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A Hayneedle exec says he can foresee benefits coming from vendor consolidation.
E-commerce technology vendors are consolidating at an increasingly rapid rate, with more than 1,200 marketing technology acquisitions taking place since 2008—more than half of them within the last 18 months, according to investment advisory firm Petsky Prunier. The 333 year-to-date transactions in 2011 are nearly equal to the full-year total of 338 in 2010.
Emerging from the acquisition spree are larger e-commerce technology providers poised to offer e-retailers a range of services under one umbrella, with the vendor taking responsibility for integration and ongoing maintenance. That appeals to many e-retailers, including Hayneedle Inc., No. 77 in Internet Retailer’s Top 500 Guide.
Steven Dee, Hayneedle’s chief technology officer, all but winces at the prospect of having to integrate and maintain multiple disparate systems for each feature the retailer deploys across its more than 200 niche e-retail sites. He says the e-retailer leans heavily toward selecting the technology it views as best serving its customers, but might favor a product that’s easier to integrate with Hayneedle’s existing systems than another vendor’s tool that is only marginally better. “The hardest part of any implementation is the integration,” Dee says. “While having the variety is nice, if I can avoid doing that integration I’ll do that. I’d love for that to be somebody else’s problem.”
The promise being made by such companies as IBM Corp. and Oracle Corp., both of which have bought e-commerce technology vendors over the last two years, is just that—they’ll handle the complex technical challenges of selling online so retailers can focus on retailing.
Dee says Hayneedle, already an Oracle client for its order management and accounting services, might add more Oracle services that stem from that company’s $1 billion acquisition of e-commerce services vendor Art Technology Group Inc.
In January, Oracle began telling clients its plans for combining ATG and Oracle. Since then, Hayneedle’s existing Oracle representative and an ATG representative have visited Dee at Hayneedle’s headquarters and pitched him on ATG’s services. Dee says he left the meeting impressed, but made no commitments. “The major components were very well thought out, but they couldn’t really get into the weeds with me. But it made it easier for me to say we should continue investigating this,” he says.
Dee says working with fewer vendors and being responsible for fewer integrations and less ongoing system maintenance would free his own team to focus more on tasks that will improve the experience customers have at Hayneedle sites. He says, for example, that he’d like to pay more attention to building out Hayneedle’s mobile commerce program and to make his team more proficient with HTML5, an emerging Internet coding language.
“We want to focus on how we allow our customers to find the product that is right for them,” he says. “We’re not integrators. We lose some competitive advantage when we have to focus differently.”