New Face Of E-Commerce - InformationWeek
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7/23/2004
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New Face Of E-Commerce

For Amazon and eBay to grow, these hubs of E-commerce need to open their Web sites to a community of developers who will give their customers the tools they demand.

Amazon.com Inc. remains as protective as ever of the technology that powers its Web site. "We don't go into detail about what our underlying infrastructure looks like," says chief technology officer Al Vermeulen. At the same time, though, Amazon is throwing open its site to outside programmers, providing access to databases and features that have taken years and something approaching $1 billion to develop over nearly a decade. "We're going to go full bore in exposing all of our platform," Vermeulen says enthusiastically.


Amazon is going 'full bore in exposing all of our platform,' says chief technology officer Al Vermeulen.

Amazon is going "full bore in exposing all of our platform," says chief technology officer Al Vermeulen.

Photo by Andy Reynolds
Why secretive one minute but open the next? Amazon has figured out that all that bottled-up intellectual property becomes even more valuable once outsiders get their hands on it. Two years ago this month, Amazon took its first step to create a "programmable Web site" when it launched Amazon Web Services 1.0, a set of APIs that provide third-party programmers and fellow retailers with access to some of its data and basic Web-site functionality.

The idea proved such a hit that more than 50,000 programmers have signed up. Within the next few weeks, Amazon will introduce Amazon Web Services 4.0, which opens its data fields even more.

Amazon and eBay Inc. have cemented themselves as hubs of commerce when it comes to consumer online shopping. Now they're emerging as hubs of software-development activity, where openness breeds innovation and innovation generates sales. "We think Web services feeds directly into making that flywheel spin faster," Vermeulen says.

Last year, eBay took a small, invitation-only developer program that had been operating since 2000 and opened it to the public, making the API to its E-commerce software available for download and supplying a software development kit for it that works with popular developer tools from Borland, Microsoft, and companies that build tools based on the Java programming language.

Today, around 8,000 companies or individuals have become members of the development program, and about 600 applications built by independent developers use eBay's servers. One billion times a month--more than 30 million times a day--an application makes an XML hit on

eBay's database. Attendance at the company's second annual developers' conference, held last month, jumped to 500 from 200 a year ago, and CEO Meg Whitman gave the keynote address for the first time.

Amazon and eBay, in turning themselves into software-development hubs, are once again expanding the possibilities--and increasing the pressure--for any company that wants to be a center of E-commerce. As Amazon and eBay popularize the use of programmable Web sites, other E-businesses might find they, too, want to open their Web sites up to a community of developers--be they independents, or programmers from customers or business partners who want to add their own innovations to a site. "There's no reason we can't have thousands of developer communities for thousands of different Web sites, even on a small scale," says Jeff Barr, Amazon's technical program manager. Other businesses will find the hard part isn't exposing the inner workings of a site as Web services but establishing a business model that works with it. "There has to be real sound financial return for doing these things over the long term," he says.

Google Inc., the search-engine powerhouse that's preparing for an initial public stock offering, publishes on its Web site an API that lets users write applications that incorporate Google's search engine. The company doesn't have formal developer programs like eBay and Amazon do, but it's a start.

EBay needs to open up to outside developers, Oddcast's CTO Gil Sideman says.

EBay needs to open up to outside developers, Oddcast's CTO Gil Sideman says.

Photo by Andrew Hetherington/Redux
Oddcast Inc. is typical of the kind of company that's helping to make eBay a hub of development. The 5-year-old software company develops interactive characters that act as Web-site guides for clients such as Coca-Cola, Intel, and McDonald's. Last month, it started selling an online capability called "publish to eBay," so someone can license Oddcast's VHost SitePal software and design an online character that's published directly to that person's eBay auction site. "Never in a million years would this have been developed by eBay for its customers," Oddcast CTO Gil Sideman says.

Oddcast's software lets companies talk to would-be customers through their animated characters. Using a recording mechanism or text-to-speech software, an eBay retailer can have an avatar pitch customers about what promotions are available. Oddcast hosts the software that runs the animation on its servers. So far, a few dozen companies have signed up for the service.

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