internet based. This means that if your business loses its internet connection, you lose your entire POS system. You won’t be able to do anything using your POS devices because the applications they run are stored on the internet; your devices don’t store them locally, they only access them.

The second option is more common, but isn’t a true cloud system. Typically, a networked POS system will have a central computer acting as a server on which data is stored and managed. Individual POS devices will then be wired to this server, but they will still store applications and some data locally. This means that the entire POS system isn’t actually a cloud system because applications and data are still stored locally instead of centrally.

Be careful about ISOs that try to sell you on a “cloud” system. If they’re honest, then their product might put your business at risk because it makes you dependent on an internet connection to handle transactions. If they’re dishonest, then they’re probably using the “cloud” buzzword to obscure what’s actually happening with your POS system.

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