Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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—On-demand commercial, hosted and supported by a platform provider, also known as software-as-a-service, or SaaS
—Vendor-hosted, full-service operation, including customer service, marketing and fulfillment
Pros and cons
Each of these e-commerce platform options has its pros and cons, experts say.
Licensed commercial software, for example, can provide more flexibility in letting a retailer customize its own graphical design and user interface, though at a higher up-front cost than an on-demand platform.
A licensed platform managed and hosted by a vendor can remove the headache of having to invest in and maintain a retailer’s own server infrastructure, including the challenge of recruiting and retaining skilled staffers, but a retailer should ensure that it maintains ownership of and access to its data center.
Before a retailer decides to replace its e-commerce platform, however, it should first take a hard look at whether its existing technology can meet its needs, Mirabito says. “People put too much hope in new technology as if it’s a panacea,” he says. “I see retailers move from platform to platform every few years, thinking that if they just had the right technology they could do more things with it. But just switching platforms doesn’t necessarily solve a problem.”
Bang for the buck
The key to getting the most out of technology, he adds, is to work with a platform that offers a flexible toolkit for making adjustments to improve functions like personalization and order management. But it’s also key, he says, to dedicate sufficient staff to identify problems and come up with new ways to use that toolkit.
When Forrester asked retailers last December about their plans for investing in specific types of e-commerce technologies this year, the most common application mentioned was web analytics, cited by 56% of respondents, followed by product recommendations/personalization applications, cited by 55%; web content management, 47%; and site search, 46%.
In a separate poll about retailers’ plans for social commerce features on e-commerce sites, Forrester found the most popular to be customer reviews applications, cited by 35%, followed by RSS feeds of product offers to customers, 32%; social tagging, which lets customers attach descriptive keywords to web content, 28%; and a retailer-monitored blog, 26%.
With more retailers in the market for new e-commerce technology, it’s no surprise that they also are seeking skilled personnel that can make use of these new systems.
FitForCommerce notes that it has seen a noticeable increase this year in job openings among its online retailer clients. “This,” Wu says, “can be viewed as a harbinger of additional technology spending to come.”