Resource Guide: E-commerce Platforms

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  If you decide to buy, choose between a licensed solution or software as a service (SaaS). With licensed software, you purchase the e-commerce software package and host the solution internally or externally at an outsourced hosting facility.

  Licensing for a packaged software solution is normally structured on a per-user or per-CPU basis and typically requires an up-front investment of $400,000 and up. Annual maintenance costs usually fall in the range of 15%-22% of the license cost. The license model also requires an investment in server hardware and database software.

  Vendors offering packaged e-commerce solutions have built core features and functionality into their solutions but provide the flexibility to customize a Website's look and feel. The licensed model is typically used by midsize and large multichannel companies wanting absolute control of their e-commerce platform. Benefits include the ability to make changes as required, reduced time to introduce new features, and the ability to integrate with best-of-breed technologies.

  Purchasing licensed software is the more common solution. The SaaS, or on-demand, model is gaining in popularity, however, especially among businesses that do not want to commit the large up-front investment required by a licensed model. This is particularly true of small and midsize companies that don't require complete control of their platform.

  An on-demand e-commerce platform provides a company with the use of a vendor's solution for a flat monthly fee or a percentage of revenue. The vendor owns and hosts the software, which may exist on a shared or nonshared environment. In a shared environment there is one version of the software, and all clients share the code and server resources. In the less common nonshared environment, the resources are dedicated to a particular client.

  Up-front setup fees for an on-demand solution can range from $50,000 to $400,000, depending on the complexity and size of the client's business. The flat-fee or revenue model is typically set up with a tiered structure based on online revenue, site visits, or order volume. Fees are typically 1.5%-3% of sales.

• Look at the pros and cons of hosting and managed services. Hosting means that you buy a solution and the necessary hardware and pay the vendor to put the hardware in its facility, where it will reside. In the managed-services model, you buy the hardware and the software, the vendor hosts the hardware, and you contract with the vendor to maintain the operating system and e-commerce software application.

  Before you decide which model you want to use, you need to understand the vendor's concept of maintenance and updating; you also need to know your IT staff's ability to support hosting the solution internally or externally.

• Seek a vendor you can partner with. When you're researching e-commerce companies, you want to find a vendor that will work actively with you. It's crucial to have that kind of relationship in order to be sure that you will have the support and maintenance you need.

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Tocky Lawrence is vice president of F. Curtis Barry & Co., a consultancy specializing in Internet platforms, order management systems, fulfillment, and contact centers.

	A SAMPLING OF e-commerce platform providers

There are many e-commerce platforms from which to choose — so many that we can't possibly compile a comprehensive list here. Below is information on some of the major providers.

	ATG (Art Technology Group)

	617-386-1000; www.atg.com

ATG offers a large suite of modules that complement its core ATG Commerce solution, including ATG Merchandising, ATG Campaign Optimizer, and ATG Outreach for e-mail and Web marketing. ATG offers both a licensed solution and an SaaS model, as well as hosting as an option.

	Demandware

	781-756-3700; www.demandware.com

One of the newer players, Demandware offers an SaaS model that includes installation, upgrades, and scaling. The solution gives marketers and merchandisers the ability to maintain promotions, site content, product information, and analytics. Demandware Studio provides the client the flexibility to customize the creative and functional design aspect with full control of design templates, business logic, and page flow.

	Fry

	800-379-6858; www.fry.com

Fry offers its Open Commerce Platform (OCP) as a paid-services engagement: Clients own the code, and Fry performs site development and maintenance. Fry's strong background and expertise in Web design along with OCP as the foundation provides a client with a highly customized solution.

	GSI Commerce

	610-491-7664; www.gsicommerce.com

GSI Commerce Core Technology Services is a combination of proprietary and third-party applications built to flexibly support features and functions on a common infrastructure while allowing each partner's solution to be customized to fit individual business needs. GSI Commerce allows partners to maintain the e-commerce solution through the use of promotions management, search management, catalog management, and content management. Along with its e-commerce platform, GSI offers an end-to-end solution including technology services, customer care, and fulfillment.

	IBM Corp.

	914-499-1900; www-306.ibm.com/software/websphere/

IBM's Websphere Commerce comes in three variations: Websphere Commerce Enterprise for large, high-volume b-to-b and advanced b-to-c global businesses; Websphere Commerce Professional for online selling that incorporates personalized and cross-channel shopping; and Websphere Commerce-Express, which provides core capabilities for smaller companies.

	MarketLive

	877-341-5729; www.marketlive.com

MarketLive's MarketLive5 e-commerce platform is an end-to-end solution containing marketing, merchandising, customer loyalty, product management, site management, and order processing. It can deploy as a subscription-based, customizable shared-instance solution; as a hosted solution; or as an on-premises solution.

	Microsoft Corp.

	425-705-3739; www.microsoft.com/commerceserver/default.mspx

Microsoft's Commerce Server 2007 is designed to fully leverage ASP.NET 2.0. It has merchandising, catalog management, order processing, and .NET smart client user interfaces.

	Prosodie Interactive

	866-544-9582; www.prosodieinteractive.com

Prosodie Commerce includes a merchandise tool and search engine optimization, affiliate marketing, loyalty program, and promotional options. It is available as a hosted dedicated solution or in a shared-server environment.

	Vcommerce Corp.

	480-922-9922; www.vcommerce.com

Vcommerce's eCommerce Storefront, an SaaS solution, provides merchandising, integrated analytics, search and guided navigation, predictive merchandising and personalization, and A/B testing. Vcommerce also offers order management, service, and fulfillment options.

	Venda

	888-878-3632; www.venda.com

Venda's e-commerce solution is an SaaS solution that includes product and catalog management, merchant content management, self-service promotions, e-mail marketing campaigns, affiliate marketing, natural-language search engine functionality, and personalization.

Additional solutions to consider:
Amazon 866-557-2823
www.Amazonservices.com/aes

BroadVision 650-542-5100
www.broadvision.com

Competitive Computing 802-764-1700
www.competitive.com

Digital River 952-253-1234
www.digitalriver.com

eOne Group 402-970-6701
www.eonegroup.com

LaGarde 913-489-8000
www.storefront.net

NetSuite 650-627-1181
www.netsuite.com

SiteForm 773-334-8030
www.siteform.com

Warp 9 800-508-9339
www.warp9inc.com

Weblinc 215-925-1800
www.weblinc.com

Yahoo! Small Business 866-781-9246
smallbusiness.Yahoo.com/ecommerce

	SIX TIPS FOR avoiding common pitfalls

• Put your requirements in writing. Too often e-commerce solutions are built or customized based on verbal agreements — but what the vendor provides and the customer expects don't always match.

• Conduct a request for proposal (RFP) process. This identifies to the vendor what your requirements are and establishes initial pricing.

• Develop a three- to five-year budget scenario with up-front or startup costs, initial year investment, and subsequent years' investment. Include annual maintenance fees for hardware and software support. It's important to understand the total investment to determine which solution is best for your business.

• Define a schedule or timeline. Many companies underestimate the time it takes from establishing requirements to implementation.

• Formalize a project plan.

• Be sure to schedule status updates on regular intervals.
  — TL