E-Commerce Solutions

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E-COMMERCE SOLUTIONS

E-commerce solutions are the products and services that help a company conduct business electronically. The range of available e-commerce solutions is vast, including those that allow traditional businesses to design, create, and operate World Wide Web sites. Some solutions focus on a specific problem. For example, a company selling its wares via a World Wide Web site might purchase a bandwidth management solution from a firm like Packeteer Inc. in an effort to allocate more resources to actual commerce transactions than to other applications. Similarly, an electronic merchant who wants to improve the online checkout process for its clients might turn to a specialized vendor like VirtualCart for a shopping cart solution.

As the needs of those engaged in e-commerce have grown more complex, however, the demand for more comprehensive solutions has intensified. As a result, many e-commerce solutions providers now focus on offering a suite of products and services designed to meet multiple needs and solve various problems. According to an October 2000 article in InformationWeek.com , "e-commerce isn't just about transactions anymore. Companies are increasingly carrying out all facets of their businesses online, from customer interactions to extended supply-chain management with trading partners." As a result, "businesses are demanding more than just online transaction support. They need full-fledged E-business, and that means providing a Web site that helps them build relationships with customers-be it in a business-to-business, business-to-consumer, or online marketplace model." Many of the e-commerce solutions upstarts that had emerged in the early 1990s began working to meet these changing e-commerce needs, as did many computer industry giants looking to position themselves as leading e-commerce players.

INDUSTRY GIANTS AS E-COMMERCE SOLUTION PROVIDERS

IBM CORP.

Computer hardware and services giant IBM Corp. began working to recreate itself as an e-business services provider in the mid-1990s. The firm's push into e-business began as early as June of 1995, with the purchase of Lotus Development Corp. The acquisition was meant to bolster IBM's position in the computer software market, as well as allow IBM to offer integrated email, data processing, and Internet services to clients via Lotus Notes messaging software. Within two years, services had become the fastest growing operating unit at IBM, and the firm began working to sell itself as an e-business solutions provider. IBM increased its advertising budget by 21 percent in 1998, aggressively marketing its e-business servers, software, hardware, technology, and services to managers expected to use Internet technology to improve operations. Central to the firm's e-business services was its WebSphere server software, which IBM used to support the e-commerce initiatives, including retail Web sites, of clients. The WebSphere Commerce Suite 4.1 package launched in 2000 included Web development tools and customer categorizing functions that allowed e-business to sharpen future marketing efforts. In 2001, IBM released Web-Sphere Commerce Suite Pro 5.1, a "Java-based, e-commerce solution," according to InfoWorld writer James R. Brock, that provides "an infrastructure for building, deploying, and administering e-commerce sites."

HEWLETT-PACKARD CO.

Founded in 1938, Hewlett-Packard Co. (HP) is second only to IBM Corp. among the world's largest computer firms. Along with manufacturing and marketing computers and printers, HP also sells Web-based hardware, software, and services. In 1997, the firm released an Internet Solutions line, creating the Internet Applications Systems Division to oversee its new products. Two years later, the firm restructured its offerings into three divisions: information tools, infrastructure for these tools, and e-services. In late 1999, HP launched its 9000 N Class server, which was designed to offer Internet Service Providers (ISPs) a comprehensive suite of e-commerce tools, and the Commerce for the Millennium system. By mid-2000, the company had grouped its technology into various e-services solutions packages.

The HP 9000 Superdome server, which allowed different operating systems to run at the same time, was at the core of HP's quest to become the leading computer system supplier for Internet-based enterprises. The firm began marketing its new release to major dot-com businesses in September of 2000. HP's purchase of e-business tools maker Bluestone Software Inc. in January of 2001 allowed the firm to launch 25 software products the following month, including the Netaction e-services development and implementation suite and the OpenView e-services systems management suite. A few months later, HP added 19 Internet server appliances to its growing line of e-business solutions.

MICROSOFT CORP.

The largest software firm on the globe, Microsoft Corp. spent the late 1990s developing its presence in the Internet arena. In February of 2000, the firm released Windows 2000, a version of Windows NT that had taken nearly five years to develop. Windows 2000 was designed to serve as the platform on which businesses, including e-commerce companies like BarnesandNoble.com and Buy.com, could operate. In an effort to compete with IBM's WebSphere server, Microsoft launched BizTalk in December of that year. According to Network World writer John Fontana, "BizTalk is one of the foundation pieces of Microsoft's attempt to recast its Windows operating system and applications as a platform for the Internet. The loosely defined effort is called.Net."

ORACLE CORP.

Microsoft's closest software rival is Oracle Corp., founded in 1977. The firm also competes with Microsoft in the e-commerce solutions arena. Oracle became a major e-commerce solutions provider in 1998 when it unveiled Oracle 8i, a version of its flagship database program that permits a company's database functions to be handled on the Web. The firm also started using other e-business products it had developed to streamline its own operations. For example, Oracle's order fulfillment and shipping networks were blended with its sales network to allow the firm to handle customer service from a single source. In addition, by using a Web-based expense reporting system, the accounts payable department was able to cut its staff by 25 percent and deposit paychecks into employee bank accounts more quickly. Oracle also consolidated the 97 servers and 120 databases running its e-mail system into just two servers and four databases.

In May of 2000, Oracle released its E-Business Suite. According to Forbes columnist Elizabeth Corcoran, "Instead of selling separate packages for sales force automation, accounting, employee benefits and so on, Oracle ties together 70 'modules' in a package and juices them up with Internet technologies." The Oracle 9i software database management system, another product launched that year, included an application server that allowed users to run e-commerce applications related to their databases. In 2001, Oracle 9i helped more than 8,500 firms across the globe manage their data on a variety of operating systems.

UPSTARTS AS E-COMMERCE SOLUTIONS PROVIDERS

Amazon.com The upstart who has, perhaps, had the easiest time developing its e-commerce solutions is Amazon.com. The online retailing giant was simply able to license its already existing, highly successful e-commerce platform, complete with features like its patented one-click checkout, to other e-tailers struggling to move into e-commerce. Toyrrus.com was the first online merchant to use Amazon's technology to power its site when the two firms agreed to relaunch toysrus.com as a co-branded site in August of 2000. Amazon also agreed to take over inventory, customer service, and shipping services. According to the terms of the deal, Amazon receives a base fee, as well as a commission on each toy sold on the site, for allowing toysrus.com to use its software. The deal also proved lucrative for toyrus.com; with Amazon technology underlying its infrastructure, the site saw its holiday sales grow more than threefold. In April of 2001, Borders Online Inc. reached a similar agreement with Amazon, as did United Kingdom-based specialty book vendor Waterstone a few months later. Some analysts believe Amazon's ability to market itself as a full-scale e-commerce solutions provider will be a key factor in whether or not the firm achieves profitability.

COMMERCEONE INC.

Commerce One is an e-commerce solutions provider that got its start in 1994 as a maker of office automation software for banks. Within a few years, the firm had diversified into multimedia catalog development, and it eventually began selling products and services that facilitated business-to-business (B2B) e-commerce. CommerceOne constructs B2B procurement exchanges that allow companies to do business via the Web or some other electronic platform. These exchanges, or marketplaces, allow buyers, sellers, distributors, and suppliers to complete commerce transactions in a single place.

Based on the firm's Market Site Portal software, Commerce One exchanges include auction functionality, which allows clients to solicit offers for their merchandise to get the best prices they can. Along the same lines, reverse auctions allow businesses to collect and compare bid prices for products and services they wish to purchase. Commerce One also offers a procurement software suite known as BuySite, which creates private supply-chain sites for individual companies. BuySite allows purchasers to not only access supplier catalogs online, but it also facilitates the completion of electronic transactions.

To make money off of these exchanges, Commerce One licenses its software and charges service and network fees. It also typically retains a 50 percent stake in the exchanges it creates. Market Site Portals range in price from $500,000 to $2 million; the total cost is determined by the level of work involved in tasks like putting catalogs online, developing search engines, and educating employees. When the site becomes operational, the business or businesses operating the exchange charge the suppliers, distributors, sellers, and buyers who use the site a fee for each transaction completed. An agreed upon percentage of these fees goes to Commerce One.

FIRSTSOURCE CORP.

Firstsource Corp. is an e-commerce solutions provider that started out as an Internet-based reseller of computers and related hardware systems to individuals and small and mid-sized companies. After its purchase by En Pointe Technologies in 1998, firstsource.com, which later changed its name to Firstsource Corp., began eyeing the B2B e-commerce services market. B2B markets were outpacing business-to-consumer (B2C) markets in the late 1990s, and analysts forecasted that B2B sales would eventually exceed $1 trillion. As a result, many Internet resellers like Firstsource began focusing on business clients, particularly those looking to move operations online. According to Computer Reseller News in June of 1999, Firstsource began "repositioning itself as an Internet portal for business-to-business transactions." The firm began offering e-commerce solutions, such as Web site configuration, marketing, staffing, and information technology services to small and medium-sized businesses.

To complement its new service offerings, First-source also beefed up its technology offerings in an effort to provide solutions able to meet all the B2B e-commerce needs of clients. Early in 2000, the firm launched its Firstsource Connect, which designs Web-based purchasing hubs connected to various product distributors for businesses looking to streamline their procurement processes. Eventually, the firm also began licensing inpowr, the platform that powers Firstsource Connect, to businesses wanting to conduct operations online.

BLUE MARTINI SOFTWARE, INC.

Blue Martini Software is best known for its customer relationship management solutions (CRMs). Since its founding in 1998, the firm has carved out a niche in the e-commerce solutions market by offering a comprehensive suite of online merchandising, content management, customization, and transaction services. In 2001, the firm's Blue Martini 4 software won the Crossroads OSA A-List Award for Best Java-based E-Commerce Suite. As stated in a June 2001 article in VARBusiness, "Blue Martini's product vision focuses on online branding and personalization for e-business applications, not just e-commerce sites."

BROADVISION, INC.

Another e-commerce solutions startup, BroadVision, Inc., was founded in 1993. The firm's One-to-One Enterprise platform helps its customers—including Bank of America, E*Trade, Circuit City, Toyota, and Boeing—conduct business over the Internet. The platform includes order processing, transaction management, reporting, and monitoring functions. B2C players can opt for the One-to-One Retail Commerce suite, which automates things like content selection based on compiled customer information. The One-to-One Business Commerce Suite, which is designed to serve B2B operations, automates order processing, contract administration, and customer service. Additional e-commerce solutions include the InfoExchange Portal, which assists with the creation of information portals for businesses; Amadeus Travel Commerce, which allows a Web site operator to offer personalized online travel booking services; MarketMaker, which assists with the creation of online exchanges for specific markets; and publishing, finance and billing tools.