Over the past four years, the commerce technology market has undergone significant consolidation. Commerce technology is now table stakes for any enterprise software vendor with a focus on systems of engagement. Consequently, Forrester has observed an unprecedented chain of mergers and acquisitions (M&A) in this space over the past four years with eBay, IBM, Oracle and SAP alone, having spent in aggregate over $10 billion on commerce related acquisitions. Furthermore venture capital and private equity firms have been making big bets in this space. Between them, Shopify, Volusion and Big Commerce have accumulated $337 million in funding in the past few years, while Siris Capital Group are set to shortly complete their acquisition of Digital River for $840 million. Beyond these headline transactions, dozens of smaller deals have been done, with vendors including Demandware and NetSuite both having been on acquisition binges’ in the past 12 months.
Over the past 3 days some 30,000 retail attendees from across the globe gathered in New York’s Javits Center for the annual National Retail Federation Big Show. This year there was a visible increase in both the number of commerce technology vendors exhibiting and the size of their respective booths. For the eBusiness, omni-channel, merchandising, digital and business technology teams in attendance, 2015 will represent another year of robust investment in commerce suite technology. However, retailers face a daunting task differentiating between the vendors in what is an increasingly mature solution space. As luck would have it, Forrester has just released our 2015 Commerce Suite Platforms Wave update to help you. We spent the last 4 months putting eleven of the leading commerce technology vendors through a grueling process of due diligence, product demos, capability assessments and customer reference checks. We looked beyond features to examine toolset usability, extensibility, integration of suite modules, and innovation strategy. Here’s what we found:
Demandware, hybris, IBM, and Oracle Commerce lead the pack. These four vendors represent the best of the best and reflect a solution space that has been maturing since its inception 15 years ago. These vendors go head-to-head in almost every midmarket and enterprise commerce deal and for the buyers of these solutions, the ultimate selection decision often comes down to price, vision, and alliances more than functionality and features. When it comes to the core capabilities (such as pricing, offers, site search, promotion, carts, and checkout), these vendors all pack a heavy punch, with extensive, mature capabilities that, frankly, go beyond the needs of many of their clients.
Today, we released our inaugural Forrester Wave evaluation of B2B commerce suites. In a sister blog post, my colleague Andy Hoar, with whom I coauthored this report, explains why client demand for this research has exploded over the past 12 months, with manufacturers and distributors grappling with how to better serve their sales channels through digital experiences. In writing this report, Andy and I have spent the past six months evaluating the B2B commerce capabilities of dozens of vendors. Despite casting the net wide, our research found that although it’s common for vendors to provide “B2B lite” functionality for their clients — such as supporting unique pricing for employees — only a subset of the broader commerce platform vendor community can truly cater for complex B2B business models with support for distributors, resellers, partner networks, employees, retail stores, and direct B2C all from a single platform. To differentiate the wannabes from the bona fide leaders, Forrester rejigged its established B2C commerce suite scoring criteria to emphasize:
B2B commerce features. We added all-new criteria to evaluate how these solutions solve unique B2B problems, such as quotes; complex pricing lists; eProcurement; product configuration and customization; guided selling; bulk order entry; dealer management; and account, contract, and budget management, to name a few.
For years, customers have asked Forrester to publish a Forrester Wave evaluation specific to B2B commerce solutions. Well, that day has finally arrived! Today, I’m pleased to announce the release of our very first Forrester Wave dedicated exclusively to B2B commerce suites.
In “The Forrester Wave™: B2B Commerce Suites, Q4 2013,” we found that IBM, hybris (an SAP company), Oracle Commerce, and Intershop lead the pack. Additionally, we found that Insite Software and NetSuite offer competitive options. In a separate blog post, coauthor Peter Sheldon explains in more detail how we ranked the vendors.
What’s at stake overall for B2B companies is no less than a piece of the $559 billion US B2B eCommerce market. To earn a share, B2B eBusiness and channel strategy professionals at all levels of maturity require a world-class B2B commerce suite that:
Offers a customer experience standard comparable to leading B2C sites. We frequently hear from our B2B clients that the technology should deliver an “Amazon-like experience.” Fortunately, several of the solutions we evaluated possess the functionality to deliver robust search and navigation, value-added recommendations and reviews, and 24x7x365 ordering and servicing — both online and on mobile devices. In addition, most come ready out of the box to integrate with back-office systems and complex order orchestration and fulfillment workflows.
After a long search, I am thrilled to announce that Adam Silverman has joined Forrester as a Principal Analyst to allow us to expand our coverage of commerce technology and services. Adam brings with him over 15 years of experience in marketing and eCommerce leadership having most recently been in the role of VP & GM for Alibris where he held P&L responsibility for the Alibris online marketplace. Prior to his role at Alibris, Adam has held senior eCommerce marketing and operations roles at Musician’s Friend, Target and Wet Seal and brings with him a great deal of experience of implementing eCommerce technologies at these retailers.
Adam and I are excited to be in a position to broaden Forrester’s coverage and research on commerce technology and services. Across verticals (retail, branded manufacturing, high-tech, distribution, telco, CPG, hospitality), we are seeing increased client demand for research and consulting on commerce technologies, strategy and associated implementation services. To ensure we are meeting the demands of our clients, we have an exciting research plan in the making that includes:
The role of order management solutions in omnichannel retail
Mobile POS and the changing in-store technology landscape
Today hybris announced it has secured an additional $30M in funding from two Silicon Valley VC giants (Meritech Capital Partners and Greylock Israel). This funding comes only 18 months after hybris took a significant funding round from Huntsman Gay Global Capital to secure their acquisition of iCongo in August 2011. Despite an unprecedented period of growth over the past two years the firm has remained profitable. So why has hybris taken this additional round of funding and what does it mean for customers, prospects and partners?
It allows hybris to retain independence while growing credibility and market share. This additional round of funding buys hybris a window of security to maintain their independence in the market, allowing them to focus on R&D and scalable expansion without the distractions of the need to do an IPO or the threat of acquisition. By adding two leading VC firms as investors, the firm is clearly signaling to the market their intent to solidify their position as a global leader in the commerce technology market.