The Sunday Times Social Media List

With the very best of intentions, the Sunday Time has launched a social media monitoring tool that aims to quantify and measure the influence of social networks. Like an excited little school boy I clicked my way to their page, but was sadly disappointed. Bad luck News Corp!

E-commerce Platform Selection

In the past decade, many millions of pounds have been invested by retailers in the development of platforms, systems and websites with the specific aim of growing (or defending) their market share by offering a multi-channel customer experience.

Several lessons have been learned through this decade of investment, regardless of whether the initial objectives were achieved. Sadly, there is very little by way of documentation or commentary designed to share these learnings and enable the retail sector to continue investing without wasting money re-learning. This article is designed to summarise some of the lessons of the past decade.

“We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”
Jeff Bezos, CEO Amazon, Annual Report of 1998.

The ‘Technology Landscape’ has changed dramatically in 10 years

The early pioneers of multi-channel retailing had to invest significantly in developing the skills and technologies that have come to set the standard for e-commerce. Working with development platforms like IBM Websphere and Microsoft Commerce, leading retailers adopted the ‘build your own’ approach which enabled them to tailor the integration and functionality to their specific requirements and legacy systems. In an approach that mirrored the methodology of early pure-play pioneers, many multi-channel retailers augmented these custom built systems with commercially available technologies. Amazon described its technology strategy in its 1998 annual report as:

“a combination of its own proprietary technologies and commercially available, licensed technologies”

This enabled them to rapidly develop not just the core online shopping technologies, but also the suite of merchandising, reporting and marketing tools required to compete effectively with the pure-play operators.

The ‘barrier to entry’ for retailers taking this approach was huge, due to the size of investment, skills and resource required. The fact that only retailers with deep enough pockets to overcome these challenges fuelled an explosion in ‘Software as a Service’ (SaaS) providers, supplying ‘off the shelf’ e-commerce platforms usually for an annual licence or support fee. Likewise, digital agencies developed ‘in-house’ systems that could be touted as low cost, off the shelf solutions that could be up and running quickly.

The downsides to the SaaS model are numerous:

1. The platform development strategy is entirely beyond the control of the retailer. In the competitive and rapidly evolving environment of e-commerce, it is essential that operators have the tools to move quickly to enhance customer experience, trial new price and promotion mechanics and merchandising concepts. The software platform provider however is unlikely to have the same development priorities.
2. There is no significant differentiation that can be achieved with a system that is designed to be a ‘one size fits all’ platform.
3. Future proofing. There is no guarantee that the software provider will invest in their platform year after year, or indeed, that they will continue to operate!

Until recently, the SaaS approach has been the only viable option for small and medium sized retailers looking to develop their multi-channel proposition with a fully transactional website. The most significant industry development has been the quality and stability of open source platforms available.

‘Open Source’ as a concept was developed during a meeting of industry figures in Palo Alto (USA) on 7th April 1998 in reaction to Netscape's announcement of a source code release for Navigator, as the open source brand, Mozilla.

Open source software projects began to emerge from networks of volunteer programmers. Notable examples include the Apache HTTP Server and the e-commerce platform osCommerce. One of the most successful open source products is the Linux operating system, an open source Unix-like operating system. There are some fields where open software platforms are the norm, for example VoIP applications which use Asterisk (PBX). Open source as a concept is not limited to open-source software. Microsoft has also joined the open-source discussion with the adoption of their OpenDocument format as well as creating another open standard, the Office Open XML formats.

Understanding what ‘open source’ actually means can be confusing as the distinction between “hosted solutions”, SaaS and open source has blurred.

True open source platforms must adhere to the following rules:

• Free Redistribution
• Source Code
• Derived Works
• Integrity of The Author's Source Code
• No Discrimination Against Persons or Groups
• No Discrimination Against Fields of Endeavor
• Distribution of License
• License Must Not Be Specific to a Product
• License Must Not Restrict Other Software
• License Must Be Technology-Neutral

There are several reasons for adoption of open source, but the most obvious are the improved value proposition when compared to most proprietary platforms, especially in terms of:

• Security
• Affordability
• Transparency
• Perpetuity
• Interoperability
• Localisation

(Casson and Ryan)

Correspondingly, there are some legitimate risks associated with the adoption of open source software by enterprises. These risks include the lack of formal support and training, the velocity of change, and a lack of a long term roadmap. However, it is reasonable to argue that exactly the same risks exist with proprietary systems.

TABLE: Open Source e-Commerce Platforms

Batavi	PHP	GNU General Public License
Broadleaf Commerce	Java	Apache License 2.0
Bots (edi)	Python	GNU General Public License
Interchange	Perl	GNU General Public License
Magento	PHP	OSL Ver. 3 / AFL Ver. 3
nopCommerce	ASP.NET	Mozilla Public License
Ofbiz	Java	Apache License 2.0
osCommerce	PHP	GNU General Public License
OpenCart	PHP	GNU General Public License
osCMax	PHP	GNU General Public License
PrestaShop	PHP	OSL Ver. 3 / AFL Ver. 3
Satchmo	Python	BSD License
Ubercart	PHP	GNU General Public License
VirtueMart	PHP	GNU General Public License
Zen Cart	PHP	GNU General Public License

An important distinction is that ‘open source’ does not automatically mean ‘free’. As Richard Stallman puts it, "Open source is a development methodology; free software is a social movement."

There are a number of commonly recognized barriers to the adoption of open source software by enterprises. These barriers include the perception that open source licenses are viral, lack of formal support and training, the velocity of change, and a lack of a long term roadmap. The majority of these barriers are risk-related.

“the adoption of open source alternatives to commercial software by enterprise software customers” a competitive risk factor cited in the Oracle annual report 2010.

What do I want from an e-commerce platform?
A good e-commerce platform should provide a retail business with a comprehensive suite of tools to manage their business. This should include:

• Category management tools
• Product management tools
• Merchandising tools
• Supply chain management/ inventory tools
• Customer data and insight tools
• Marketing tools