Magic Quadrant for E-Commerce

Transcription

1 Research G November 2011 Magic Quadrant for E-Commerce Gene Alvarez, Chris Fletcher, Praveen Sengar, Sharon A. Mertz Globalization; social and mobile commerce; and site replacements, upgrades and new launches are driving e-commerce product evaluation and selection. Use this Magic Quadrant as a guide during the vendor evaluation and selection process. What You Need to Know E-commerce sales continue to grow. Sales of the top 500 North American retailers grew by 18% to $150 billion in 2010, from $127 billion in 2009 (according to "Internet Retailer Magazine's Top 500 Guide," 2011 Edition).This has piqued interest in many of Gartner's clients who want to increase their overall sales revenue. Additionally, business executives are more familiar with the benefits of online selling, and are seeking to grow revenue via e-commerce, social and mobile commerce channels. This interest has spread to many industries outside traditional online retailing, as the competition for customer attention and mind share demands strong online sales capabilities. Similarly, interest in online shopping has expanded from the consumer world to B2B sectors. Customers have become familiar with online shopping in the consumer space, and they desire equally strong online capabilities for their B2B purchases. E-commerce continues to gain visibility with sales and marketing professionals, CIOs, and other IT professionals as a way to improve sales operations, increase revenue, boost profits, better engage new and prospective customers, and reduce staffing expenses. However, just as some enterprises are breaking new ground in this area, some traditional organizations are struggling to implement critical e-commerce capabilities that could enrich the online customer experience in multiple industries. Additionally, organizations of all sizes are moving online, and the number of vendors offering e-commerce solutions and the number of ownership options (e.g., build, license, host, software as a service [SaaS] and outsource) is continuing to grow. These market factors are driving new investment in e-commerce, as well as the creation of new e-commerce vendors with offerings targeted at taking advantage of this market. Market acquisitions are also expanding the amount of e-commerce capabilities being offered by a single vendor, as clients desire more and more new e-commerce capabilities, such as social and mobile commerce, Web analytics, campaign management, aspects of customer service, distributed order management, warehouse management, and other fulfillment capabilities. This client desire is driving more partnering agreements, because organizations need to assemble all these capabilities to complete their online customer experience and integrate that experience with all the other customer channels. 1-17WU5ZL

2 Users should select a vendor with a proven record of successful e-commerce implementations, deep functional capabilities and an open, Web-services-based architecture. In addition, users should ensure that their e- commerce technology provider: Provides all key commodity e-commerce components, such as shopping cart management, product catalogs and settlement processes required for B2B and business-to-consumer (B2C) e-commerce Provides social commerce capabilities for selling through large social networks, such as Facebook (B2C only; B2B selling via comminutes such as LinkedIn is not available) Provides a Web 2.0 rich Internet application (RIA) customer experience, with shopping tools (such as sliders for search and single-page check-out) and the ability to leverage user-generated content (such as product reviews, wikis, blogs and RSS) Leverages external Web services (e.g., Google Maps, Google Analytics and product reviews) and internal Web services (such as fulfillment systems, ERP or call-center-based Web services) to complete the customer experience Integrates with other points of interaction, especially those that improve and grow quickly, such as smartphones, Web-capable phones and tablet PCs (see "The Impact of Tablets and E-Readers on E- Commerce") Supports multiple forms of payment options for B2B and B2C sales Provides real-time product/service recommendations, guided selling and other capabilities, such as configure, price and quote (CPQ), to help customers find products and service Enables improvements to site search and external search engine discovery (e.g., Google, Bing, MSN and Yahoo) Enables personalization of the overall online experience Offers appropriate ownership models, such as licensed software, Web hosting services, SaaS, outsourcing and open-source software (OSS) Has a large, deep set of technology and service partners 2

3 Magic Quadrant Figure 1. Magic Quadrant for E-Commerce Source: Gartner (November 2011) Market Overview Gartner continues to see strong demand for e-commerce solutions, as demonstrated by an increase in client inquires. These inquiries range from e-commerce strategic planning issues, such as entering new geographic markets and launching new online businesses aimed at a new customer base, to upgrade plans, and integrating mobile and social capabilities. Clients are concerned with these questions: How to get it right? The Web is the primary customer touchpoint, and e-commerce capabilities will become a key foundation of the overall customer experience. How to make money with mobile commerce? Mobile e-commerce is in many organizations' strategic plans for 2011 and How to make money with social commerce? Many organizations have some form of a social presence, and are now seeking ways to drive sales revenue via that social presence. How do we go global? Many e-commerce organizations are going global as they seek new sales in new countries and regions. 3

4 How do I improve our customer experience? Companies want to replace outdated e-commerce systems, improve their online customer experiences and be more competitive. Are other organizations investing? Client inquiries and projects significantly increased in 2009 and 2010, and continue to rise in Other questions involve costs, ROI, multichannel, implementation speed and resources, and so on. The e-commerce vendor market is also changing, as the number of acquisitions since the last e-commerce Magic Quadrant continues to climb. These acquisitions are being driven by organizations' desire for a single vendor to provide as many e-commerce and Web customer experience capabilities as possible as the complexity of e-commerce continues to grow (see "Hype Cycle for E-Commerce, 2011"). Organizations also want solutions that are fitted to their ownership requirements for IT resources, and this is driving e-commerce SaaS, hosted, and outsourced offerings. For example, enterprises generating more than $1 billion in online sales prefer licensed software or to build their websites themselves using commercial and/or open-source development tools, while organizations generating less that $180 million online may prefer SaaS, hosted or outsourced offerings, rather than licensed software or building the websites themselves, based on their IT capabilities. Many organizations consider their websites to be their primary faces to the world, and competition enabled by the Web is increasing in all industries, as organizations look to attract those customers who "Google" themselves. B2B organizations are being asked to be more consumer-like with their Web experiences for their retail and wholesale customers, while B2C organizations continue to vie to capture the consumer's interest for first-time and return business. Industries such as discrete manufacturing, wholesale/distribution, entertainment, telecommunications, travel and leisure, software developers and publishers, publishing, media, healthcare, financial services, and transportation are just some of the new industries that are expanding their e-commerce capabilities. Leading online retail organizations and others have already raised the bar for the online experience by making their sites easy to use, while popularizing new features, such as enabling fan buttons (the "Like" button on Facebook and "Follow Us" on Twitter buttons) to their stores, purchasing directly through Facebook (no need to leave Facebook to make the purchase), and offering mobile applications (on the iphone and ipad, Android devices, etc.). IT organizations are being asked to reduce the time it takes to upgrade or replace existing sites and create new ones, and this has increased interest in site management and multisite capabilities. In addition, IT departments are being asked to deliver and manage new sites in many new geographic regions where site design, payment processes and options may vary beyond those of North America and Europe. As a result of these market trends, we are seeing an increase in e-commerce capabilities being offered by vendors, their acquisitions and new entrants into the 2011 Magic Quadrant for E-Commerce. Market Definition/Description E-commerce technology providers offer an e-commerce platform that enables online sales for B2B and B2C commerce. An e-commerce platform not only facilitates a transaction over the Web, but also supports the 4

5 creation and continuing development of an online relationship. Common e-commerce functions enable organizations to build basic B2B or B2C online stores. Such functions include: Creation and management of Web storefronts Shopping cart management Taxation Personalization Transaction management Settlement Product visualization The next level of e-commerce-specific capabilities include: Interactive selling Site merchandising management Entry and management of large orders containing hundreds or more items in a single order, ordering from sales contracts, and distributed order management Product management Customer/account management (manage and apply unique-customer pricing; management of customer hierarchies; transfer of carts, quotes, contracts and orders to another user of the same account) Personalization/preference profiling Multichannel selling Site/product search Search engine optimization (SEO) Customer community management or participation Integration with social media Mobile stores Campaign management Locator and matching Warranty/returns management Analytics/reporting CPQ Management of certified partners and product entitlement 5

6 Internationalization and multisite management Partner management and product entitlements Payment services and integration to other back-office functions, such as e-procurement Inventory management that enables advanced online selling and relationship building This Magic Quadrant focuses on e-commerce for B2B and B2C across industry verticals, including retail, manufacturing, distribution, telecommunications, publishing, media, and financial services. The product should be able to integrate with applications beyond traditional e-commerce channels to meet the emerging customer requirement to transact across channels with a seamless experience. This Magic Quadrant evaluates the vendors' vision and ability to deliver an integrated digital customer experience. However, this Magic Quadrant does not cover fully integrated marketing, sales and service solutions. Therefore, all functions relating to marketing (such as campaign management, A/B testing and all functions relating to service, such as knowledgebased self-service and call center capabilities) that are sold as unique offerings are not part of this market or evaluation (see "Magic Quadrant for CRM Multichannel Campaign Management," "Magic Quadrant for Web Customer Service" and "Magic Quadrant: Customer Management Contact Center BPO, Worldwide"). Technology providers that offer one or more deployment options for e-commerce, such as SaaS, hosted solutions, outsourced, and service providers with a proprietary offering and/or traditional licensed software, and that meet our inclusion criteria are included in this Magic Quadrant evaluation. Inclusion and Exclusion Criteria Market Traction and Momentum The technology provider: Has at least 50 production customers for e-commerce functionality, each with at least an average of 10,000 transactions per week Has at least five new referenceable customers for e-commerce in the past rolling four quarters, and five referenceable customers that have gone through at least one version upgrade of the application. Has generated at least $5 million in revenue for e-commerce in the past rolling four quarters. Has demonstrated active market participation, including, but not exclusive to, inbound customer inquiries to Gartner customers and prospects. Has multiple production references (a minimum of at least 10) on a current version, and visible efforts to sell and/or market product to new customers. E-Commerce Product Capabilities The technology provider has a generally available, credible e-commerce platform that meets the following criteria: Deployed either on-premises or as hosted infrastructure (with dedicated database, hardware and other infrastructure) or SaaS. 6

7 Supports common e-commerce functions (such as Web storefronts, shopping cart management, product catalog, product information management (PIM), pricing, personalization, transaction management, site and product search, settlement, product visualization, and order management) that enable the selling of products or services over the Internet. These capabilities must be able to service consumers' and business partners' core e-commerce needs, and are designed to foster long-term customer relationships via the Web. Provides operational e-commerce capabilities that can be used for B2B or B2C sales. Delivers value to multiple clients in live production conditions (a minimum of 50 unique clients running at least one production site on the current offering). Short-Term Viability The technology provider has: Sufficient professional services, delivered either internally or through partnerships, to fulfill current and future customer demand during the next 12 months Sufficient cash to fund a year of operations at its current burn rate Added Vendor acquisitions since the 2010 Magic Quadrant for E-Commerce: IBM purchased Sterling Commerce Oracle purchased Art Technology Group (ATG) GSI Commerce and Magento purchased by ebay RedPrairie purchased Escalate Retail icongo purchased by hybris New to the Magic Quadrant: Cleverbridge Jagged Peak These vendors were added for one or more of the following reasons: They demonstrated active market participation including inbound customer queries from Gartner customers and prospects and/or inclusions on the RFI or RFP vendor lists of Gartner clients. They met or exceeded the inclusion criteria set after the 2010 version of the "Magic Quadrant for E- Commerce." Dropped Access Commerce/Cameleon Software 7

8 BroadVision Requisite Software Sterling Commerce Vcommerce Evaluation Criteria Ability to Execute The weightings in this section have not changed during the past year, because client current interest and priorities have remained focused on core criteria. However, edits and additions have been made to the criteria, with an emphasis on functionalities such as order management, CPQ, internationalization, multisite management, partner management, social commerce, mobile commerce, payments and content management. Product/Service: The technology provider must demonstrate the capability to support B2B and B2C operational e-commerce commodity functions, as well as advancements in the product since its last release. The following e- commerce capabilities were considered: Common core e-commerce functions, including the creation and management of Web storefronts, shopping cart management, taxation, transaction management, settlement, and product visualization. These functions enable clients to build an online store, and provide basic capabilities for the online selling of products and services. Interactive site presentation and a rich user experience, which can include RIAs (sliders, carousels, preview tags, etc.), video and mashup capabilities, during the customers online shopping experience. Interactive selling (that is, sales configuration, advisor, guided selling, cross-sell, upsell, promotions, product comparison, recommendations, etc.) provides tools that enable sales assistance and guidance to customers during their online shopping experience. Site merchandising management enables the organization to have a merchant or product/service end user determine the placement, presentation, packaging, pricing and promotion of a product on a website. Order management enables the customer or business partner to track and monitor an order across various back-office systems from a single point in the Web store. It also enables functions such as reordering via a previously placed order, ordering via order templates, entry and management of large orders containing hundreds or more items in a single order, ordering from sales contracts, and distributed order management. Product management, catalog management and PIM capabilities. At a minimum, clients should be able to create, populate and manage a product catalog that customers and business partners can use to shop for and purchase goods and services. CPQ capabilities for customer self-service, to order complex products, ship to order or assemble to order, and services across channels. 8

9 Customer and account management enables an enterprise to manage the customer account information that has been collected, and enables the end customer to manage changes to his or her account. Additionally, for B2B sellers, customer and account management enables the seller to manage and apply customerunique pricing, customer hierarchies, quotes, contracts, orders to another user of the same account and other B2B capabilities. Personalization and preference profiling enables the website experience to be customized by the user or dynamically for the customer. Multichannel selling enables an organization to integrate Web sales and capabilities with other customer points of interaction, such as Web-enabled mobile phones, stores and call centers. Customer community capabilities, which may include product/service reviews and ratings, the creation and management of an online community, integration with established external communities, and the support of wikis and blogs. Site and product search enables the search for and location of products in a Web store during the shopping experience, as well as the location of categories of goods and services. SEO enables an organization to improve its ranking in external search engines, such as Bing, Google, MSN and Yahoo. Lead management enables the enterprise to generate online sales. This capability also enables the capture of customer information for a product or service sale, and then distributes a completed order to a partner for fulfillment. Locator and matching enables the customer to locate stores, dealers or distributors within a chosen area, which can be by ZIP Code or other location information (such as from a GPS) when the site is viewed via a mobile phone's browser or application. This function can be delivered via any Web browser and by mobile applications. Warranty/returns management enables the management of customer returns, and warranty claims and requests, from the moment when the issue begins until its resolution. Analytics and reporting enables functions such as site activity (hits), site errors, uptime, browser types, abandoned carts, viewed products, visit conversion rate, campaign effectiveness, content presented, page design, content "stickiness" and visitor segmentation. Multisite management enables the managing of multiple subsites, brands or markets centrally. Internationalization tools enable multilanguage, multicurrency and related localization tools to adapt to local requirements. Integration capabilities enable the integration to other back-office systems (such as order management, inventory, procurement, Web store, etc.) to support quote to fulfillment and to help clients optimize their processes. Multiple browser support enables the detection of different Web browsers and ensures a consistent experience across multiple Web browsers, including mobile browsers. Mobile commerce provides the ability to create, manage and interact with mobile applications/content, as well as support of mobile browsers and SMS communications. 9

10 Social commerce supports customer interaction, ordering and integration with social media sites of all types. Content management provides the ability to manage Web content and digital assets, and to share those assets across channels. Payments enable the ability to support multiple payment options, and payment with account number or purchase order number. Partner management enables the management of certified partners and product entitlement, and identifies the most suitable partners to fulfill the requirement. Overall Viability (Business Unit, Financial, Strategy, Organization): The technology provider must be stable and demonstrate organizational financial health, as listed in the inclusion criteria above, and must demonstrate an ability to generate sustainable business results in the e-commerce market. Sales Execution/Pricing: The technology provider must have sufficient sales resources and an effective sales strategy to demonstrate its commitment to the e-commerce market. In addition, it must provide global sales and distribution coverage that aligns with marketing messages, and should have experience selling its e-commerce product to the business and IT buying centers. Market Responsiveness and Track Record: The technology provider must demonstrate past innovation to meet a changing market's requirements, as well as a plan for future innovations based on market trends. Marketing Execution: The technology provider must have sufficient marketing resources to communicate a welldefined message as it relates to e-commerce, and must consistently generate market demand and awareness of its e-commerce solutions through marketing programs and the media. Customer Experience: Successfully supported customers are important in this market, so this criterion entails the vendor's assistance and support with launching client sites, and is coupled with support, maintenance and upgrades with the production site: Professional services include providing internal professional service resources, or partnering with system integrators (SIs) with vertical-industry expertise, e-commerce domain knowledge, global and localized country coverage, and a broad skill set (for example, project management and system configuration), to support a complete project life cycle. Customer support includes providing satisfactory and demonstrated (that is, referenceable) prompt service to customers worldwide. The technology provider must have numerous successful implementations, as well as client experiences, to demonstrate its capability to meet client expectations for the product, as well as for clients' personal projects. Operations: The technology provider must demonstrate that it has the resources, organizational structure and experience to effectively and efficiently operate on an ongoing basis (see Table 1). 10

11 Table 1. Ability to Execute Evaluation Criteria Evaluation Criteria Product/Service Overall Viability (Business Unit, Financial, Strategy, Organization) Sales Execution/Pricing Market Responsiveness and Track Record Marketing Execution Customer Experience Operations Weighting high high standard standard standard high standard Source: Gartner (November 2011) Completeness of Vision Criteria weightings have changed since the last Magic Quadrant: Market Understanding was switched from Standard to High, because client requirements are changing along with the need to support multiple business models through integrated e-commerce solutions, the need for scalable e-commerce solutions supporting increasing transaction volume, and the need to align toward disruptive technologies (such as social and mobile). Vendors have been acquiring companies to bridge the gap in their offerings, and we expect this trend to continue. Innovation and Product offerings are also changed from Standard to High, due to rapidly changing customer requirements and vendor ability to constantly innovate and capture them in new releases/product road map. Market Understanding: The technology provider demonstrates a strategic understanding of e-commerce opportunities (for example, new application functionality, either from organic development or through acquisition or customer segments) and ongoing vendor market dynamics (for example, consolidation trends). In addition, the technology provider demonstrates an understanding of the wider implications and the position of e-commerce in a company's CRM strategy, because sales, marketing and service strategies are valuable to customers taking the strategic view. Marketing Strategy: The technology provider demonstrates a clear, differentiated set of messages that are consistently communicated to clients across all channels. Sales Strategy: The technology provider demonstrates a clear sales plan for the product and how it will be executed through various sales resources (such as direct sales, indirect sales, partners and the Web). Offering (Product) Strategy: Technology providers publish "statements of direction" (or the Gartner understanding of them) for the next two product releases to keep pace with the Gartner vision of the e-commerce 11

12 market. Technology and architecture figure strongly here. The vendor must offer a range of e-commerce architectural styles to satisfy different implementation scenarios, such as B2B, B2B and business-to-business-toconsumer (B2B2C) and B2C. The vendor understands major technology/architecture shifts in the market, and communicates a plan to leverage them, including migration issues that may affect customers on current releases specifically, how well the provider has articulated its vision to support mainstream technology, as opposed to a proprietary stack, and a service-oriented business architecture. Business Model: The technology provider has a well-articulated strategy for revenue growth and sustained profitability. Key strategic elements include the sales and distribution plan, internal investment priority and timing, and partner alliances. Vertical/Industry Strategy: The technology provider's capability to articulate how it will service industry-specific needs from a "whole product" viewpoint (that is, from delivered products and services required to gain value from the solution). Included are reviews of the vendor's strategy for delivering product requirements (for example, for retail, distribution, manufacturing, consumer goods, telecommunications, publishing, media, travel and tourism, financial services, and the automotive aftermarket). Innovation: The technology provider must lead this market and, in so doing, provide customers with an innovative solution and approach to service their needs in a complex, heterogeneous environment. Innovation implies a well-rounded and well-considered road map for resolving e-commerce issues. Geographic Strategy: Includes sales, marketing and support for complex global companies, and the ability to launch and support Web stores in new regions with the platform and the vendors or partners support (see Table 2). Table 2. Completeness of Vision Evaluation Criteria Evaluation Criteria Market Understanding Marketing Strategy Sales Strategy Offering (Product) Strategy Business Model Vertical/Industry Strategy Innovation Geographic Strategy Weighting high standard standard high standard standard high high Source: Gartner (November 2011) 12

13 Leaders The Leaders quadrant contains technology providers that demonstrate the optimal blend of insight, innovation, execution and the ability to "see around the corner." These providers lead the market in e-commerce by consistently demonstrating their understanding of emerging technologies, such as social and mobile capabilities, combined with an understanding of globalization. These technology providers offer products that cover core e- commerce capabilities as well as innovative capabilities, and are consistently on clients' "longlists" and shortlists of e-commerce evaluations. Leaders have a record of winning these accounts and delivering customer satisfaction, strong support and professional services, leading to the implementation of a successful e-commerce site. These Leaders also have demonstrated longevity in the e-commerce market, as well as a commitment to new product innovations for Internet sales. In addition, they represent technology providers with the strongest capability to meet Internet B2B and B2C selling requirements. Technology providers in the Leaders quadrant have demonstrated consistent, extensive and durable execution in delivering e-commerce websites at the enterprise level. In addition, the maturity of this market demands that leaders maintain a strong vision regarding the key points that have emerged during the past year, including globalization, mobile e-commerce, social commerce, multiple deployment options and multisite management; the capability to support B2C, B2B and B2B2C selling models; integration with multiple points of interaction, such as mobile, call centers and stores; and support for overall sales, service and marketing in an e-commerce context. Challengers Challengers typically have offerings for a client base that is focused on mainstream and some visionary core operational e-commerce capabilities, and/or a limited number of industries or geographies or a single type of selling (for example, B2C-only sales capabilities). These technology providers have market presence in the e- commerce space, and clients often refer to them on their longlists of vendors. However, these technology providers must improve their company and product vision for e-commerce, by adding new industries, new sales models, B2B, B2C and B2B2C, new geographies or new product capabilities, to be elevated into the Leaders quadrant. Challengers generally have access to R&D capital, highly capable execution models, ease of implementation and deep functionality involving core operational e-commerce, all of which makes them successful. Challengers also can demonstrate some variety of e-commerce implementations across business models and different industries. However, they may not have a wide array of industries and industries covered and are seeking to expand into other industries and support multiple business models. End-user organizations are often concerned regarding the technology provider's ability to deliver at the enterprise level in cases where heterogeneous environments, advanced B2C and B2B selling capabilities, and/or innovative capabilities (such as globalization, mobile e-commerce, social or other emerging areas of innovation) are involved, or where the e-commerce offering isn't the primary focus, because it's part of a larger solution (such as CRM or ERP). This includes offerings with weaker marketing messages, but also products that exhibit the potential to move into the Leaders quadrant by demonstrating strong, new client acceptance in B2C and B2B 13

14 accounts, and by demonstrating the ability to span heterogeneous environments and deliver new and innovative customer experiences online. Visionaries Visionaries apply an innovative, market-leading, and forward-thinking or disruptive approach to e-commerce. Because of this, they also have smaller market shares. New entrants with exceptional technology may appear in this quadrant early, after their general availability release; typically, however, unique or exceptional technology will emerge in the Visionaries quadrant after several quarters of general availability. This quadrant is often populated by new entrants that have new architectures and functionality, or deployment models such as SaaS that haven't garnered a large portion of the market. However, established technology providers that offer new functionality that isn't found in any other provider's offerings also can be considered Visionaries. Visionaries can meet customers' production requirements and have a general availability of at least one year, which indicates that they are more than just startups with good ideas. Technology providers in this quadrant must have customers in production, proving the value of the new functionality and architecture. Frequently, Visionaries will drive Leaders toward new concepts and engineering enhancements. However, Visionaries also can be acquisition targets of Leaders and Challengers. Niche Players A Niche Player technology provider has a small market share and/or a narrow market appeal or specialization with its current customers. Although its solution may be compelling, market adoption/traction is limited. However, these providers surpassed this Magic Quadrant's entrance requirements, whereas other organizations not found in this research were unable to satisfy the entrance criteria. Clients should not infer that the Niche Players perform poorly and cannot meet an organization's needs for e-commerce; instead, clients should realize that these vendors are participating in an extremely competitive market. The Niche Players quadrant contains technology providers in several categories, including: Those that offer an exceptional product limited to a specific end-user community (for example, only B2B manufacturers, or B2C retailers that sell only a specific product type) or to a specific vertical industry (for example, manufacturing only) or that have a limited geographic strategy. Moreover, in some cases, the offering is for a vertical industry within an industry, such as branded high-technology manufacturers or apparel retailers only. Those with new e-commerce products that lack general customer acceptance or market visibility, or proven functionality to move beyond niche status. This quadrant is the starting point for many new entrants in a Magic Quadrant; however, some vendors may be included due to one or more of the above reasons. 14

15 Vendor and cleverbridge This e-commerce provider is a Niche Player, because it is relatively small, and its primary business model is to act as a reseller for its clients, selling directly to consumers as the merchant of record and taking a fee based on a percentage of the transaction value. The cleverbridge SaaS e-commerce platform focuses on the sale of digital products, including SaaS services and downloadable software (such as games, media and software). The vendor is headquartered in Cologne, Germany, and also has offices in Chicago and Tokyo. The vendor's SaaS e-commerce reseller business model enables its clients to deploy a site quickly, typically in a few weeks. Cleverbridge manages the product catalog, transaction processing, payment processing and language/currency management issues for its clients, making it a good match for client companies with limited resources or expertise. The vendor supports digital sales in the U.S. and EMEA, and is moving into the Asia/Pacific region, with a small number of employees. Other globalization efforts include support of PayPal and B2B purchase orders that accommodate konbini (Japanese convenience store) payments and support for billet payment, payment plans and Brazilian-language support. Cleverbridge is addressing social commerce by adding marketing "pay per click" and social media to generate links to customers/contacts and to encourage "likes" on Facebook. The vendor provides a basic, but effective, SaaS e-commerce service for companies that fall within its target markets, and has been fairly quick to incorporate new technologies into its service offerings. The vendor provides a Facebook store and shopping cart application, support for transactions placed via an ipad or Android device, and an in-application mobile ordering process (although this is not a native mobile OS application, and is browser-based only). For example, the company has an ipad order process and an inapplication ordering process that work via a standard browser. The vendor is a relatively small e-commerce provider, with a majority of its customers and focus in North America and Europe. Companies in the Asia/Pacific region should evaluate cleverbridge's local support to ensure that SLAs, customer support, and professional service resources are available. Cleverbridge is focused on the digital product market and, in particular, on software for the consumer and small or midsize business (SMB) markets. It may not be appropriate for companies with products that fall outside of this relatively narrow focus. Demandware Demandware's Challenger position is linked to several key factors: Its pervasive marketing across multiple industries Its status as a SaaS provider of e-commerce and order management services 15

16 Its plans to open its platform to partners and developers Its ties to well-known retail brands Demandware fully supports B2C e-commerce and a growing list of B2B capabilities. Demandware has demonstrated innovation via a fully functional, mobile storefront; an iphone and ipad application; an online store reference application, which includes RIA functions, such as product scrolling and a carousel to speed up site implementations; and the addition of social selling capabilities, such as "shop with a friend," as well as integrations with Facebook, Digg, Delicious and other social sites. Demandware's Link Technology Partner Community offers free, configurable, certified integrations that will be managed by Demandware and its partners. Demandware's Commerce Center (its new merchant interface, which was announced in 2011) provides retailers with one central access point for managing all digital commerce experiences, with user-defined dashboards, tabular browsing, drag-and-drop categorization and other advanced Web-based features. Demandware's Business Manager will remain up and running for established customers. Demandware Labs, an experimental zone for developing and testing applications, innovations and extensions that sit on top of the core Demandware Commerce platform, is specifically involved in digital commerce. Demandware customers that responded to Gartner's RFI cite low startup costs, the ability to run multiple sites under one agreement and direct control of site functionality as key assets. Demandware includes a mobile offering that optimizes sites to mobile Web browsers with its subscription. Clients that require a native application, such as an iphone application on ios, would need to work with Demandware to create the native application using Demandware APIs, which are included in the service. Demandware does not resell or OEM third-party mobile applications. Clients that require or desire mobile functionality from Demandware partners, such as Netbiscuits, would have to procure this technology directly from Demandware partners. Mobile partners in the Demandware Link program will have certified integrations with Demandware, which are also included in the service. Market references surveyed by Gartner stated that the important reasons for disqualifying Demandware were: the vendor's technical architecture was not a fit, the vendor was not viewed as a strategic partner and the service's price (Demandware offers a shared-revenue model). Gartner recommends that companies evaluating Demandware project their costs over a three- to five-year time frame when comparing Demandware with licensed or SaaS e-commerce alternatives. Digital River Digital River provides SaaS B2B and B2C e-commerce services for a range of global companies and brands. Digital River is a Challenger because it focuses primarily on consumer electronics, travel, games and entertainment, and software, and it has branched out to provide services for publishing and digital publishing, and mobile applications. 16

17 The vendor provides broad payment services, including the support of 40 transaction currencies, subscription services and billing, and fraud management services, which are unique among most e- commerce vendors and are also a pain point for many companies trying to expand their e-commerce presence either globally or in digital markets. Digital River provides functionality in emerging e-commerce areas, such as social, mobile, subscription management, payment processing and in-product buying (such as within games, software or digital TV), and is extending its B2B e-commerce capability. Digital River provides a functionally complete e-commerce solution that includes content and catalog management, an integrated store architecture design environment, physical and digital fulfillment of products, subscription management, and a growing range of payment-related services and capability. The company supports simple configuration through its standard feature of guided selling. However advanced configuration, such as configure to order, requires customization. Digital River's expertise and customer base are primarily focused on the sale and delivery of digital goods and services and high-technology goods, and may not be appropriate for companies selling physical products outside of their core industry competency areas. Digital River is a SaaS solution. Clients requiring custom business processes must pay for customized coding, which may or may not be supported by Digital River. Digital River's solution is available with or without fulfillment capabilities, and organizations that want an inhouse solution will not find Digital River to be a strong match for their requirements. ebay GSI Commerce GSI Commerce was acquired by ebay in March ebay GSI Commerce is a Challenger because it provides outsourced e-commerce services to customers in retail, high-technology, digital goods and software industries, and will now have access to ebay's mobile, payment and e-commerce expertise and to ebay's Magento acquisition. The vendor provides a functionally complete e-commerce service platform that includes strong merchant control capabilities with self-service, promotions engine, support for multiple shipment types and social media capabilities, including social, mobile and community capabilities. ebay GSI Commerce provides capabilities to support cross-channel commerce, including features such as in-store pick up, ship from store, social media and mobility, tightly integrated to its promotions and personalization engine. The vendor has improved its globalization capabilities considerably, with core capabilities including multisite management, localization and multiple payment options, and with a growing range of payment-related services and capabilities. ebay GSI Commerce now supports more than 120 countries with local payment types. 17

18 The ebay acquisition of GSI Commerce has strengthened its execution and go-to-market capabilities. ebay provides GSI Commerce with a good installed base of subscribers interested in developing their own dedicated sites. The ebay connection also gives GSI tighter integration to PayPal, a widely adopted and established payment service provider that spans geographies and multiple languages. In addition, ebay's recent Magento acquisition enables GSI to offer multiple options to retailers across multiple market segments. ebay also brings mobile application expertise to GSI Commerce. Organizations that require both B2B and B2C e-commerce will find that ebay GSI Commerce has limited capabilities for B2B e-commerce, because the majority of its customers (about 90%) operate in the retail sector. ebay GSI Commerce invests 23% in R&D, compared with the industry average of 18%; however, Gartner believes that the vendor may rely on Intershop for development of the next version of its core Web store product offering. The vendor relies on Intershop for a portion of its e-commerce Web store product development for its next technology platform (v.11) current platforms are developed and maintained by ebay GSI Commerce. Furthermore, GSI Commerce's road map on its partnership is not very clear after its acquisition by ebay. ebay GSI Commerce competes with Intershop outside of North America, with limited core differentiation in Europe, where Intershop offers its products through multiple delivery options. The vendor offers a revenue share model, which, at times, becomes challenging for organizations as their e- commerce revenue scales up. Elastic Path Elastic Path is a Niche Player, due to it company size and its lack of market visibility outside retail and those enterprises selling digital goods. Elastic Path provides a licensed e-commerce application. The vendor has retail clients and an ongoing strategy that focuses exclusively on vendors of digital products and services, such games, software, publishers, media, telecommunications, and business and consumer services that need to bundle physical and nonphysical/service items into a single order. Elastic Path Commerce (r.6.3.1) provides core e-commerce capabilities, such as order capture, personalization, recommendations, SEO, microsite management, and key management for digital good and services. The product comes with administrative services for site management and rich APIs to integrate third-party applications. The product has good capabilities on digital goods sales, with the ability to customize, offer, sell and capture a complex combination of digital goods and services. The product is available as licensed software. The latest release added price testing, segmentation, bundling and promotion capabilities, integration to social media, and social storefront capabilities. Elastic Path has committed R&D investment that focuses on improving product association and complex digital product configuration, and creating a marketplace to aggregate multiple suppliers and buyers at one location. 18

19 Elastic Path is expanding into Europe and is increasing local support. The vendor is also expanding into Costa Rica, and has an ongoing relationship with Google for offering e-commerce apps on the Google cloud and supporting a hybrid approach. The vendor offers a good mix of vertical-specific offerings, compared with other niche e-commerce vendors, and makes good investments in R&D to support product advancement. In addition, Elastic Path has started a consulting practice on the business issues of e-commerce, such as go-to-market business strategies. Elastic Path has a good set of core e-commerce capabilities. However, when compared with its competitors in digital goods and services, it is currently missing advanced subscription management and digital product fulfillment capabilities. The vendor offers flexibility; however, multiple integrations are required around core e-commerce product capabilities, and it has higher requirements for professional services, SIs or internal expertise, whichever the organization favors. hybris This vendor is in the Leaders quadrant, offering a strong e-commerce product for B2B while presenting an option for B2C. Its customers span vertical markets that include manufacturing, automotive, services, retail and wholesale. The vendor is expanding beyond Europe, and is gaining ground in the U.S. and the Asia/Pacific region. On 23 August 2011, hybris acquired icongo, thus adding icongo order management and warehouse management into its application portfolio. However, the results of this acquisition are not rated in this research, because references using joint hybris and icongo solutions were not available. As with all acquisitions, Gartner will continue to monitor hybris' progress with the integration of icongo, and will rate the joint company's offering in the next iteration of this Magic Quadrant. Hybris 4.4 provides a core e-commerce platform that includes catalog management, PIM, order management, advanced personalization and content management, as well as a software development kit (SDK) to support mobile applications. The vendor also has a technical and reseller partnership with Endeca for advanced search and implementation support (in the U.S.). The vendor offers multiple delivery model options, including licensed, hosted and SaaS models through a partnership with SAP Business ByDesign. The multiple delivery models will also be enhanced by the icongo acquisition. Hybris's offerings are cost-effective, when compared with the average industry deal size for e- commerce. The vendor has a strong product vision, with further improvements planned in customer service, knowledge management, multichannel suite, e-procurement, multichannel campaign management and customer data management, and a prepackaged B2B and B2C offering that reduces implementation time and provides a good starting point for SMBs. 19

20 This vendor has strong products, but is weak in overall sales and marketing. Approximately 70% of its revenue comes from Europe; hybris needs to improve its execution in North America (Endeca's and icongo's resources are aimed at this issue) and in the Asia/Pacific region, by establishing a direct presence in these markets. It has a strong vision and R&D road map, and hybris invests 15% (18% is the industry average) of its annual revenue into e-commerce R&D. However, limited human resources are dedicated to R&D. The addition of icongo's Canadian-based R&D resources can help to correct this in icongo On 23 August 2011, icongo was acquired by hybris. Its rating as a Challenger is based on icongo prior to the acquisition. icongo is a provider of licensed and hosted e-commerce applications. The vendor has had a customer base in B2C, with a focus on footwear, apparel and retailing. More recently, icongo moved into B2B e- commerce, which now accounts for about 40% of its customer base. The icongo E-Commerce Platform (v.9) provides a good set of B2C and B2B e-commerce functionality, including support for rich media, personalization, merchandising and multichannel sales, as well as support for order management, warehouse management and integration with ERP applications. The vendor also provides a microsite management capability that can be used by branded manufacturers to support retail channels and B2B channels for branded selling activity. This capability enables the branded manufacturer to create private-label mircosites for organizations' employee-based buying needs. icongo provides support for multiple languages and currencies; the product is available as either licensed software or hosted as a service. Additional capabilities include pricing and promotion management, and integration with back-end systems. The vendor's order management capabilities supports retail store multichannel integration. The vendor is not a well-known brand outside of its core markets in apparel and footwear. In 2010 and 2011, it brought in outside investors to fund growth in marketing, development and professional services. Mobile and tablet capabilities are limited to browser-based interfaces, which limits the functionality and user acceptance of mobile applications; no mobile SDK is currently available for the major mobile platforms. icongo recently released an SDK to provide more-standardized integration capabilities; however, the SDK is not yet in broad usage, and clients should determine if it can support their integration requirements. icongo customers will be upgraded to hybris over time, as part of the upgrade path for icongo customers. icongo customers that have not implemented icongo E-Commerce Platform should move to hybris e- commerce. Customers with icongo production sites should work with hybris on their upgrade plans. 20

21 IBM WebSphere Commerce IBM WebSphere Commerce is a Leader, having evolved into a larger, solution-based offering that is sold under the banner of Smarter Commerce. Smarter Commerce was launched in 2011 and encompasses four of the top five e-commerce integration capabilities: Coremetrics for Web analytics, Unica for campaign management and marketing, IBM Content Management for content management, and Sterling Commerce for distributed order management and fulfillment capabilities, and its CPQ capabilities. IBM is also embedding Cognos 10 for analytical capabilities across the portfolio. IBM offers a complete set of core e-commerce capabilities and a vision to have a seamless customer experience across channels through integrated solutions for sourcing goods, marketing, selling and service. IBM has the partner base and resources to enable B2B and B2C sales in many geographies. The vendor has production clients who are using IBM WebSphere Commerce social capabilities to drive online sales via communities like Facebook. IBM Global Services gives IBM strong insight with regard to enterprise mobile requirements. Additionally, the vendor will launch broader support for a new set of handheld devices in 2011 (see "Magic Quadrant for Mobile Enterprise Application Platforms"). IBM will offer alternative delivery models through its Smarter Commerce on Cloud solutions for midmarket organizations. IBM Smarter Commerce on Cloud solutions will be available starting in 4Q11. Due to the large number of acquisitions and their timing the road map for product integration for newly acquired products is complex, and the timing of product integrations can impact client plans for taking advantage of these integrated acquisitions. Given the scalability and feature set of IBM WebSphere Commerce, and the number of adjacent technologies available through Sterling Commerce, Unica and Coremetrics, the Smarter Commerce vision and the WebSphere Commerce product can be expensive to deploy, in terms of the financial, technical and time resources required. Because of the number of products offered in the Smarter Commerce portfolio and the number of services required to implement it, an end-to-end Smarter Commerce solution can be expensive. Client references have said that navigating the IBM organization and finding the proper resources for their projects can be challenging. Intershop Intershop is a Niche Player, because of its dependence on two major accounts. ebay GSI Commerce uses Intershop for its core platform and, as such, is an important reseller in the U.S. Also, Intershop has not been able to capture a strong share of the North American market. However, Intershop supports both B2B and B2C e- commerce, with an installed base and revenue across vertical markets. Intershop vertical industries include services, telecom and high technology. Intershop offers multiple delivery options to customers, including managed services and traditional licensed offerings. 21

22 Intershop's Enfinity Suite 6.4 platform provides a functionally rich e-commerce service platform that includes core e-commerce capabilities and improvements in cross-channel capabilities, such as pick up in store and ship from store. The vendor made investments to improve its multichannel, mobile, storefront, merchandising, social media, order management, promotions and discounting, and configuration capabilities. Intershop Mobile Connector supports mobile device detection that enables the formatting and presentation of websites according to the mobile device's native mobile browser. Intershop offers a representational state transfer [REST] API to connect mobile applications; however, it does not have a native SDK to develop mobile applications. Intershop supports social commerce via its Social Commerce Out Of The BOX (SCOOBOX) module. SCOOBOX extends Intershop's Enfinity Suite, providing capabilities that include product ratings and reviews, user profile management, discussion forums, product-related conversations, blog functionality, and integration into external communities such as Facebook and Twitter via a standardized API. SCOOBOX enables merchants to create a complete shopping environment within Facebook. Intershop has improved its R&D efforts, and invests a higher percentage of its revenue in that area, compared with the industry average of 18%. Intershop supports both B2B and B2C e-commerce with referenceable customers across vertical industries beyond retail. Intershop is well-known in EMEA, but has a small customer base in the U.S. and depends heavily on ebay GSI Commerce, which uses Intershop as the underlying platform for a portion of its own e-commerce offering (see ebay GSI Commerce). ebay GSI Commerce owns 26% of Intershop, with two seats on Intershop's advisory board. Gartner believes that this ownership in Intershop could make it a possible acquisition target by GSI Commerce's new owner, ebay, and could have an impact on the product's future road map. The vendor has announced its Intershop v.11 release; however, at the time of this writing, there were no current customers available for reference checks. Clients interested in v.11 should run a proof of concept on v.11 to ensure that it meets their requirements. Jagged Peak Jagged Peak offers hosted e-commerce, order management software, and logistics and distribution support through its distribution centers in North America. The vendor is a niche e-commerce provider, because of its company size, limited geographic coverage and a lack of visibility in the e-commerce market. Jagged Peak provides a B2C and B2B SaaS-based e-commerce and order management solution, as well as integrated logistics and distribution capabilities using either its own facilities or integrating with customer distribution centers or other warehouse management systems. 22

23 The Edge ECP platform supports common e-commerce functions, as well as support for microsites, multichannel order management, multitier pricing, merchandising, content and catalog management, and multiple payment gateways. Capabilities also include SEO tools; an integration layer for integration with ERP, supply chain management (SCM) and CRM applications; and postimplementation services, such as website management, SEO optimization services and marketing program support. Jagged Peak provides support for e-commerce functionality in the U.S., Canada, Italy and Switzerland, but distribution center services are only available in North America. The vendor has identified plans for Asia/ Pacific markets; however, to date, it has a minimal presence in this region. New functionalities, such as support for integration with social sites and social commerce, are not yet available; however, mobile e-commerce was generally available in 2Q11, with one production customer at the time this research was published. Jagged Peak needs to better communicate its vision and technology road map to customers, and the vendor has not developed a broad enough range of technology and global SI partnerships. MarketLive MarketLive is a U.S.-based niche e-commerce SaaS provider, due to its strong focus on midsize retail organizations and its primary U.S. customer base. However it markets its solution as a platform as a service (PaaS) provider (see "Hype Cycle for Cloud Application Infrastructure Services (PaaS), 2011" for Gartner's definitions of SaaS and PaaS). The vendor is a B2C e-commerce provider with a focus on apparel and retailing. MarketLive v.5.9 offers full-feature e-commerce capabilities, such as integrated marketing, multichannel, microsites, and integration to contact center and order management, with advanced social and mobile capabilities with analytics integrated at each level. The vendor offers advisory services to its clients, helping them analyze and benchmark performance regarding customer acquisition, retention and service. MarketLive has reduced the upgrade cost for customers with gradual release management and the flexibility for customers to migrate at their own pace. Most MarketLive customers are on v.5.8 and are migrating to v. 5.9, and modules such as multichannel and mobile are compatible with either version. MarketLive's revenue share model is based on its customers' previous year online revenue, which is intended to help customers manage their plans and for budgeting. MarketLive is more suited for midsize organizations. The vendor offers internationalization capabilities; however, more than 90% of its business comes from the U.S. market, and it has a very limited presence in Europe. 23

24 MarketLive is focused on the crowded retail B2C market, with more than 90% if its revenue coming from the retail sector, and it should not be considered for B2B e-commerce. Microsoft Microsoft is a niche e-commerce provider because Gartner has not seen product advancements since Commerce Server 2009, nor have we seen new customer wins, Microsoft's appearance on longlists or shortlists, and/or activity with partners. Additional information not related to the vendor's rating: Microsoft declined our requests for supplemental information on reference customers, and declined to review the draft contents of this research. Therefore, Gartner's analysis is based on other credible sources, including discussions with Gartner clients (more than 700 in 2010 and more than 450 for 2011, of which approximately 10% directly involved Microsoft Commerce Server); public information, including Microsoft public filings and website information; and Gartner's Magic Quadrant for E-Commerce reference survey of 123 organizations, of which 20 provided information on Microsoft Commerce Server. Microsoft Commerce Server 2009 offers a retail reference application and is a good fit for organizations that like to build their own e-commerce solutions. Microsoft Commerce Server offers core e-commerce capabilities (such as product catalog, personalization, "add to cart" data management and analytic capabilities, among others) that can be used for B2B and B2C e-commerce. Microsoft Commerce Server can require other Microsoft products in order to complete the website SharePoint for content management and portal capabilities, Biztalk for integration to other applications, Silverlight for the development of RIA capabilities, and Fast for search capabilities. Because Microsoft Commerce Server is more of a development environment, it may require a higher set of development resources. Because of this issue, Microsoft provides a list of trained Tier 1 system integrator (SI) partners; however, Gartner believes that the two most-active trained Tier 1 SI Microsoft Commerce Server partners are Ascentium and Avanade. Companies that disqualified Microsoft Commerce Server listed "technical architecture was not a fit" and "poor response to RFP or poor presentation of capabilities" as their No. 1 and No. 2 reasons for not selecting Microsoft Commerce Server. MICROS-Retail Fry MICROS-Retail Fry is a niche provider of e-commerce because of its limited product vision (when compared with the market) and its low R&D investment. MICROS Systems' focus is primarily as a point of sale (POS) terminals and cross-channel retail solutions provider, with e-commerce being a small portion of its overall business. MICROS Systems is the parent company of MICROS-Retail, of which Fry (and CommercialWare and DataVantage) is a part. This vendor profile will focus only on the MICROS-Retail Fry Open Commerce Platform product. 24

25 MICROS-Retail Fry has the support of MICROS Systems, which is an established and profitable provider of POS and retail solutions; it has a global presence, 4,700 employees, and has customers in hospitality, entertainment, and retail. MICROS-Retail provides a broad range of solutions for retailers, including POS, e- commerce, order management, CRM (e.g., loyalty, promotions and clientele management), product management, logistics and cross-channel management. The Open Commerce Platform has a complete set of B2C capabilities and is available in either a licensed or hosted model, as well as in a multitenant SaaS model for smaller customers. The vendor also provides professional services to assist with implementation and custom development. MICROS-Retail Fry is predominantly a B2C product, with 35% to 40% of its customers having e-commerce business greater than $50 million in online revenue. It leverages MICROS Systems' global presence in the international market, and is also expanding into the B2B space. The Open Commerce Platform provides a high level of flexibility, but this approach can also require a variable amount of professional services or technical resources to field a complete solution. Integration with other MICROS Systems and MICROS-Retail products is often delivered on an implementation or custom basis. Clients considering Open Commerce Platform along with other MICROS Systems and MICROS-Retail capabilities should ensure that they understand their requirements, and any integration points or interdependencies that are involved. MICROS-Retail Fry makes limited investments in R&D (8%), compared with industry peers (at an 18% average). However, the vendor's service organization contributes to R&D, and this is not part of the 8%. Additionally, MICROS-Retail Fry is and behind other players in overall market vision around social and mobile, with major capabilities such as Facebook Store, native mobile applications and ipad support planned for the next release. NetSuite NetSuite is a Visionary vendor because it provides SaaS CRM and ERP, including financial services and e- commerce at a relatively low price, which targets the SMB e-commerce market and departments or divisions of large enterprises. NetSuite's customer base for e-commerce is mostly in the SMB market and departmental e- commerce initiatives within enterprise organizations. NetSuite has grown rapidly during the past five years, and continues to build its customer base, and its channel and technology partnerships. The vendor has seen rapid adoption of its e-commerce offerings within its core base of customers, particularly in branded manufacturing. NetSuite's primary focus is on financial management systems (FMS) and ERP, but its e-commerce capabilities are appealing to companies that have standardized on NetSuite. Reference customers have commented favorably on the tight integration between e-commerce and FMS/ERP, and on the vendor's technical support. 25

26 Its e-commerce offering provides a broad range of capabilities, including content management, shopping cart and check-out facilities, order management, inventory management, warehousing, and multichannel management. Its globalization capabilities include language and currency support (12 languages and more than 170 currencies), tax calculations, and shipping and customs documentation. NetSuite also offers a low, all-inclusive pricing approach, which is appealing to startups. Most NetSuite accounts use the e-commerce platform with CRM, ERP and FMS applications. However, clients can run the NetSuite Ecommerce Platform and sync product data from current ERP systems into its product catalog. The NetSuite Ecommerce Platform can be inflexible, and some processes, such as check-out, lack flexibility and have to be modified through custom development. NetSuite has not provided an e-commerce technology road map for implementation and upgrade planning beyond the next release. Also, feature upgrades, particularly for e-commerce, are not delivered consistently. Oracle ATG Oracle ATG is a Leader because it has broadened its e-commerce capabilities with multisite management, a broader range of mobile devices supported and other additions, as well as because it has experienced steady growth in revenue, market share and market visibility. Oracle made the announcement regarding its acquisition of ATG in November 2010 (and will be referred to as Oracle ATG in this Magic Quadrant); this has helped ATG with additional sales, marketing, R&D and global partnerships. Oracle's acquisition of ATG will yield benefits for both enterprises: ATG provides Oracle with a scalable and feature-rich e-commerce product for B2C and B2B applications, while Oracle's global sales and support presence, technology and SI partners, and technical resources will serve to extend ATG's capabilities, and will make ATG accessible to a broader range of global customers. Oracle ATG's latest release, Oracle ATG Commerce 10, provides several important enhancements, including multisite management, cross-channel campaign management and support for a broader range of mobile devices, with the addition of merchandising (including updates to the user interface) and promotions applications. Oracle applications (such as Siebel Enterprise Marketing Suite, Siebel Contact Center and Service, Oracle Retail, and Oracle Order Management) augment Oracle ATG's capabilities with both horizontal and industryspecific functionality. As is typical of enterprisewide deployments, Oracle ATG implementations can be lengthy, and can require significant financial and technical resources. Therefore, Gartner believes that Oracle ATG could be more suitable for clients deploying larger-scale sites that support complex and high-volumes transactions. Oracle ATG will now actively sell two e-commerce solutions for clients: istore and Oracle ATG. istore will be offered to B2B Oracle E-Business Suite (Oracle EBS) clients, and Oracle ATG, which is the lead product, will 26

27 be sold to organizations with other Oracle products, including EBS, as well as to non-oracle prospects. Oracle ATG has not publicly announced its product integration plans, and some ATG products may be replaced by Oracle products, causing clients to upgrade to Oracle products over the long term. Clients should speak with Gartner and Oracle directly to address specific questions on product integration plans. Gartner believes existing ATG customers may see upward pressure on pricing, particularly for annual maintenance, as Oracle brings ATG licensing in line with standard Oracle pricing. Oracle istore With the acquisition of ATG, Oracle is fielding two distinct e-commerce products, Oracle ATG and Oracle istore. Oracle istore is positioned as a Challenger, because it is used predominantly in B2B environments and in a small portion of B2C environments. Additionally, istore is activity sold to Oracle EBS customers only, due to its strong integration with EBS. Oracle istore should be considered by Oracle EBS clients, while clients running other Oracle products, such as Oracle Siebel should consider running Oracle ATG. Oracle istore R12 provides deep integration with Oracle EBS applications, including Oracle Configurator, Oracle Order Management and Oracle Advanced Pricing and Quoting. Reference customers have commented on the rapid deployment possible with istore, particularly for B2B implementations that have more limited user interface and customization requirements. This integration also enables better customer experiences by enabling customers to view order or inventory information and enabling cross-channel selling. It also eliminates data redundancy by providing a single data repository. Oracle istore offers one-click shopping list management, which helps with replenishment buys and uploading spreadsheets. Cart navigation enables users to add items to the cart while remaining in the product catalog (otherwise known as persistent cart functionality.) The offering also includes pop-up dialogue boxes that offer more information on a selected product. Future plans include adding Fusion components to the istore user interface (e.g., carousel mechanisms), Web services and integration with Oracle Universal Content Management. Oracle istore is appropriate primarily for B2B interactions, born out by the installed base, which is 80% B2B and focused on the high technology, communications and manufacturing industries. The user interface is basic, there is no native mobile client and there are no plans for integration with social software. Oracle's positioning for istore is not entirely clear to all of Oracle's customers; several reference customers commented on the lack of a product road map or technology vision, a perceived lack of clarity involving Fusion and its potential impact on istore, and the uncertainty involved in investing in Oracle istore e- commerce in the wake of ongoing acquisitions. RedPrairie Escalate Retail RedPrairie Escalate Retail is a niche vendor because of its e-commerce offerings' low revenue, in comparison with the rest of RedPrairie's products, and the vendor's lack of visibility in the e-commerce market. RedPrairie 27

28 Escalate Retail's product line has several modules, including e-commerce, order management, logistics and supply chain services. The vendor sells primarily to five vertical industries: retail, grocery, consumer packaged goods, food and beverage, and discrete manufacturing. The vendor's broad product line provides several offerings to retailers, and its combination of supply chain, logistics, third-party logistics, warehousing and other key functions could be very appealing to prospective customers. Its Store Center portal (available in v.11) gives store employees e-commerce capabilities within the store, but in a format that the employees can use. This is a thin-client version of the site for the employee (pricing and availability have not yet been determined). Cross-channel loyalty (also available in v.11) ties loyalty across channels, including social sites, and also supports point-based systems, such as points acquired via Facebook "likes." RedPrairie Escalate Retail currently offers thin-mobile Web clients, native hybrid applications that encase a mobile Web version, as well as the ability to create native mobile clients using the Web service manager, which exposes business logic to a variety of client devices, such as ios, Android and Windows Phone 7. The vendor's $325 million in revenue speaks to its established, profitable and stable position, but e- commerce is estimated to account for less than 10% of total revenue. The current RedPrairie Escalate Retail installed base is on version 10 or older; customers seeking to use v.11 should ask for v.11 reference accounts as part of their RFP process. SAP SAP is a Challenger e-commerce provider. It has announced plans to support two e-commerce offerings, including its established Web Channel Enablement product and the newly launched Web Channel Experience Management. Future innovation and investment will be centered on SAP Web Channel Experience Management. The vendor's Web Channel Enablement installed base is primarily B2B e-commerce, with a small percentage of B2C clients. However, its new Web Channel Experience Management product increases the vendor's capabilities for B2C e-commerce. SAP will continue to support Web Channel Enablement until all SAP CRM customers upgrade to the CRM 7.0 Enhancement Pack 1. SAP has an international presence, with an installed base in ERP and CRM markets, and it supports B2B with improvements for B2C e-commerce in SAP Web Channel Experience Management. SAP's Web Channel Experience Management product will have a common e-commerce, e-marketing and e- services user interface for B2B and B2C e-commerce, so the underlying functions (like product data, analytics and pricing engine) can be shared across sites. 28

29 SAP's Sybase acquisition will support mobile commerce and multiple deployment options involving mobile capabilities. SAP is also leveraging other assets, such as High-Performance Analytic Appliance (HANA), and is building use cases around SAP Web Channel Experience Management. The vendor is offering prepackaged Web channel templates as part of its Rapid Deployment Solutions program, helping customers to start quickly on a fixed-fee, fixed-scope Web channel product. SAP is challenged by its lack of clarity in communication: It offers two different e-commerce products, although both leverage the same back-end system (i.e., SAP ERP or SAP CRM). The vendor will continue to support SAP Web Channel Enablement for existing customers (no timeline was available at the time of this research). However, all future functionality and innovation will occur in the SAP Web Channel Experience Management product. Existing SAP Web Channel Enablement customers with B2C requirements will have to migrate to a new product if they want to catch up on latest functionality, like mobile, social and crosschannel. Due to multiple dependencies on underlying SAP platforms, customers have to upgrade their ERP/CRM platforms to take advantage of the latest release. SAP customers should plan to move to SAP Web Channel Experience Management over the long term, once they have deployed CRM 7.0 Enhancement Pack 1 or SAP ERP ECC6 Enhancement Pack 5. SAP Web Channel Enablement offers limited product functionality, compared with the Leaders in the e- commerce market. The vendor's integration with third-party products has been challenging, although the process will be improved with the new SAP Web Channel Experience Management. Venda Because of its global e-commerce SaaS offering, Venda is a Visionary, with a presence across the U.S., Europe and the Asia/Pacific region. The vendor has a customer installed base presence in B2B and B2C, with a focus on vertical industries, such as retail, telecommunications, media and government. Venda offers core e-commerce functionalities, such as full-feature capabilities, including merchandising, multichannel, mobile, social, content management, order management, customer service, fulfillment and marketing, with a global support infrastructure. The vendor typically works with customers that have $50 million in e-commerce volume, with a few customers above that range. Venda has a good vision that is supported by its strong commitment to R&D, with improvements planned in mobile, social, cross-channel, merchandising and security in the Venda e-commerce platform. It is also working on building APIs for third-party integrations and on social capabilities, such as Facebook check-out. Venda offers fixed monthly subscription pricing with an additional per-transaction fee depending on the module, which includes an assigned e-commerce advisory professional. Additional partner services (such as client-selected search products [Solr is included with the service], a content delivery network [CDN], , mobile commerce and behavioral merchandising) are priced through Venda, and may be offered at a lower price than if directly purchasing the service from a partner. 29

30 Although Venda offers good products, it should improve its sales and marketing to compete with others in this market. However, it is slowly developing relationships with larger SIs to improve its go-to-market capabilities. Due to Venda's strong focus on the retail vertical, it might not be a proper fit for organizations outside of retail. Volusion Volusion is a niche U.S.-based e-commerce SaaS provider, because more than 95% of its business comes from U.S. customers in the retail SMB market. Volusion has opened an office in Europe to expand in international markets. The vendor has good customer presence in B2C, with a business across vertical industries like retail and services. Volusion is good for startups and departmental e-commerce needs, with v.11 having capabilities such as product management and merchandising management, SEO, marketing, cross-channel campaigns, and multisite management, with site administration tools and site design capabilities. Volusion also offers built-in features, such as Fraud Score, Social Store Builder and mobile commerce, and add-on services and products, such as Secure Sockets Layer (SSL) certificates, domain names, design services, merchant services and marketing services. The vendor's pricing is a monthly fixed subscription fee that starts at under $20 per month, and also includes additional services, like a CDN and reviews and ratings, as part of each monthly plan. Volusion is more suited for SMBs with online revenue of up to $10 million. The vendor's R&D investments are lower than those of its industry peers. The vendor is new to the international market, and has limited technology and SI partnerships, in comparison to others in the same category. Volusion has historically been a slightly closed system, with the vendor developing adjacent capabilities (e.g., search and ) internally, rather than developing APIs or integration with partners. Volusion is planning to launch a new API platform to integrate third-party applications and services, but this is not planned for general availability until early Evidence 2010 and 2011 Gartner client inquiries 2011 Magic Quadrant for E-Commerce Gartner client and vendor reference customer survey 2011 vendor interviews and survey 30

31 Research conducted by Gartner's secondary research organizations Public information, such as U.S. Securities and Exchange Commission (SEC) filings, press releases, vendor websites and e-commerce Internet industry publications, such as "Internet Retailer Magazine" Vendors Added or Dropped We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor. Evaluation Criteria Definitions Ability to Execute Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products. Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure that supports them. This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. 31

32 Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements, etc. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Completeness of Vision Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision. Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Business Model: The soundness and logic of the vendor's underlying business proposition. Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals. Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market. 32

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