April 22, 2010, 12:27 PM

GSI adds licensed software and deepens its ties to Europe

GSI Commerce Inc., which hosts e-commerce sites for more than 200 retailers, is adding licensed software and forging a stronger European presence through its new partnership with Germany-based Intershop Communications AG.

GSI Commerce Inc., which hosts e-commerce sites for more than 200 retailers, is adding licensed software and forging a stronger European presence through its new partnership with Germany-based Intershop Communications AG.

GSI has invested $8.2 million for a 12.6% stake in Intershop, which reported 2009 net income of €1.7 million (US$2.26 million) on net revenue of €31.8 million (US$42.27).

Under the terms of the agreement, GSI gains exclusive rights to distribute Intershop’s Enfinity enterprise e-commerce software platform and other products in the Americas. It will also act as a global reseller of Intershop’s products on a non-exclusive basis.

The deal allows GSI to offer licensed e-commerce software, instead of just hosting retailers’ site, and opens the way for GSI to serve clients in Europe, says Brian Walker, an e-commerce technology analyst at research and advisory firm Forrester Research Inc. Besides its e-commerce platform, GSI also provides fulfillment, customer service and marketing expertise. Its clients include major U.S. names like Major League Baseball, Calvin Klein and Dick’s Sporting Goods.

But making the partnership work won’t be easy, Walker adds.

“It will be very interesting to see how GSI and Intershop align their technical platforms, business cultures, and business models—while bridging the geographical and cultural divides—to drive value and benefit for their customers,” Walker says. “It is not a small job.”

Michael Rubin, founder and CEO of GSI, and Henry Göttler, a member of Intershop’s executive management team, say they expect the two companies will benefit from each other’s strengths.

“Intershop has built a proven e-commerce software platform for enterprise clients and we look forward to distributing it in the Americas and abroad,” Rubin says. “We believe we can add value to Intershop through our strategic alliance and look forward to being a shareholder. We also expect to gain valuable insights into the European market through this relationship.”

Intershop’s clients in Europe include Otto Group, which is a diversified retail company and one of Europe’s largest online retailers, and apparel retailer Mexx.

Walker says GSI is likely to leverage parts of Intershop’s technology to improve GSI’s core e-commerce platform. He adds that Intershop has a strong reputation in central Europe, particularly in its home base of Germany, and that it has been re-working its technology in recent years to make it less of a developer-intensive platform and consequently easier to deploy and operate for both web-only and multichannel retailers.

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