Posted by Brian Walker on May 12, 2009
by Brian K. Walker
On Monday, ATG announced the relaunch of their on-demand product, now called ATG LiveStore. This marks ATG’s second real focused attempt at an on demand solution. To recap, here are some of the challenges* represented by the earlier product:
- Rocky implementations with missed commitments around time and cost.
- A reliance on ATG professional services, often with middling results.
- Account management and issue resolution challenges, typically identified with poorly prepared or seasoned resources.
- Lack of flexibility in the application.
- Costs, especially when balanced with the on-demand value proposition.
As a result, ATG appropriately took the product back into the garage for some much-needed tuning. With this relaunch there are a number of areas which represent promising opportunities for customers, and challenges to ATG’s competitors in the on-demand solutions space. I was fortunate to receive a briefing on the new product recently, and want to share of the highlights and my thoughts:
- ATG LiveStore represents a “reference application” of the ATG suite, tuned to the needs of a midmarket eCommerce retailer. The aim is to reduce complexity, minimize implementation time, and improve quality of the implementations. This should also improve account management; if indeed the clients remain largely on standardized implementation foundations.
- With ATG LiveStore, ATG is offering flexibility over time to move between hosted software-as-a-service (SaaS) and on-premise licensed models, in addition to flexibility around payment models for use of the software. This flexibility is a great thing for the maturing midmarket online retailer whose needs may change markedly over time. And in a twist, ATG will be offering SaaS credits toward licensing. In a “lease to own” type model, ATG will be offering clients the ability to accumulate credits through the SaaS solution toward a license option later.
- ATG Livestore comes with the BCC module, and by taking advantage of the preconfigured implementation of the management tools clients will simplify what may otherwise be an overly complex and issue-prone implementation process.
- ATG is partnering with AT&T to provide the hosting backbone and scalability. This will largely be transparent to the client on the product, but based on the infrastructure and managed hosting processes, should help to drive stable and scalable environments for their clients.
- ATG is quoting four- to six-month implementation timelines on the ATG LiveStore product. I expect these may end up being shorter once the ATG team is practiced. This will enable more seasonal flexibility for ATG and its clients, and is much more competitive with other midmarket and enterprise on-demand solutions.
This all represents some great progress for ATG and their prospective clients, but here are a few things which I think still need to be ironed out or examined by potential clients:
- I believe that ATG and its key competitors in the on-demand space need to drive down their implementation fees to the $200K range in order to really present an opportunity for midmarket retailers, and to keep eyes from wandering to open source and other marketplace alternatives. ATG is still not there, nor are its key competitors.
- ATG has three different editions of the ATG LiveStore product — which include call center, optimization services, or both. I believe this is a bit too confusing an approach (as in, maybe just a little too Vista-like). I believe a client interested in the product would absolutely want to bundle the optimization services in order to benefit from the automated merchandising features integrated into the product. It is also likely that the customer service modules will be important, and this represents a differentiator with the ATG product in the market.
- Hosting costs remain at a premium for the midmarket online retailer. I expect ATG (and AT&T) to work on managing this down in response to market feedback.
- Timeline expectations around a 4 month implementation project need to be managed carefully. This 4 month timeline assumes requirements and customer experience are already defined, which is typically not the case. It also assumes the retailer is sticking to the basics and not requiring customization. This is an issue not only for ATG to manage - but industry wide – in order to build credible, successful, reference-able client engagements.
Also on Monday, ATG announced a new release of the ATG Recommendations product. While many of the enhancements to the product represent features present in many of the competitive products, I think the key highlight there is its exposing of data through is Adobe Flex/Flash application programming interfaces (APIs) to enable Flash devs; these will integrate dynamic product recommendations and product data into Flash apps and rich content presentations. This is a nice feature we will likely see other recommendations vendors mimic quickly.
I hope that provides some perspective on the product, from our point of view. Forrester clients, please remember you can ping me through inquiry anytime to discuss these (or other) solutions which you may want to learn more about - or get help with - in the evaluation process.
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* This is based largely on interviews of customers of the earlier ATG on-demand solution.