InformationWeek
Defining The Business Value Of Technology
September 13, 1999
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Choosing the right commerce-server vendor is a critical decision
By Norbert Turek
Commerce servers include sell-side products, which let businesses sell to consumers and other businesses over the Web, and buy-side applications, which let businesses order from suppliers. Forrester Research estimates that the market for sell-side commerce software, the focus of this article, will rise to about $300 million this year, from $113 million in 1998, and soar to $1.4 billion by 2002.
The growth is being driven by the rapid increase in online purchasing by businesses and consumers. Forrester forecasts that business-to-business commerce over the Web will reach $1.3 trillion in 2003 and that online sales to consumers will reach $108 billion the same year. The research firm also predicts that 98% of companies with more than 5,000 employees, and 85% of those with 1,000 to 5,000 employees, will be selling online by 2002. Since each company must consider the best way to take advantage of the Internet, choosing the right commerce server is a pressing issue for many IT departments.
The first commerce servers, introduced just four years ago, mainly handled transactions and taxation, and linked to order-fulfillment systems. Today, products are differentiated by cost, ease of implementation, ability to integrate with enterprise resource planning and other back-office systems, and, perhaps most important, personalization features.
Many companies are looking for commerce servers and related applications that let marketing departments dynamically change Web content and that can capture visitor profiles, identify users, and present products personalized for individual customers. The goal is to develop one-to-one relationships with customers to win their loyalty and cut the high cost of acquiring new customers.
Sell-side commerce server vendors fall into two groups, according to Erica Rugullies, director at Giga Information Group: platform and toolkit providers, and packaged application providers. Platform and toolkit products offer design flexibility, but they're expensive to implement. Packaged products often come with rich features and are inexpensive and easy to implement, but it's often difficult to add features.
Platform And Toolkit Vendors
IBM
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ith the growth of E-commerce has come an explosion in the demand for commerce servers, software that manages the presentation of products and handles secure transactions. Dozens of vendors--large and small--have jumped into the rapidly growing market, complicating the decision about which product to use.
With the platform and toolkit approach, less than 20% of the cost of setting up a commercial site goes to commerce-server software fees. The remainder is spent on development, integration, and third-party applications. This approach is best suited to large companies that want a greater degree of flexibility than packaged applications can provide and that have a large staff of developers to create and develop the site. Here's a closer look at the leading platform and toolkit providers.
In September 1996, IBM introduced its first products and services to support end-to-end electronic buying and selling on the Web. Today, nearly 10,000 Web sites are powered by IBM commerce servers. While it still has only a modest 2% market share, according to Dataquest, sales of its commerce server products are growing at better than 100% a year.
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