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What is commerce-as-a-service? Interview with commercetools US



In this interview I spoke with Art Lawida, president of commercetools US on the state of enterprise commerce software and what is the future of Commerce-as-a-Service (or as I call it "Commerce-as-a-micro-Service")


What is commerce-as-a-service? Interview with commercetools US

Historically the majority of enterprise ecommerce and retail companies have built their systems on top of large (monolythic) software.  This was the first evolution of the tools built to help get brands and retailers online.  

At the same time some companies choose the "build" model actually building their own platforms in-house with their own teams.  These type of projects, typically at the very top such as with Amazon, require significant financial and technical resources and management expertise to pull together the large teams needed to build the robust and scalable systems needed.

The Build vs. Buy question is an ongoing one in corporate boardrooms with pros and cons on both sides, but for the majority of retailers Buy makes much more sense.  

After all why would one invest the imited resources available to them on building technology rather than the products you're actually selling, marketing, customer service and other parts of your brand which are more difficult to replicate by potential competitors.

On the technology side a new way has been emerging in recent years with the advent of API's (Application Programming Interface).  This model has been in the works for many years but recently gaining traction in the retail ecosystem.  And with more experience and new tools API-commerce is becoming robust and reliable enough for the masses of brands to run their business on.

There is a current thought shared amonth the retail circles that retailers are really not in the retail business anymore, but they are technology companies doing retail.  I think this misses the point about what a real retaier or retail brand is.

The leading retail brands of the future will know how to balance their resources to focus on their strengths while meshing together the right technology to deliver their products and build relationships with customers, without becoming technology companies.

In this new model the internal teams do not need to "Build" all the services they need to run the store, rather they need to be able to "put together" a mix of external services that work as a seamless experience for their customers - the shoppers.  

The idea of using external services ias also not entirely new as all monolyth software platforms als use many external services (such as reviews, ratings, image management, payment, etc.) but those system had to build individual (hard) integrations with the external services, and maintain and manage all of these integrations.  The new model removes most of this work and the final product is build faster and with less effort and maintenance of the back-end systems for the retailer.

In this discussion with Art we go over how commercetools is delivering individual commerce components as part of their commerce-as-a-service in the cloud.

The concept of Commerce-as-a-Service is not entirely new but if you read the literature and product descriptions of commerce platform providers there are different interpretations and meanings around so I would like to add a bit of clarity, hopefully it will help or bring out other points of view to discuss.

A "service" as a specific deliverable is behind the new concept of microservices.  However, if you go back to where Software-as-a-service started in the late 1990's (best example is SalesForce) it referred to an entire sotware package being delivered online, through a browser.  It seems that some people have taken the Software-as-a-service model and did the same for ecommerce and calling it Commerce-as-a-Service.  This is not verbally incorrect but it begs the question if a different term is needed to identify "microservices" based commerce delivered in the new cloud PAI format.  

At the lack of having such a terms I'll call this new class of commerce software "CaamS: Commerce-as-a-micro-Service".  I'm sure others will have better ideas but this is how I would identify this new class of commerce software.

Another very important question we discussed is the future of the system integrators (SI's) in the new world of enterprise software as the old multi-year implementation projects are becoming far and in between and how the revenue models are changing as well as the values customers want.

To learn more about commercetools check out their customer case studies and connect with them on Twitter.

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