The Importance of an Open Source Approach in an Ecommerce Deployment
This article is geared primarily to non-technical users,executives and management. It is not intended to be a technically rigorous paper but rather some general guidelines about electronic commerce and the importance of open source software in electronic commerce.
In order to understand the importance of open source software to your company's electronic commerce deployment, it is important to understand the structural changes and implications of the Internet and the new economy. The new Internet economy represents a strategic inflection point in computing and business. "Strategic Inflection Point" is a term used by Intel's CEO Andy Grove and refers to the periodic sea of changes the computer industry undergoes when the old rules no longer apply and a new paradigm begins to take hold. Intel has made it one of its missions to inculcate a culture that looks for these strategic inflection points so that they can avoid the fate of so many other companies in the computer industry clinging to the old paradigm. Minicomputer manufacturers are one example of companies missing the sea of change that personal computers brought on.
Clearly the Internet as well as related technologies represent a fundamental sea of change if there ever was one. In a number of industries we find web-enabled companies re-writing the rules of that industry. E-Commerce has become more than a buzz word, with CEOs launching ambitious projects to avoid being "Amazoned." These projects are important to the enterprise, often times the life of the company is at stake. The choices made in a company's approach and its software strategy often make the difference in the success or failure of the project.
When deploying these initiatives, rapid iterative approaches based on user feedback are a better way to maximize the functionality and profitability of the system. Too often, assumptions are made about the perceived or expected behaviors of users in regard to e-commerce systems. Too often, corporations take the same approach with a web site that they would with a brochure. Build it once and then leave it alone for a year. Expect to spend at least half of what you spent building the site on maintenance and changes in the first year.
With that said, it is important to design your site with flexibility and the ability to change in mind. Make sure that you build proper content management tools with the site and have a procedure for updating that content. If you produce a catalog, make sure that the content for the catalog can be re-purposed on the web easily.
Often the previous approach was to exhaustively select a vendor and then engage them in deploying the software. Given that most companies amortize this cost over a five-year period, selection of the vendor and technology is critical. In an industry that is only five years old, selecting the proper vendor and technology is very difficult.
Many companies make the choice, "Let's go with the safe solution." This often means the company's current vendor or the one perceived as the largest in the marketplace. While this appears to be the safe step, it most certainly is not the optimal solution for the company, especially since the previous safe option players may not be the best solution to deal with the new challenges presented by the inflection point. In fact, because these represent the previous "safe" vendors, they represent precisely the wrong assumptions in their approaches, methodologies and technologies.
The safe vendors, before the inflection point, are no longer the appropriate vendors after the inflection-point. Look for vendors that have developed around the inflection point.
Additionally, choosing the largest vendor may not make you safe. When selecting a vendor for e-commerce deployment, it is important to look beyond the life of the vendor. The CEO should assume that the vendor will not be with them in some way or another in five years. Software will change, the vendor may change focus, be bought out, or they may discontinue the product. Technology has proven time and time again, even safe vendors can go away in five years.
This means that in any e-commerce initiative, you embark on making sure you get the most important element - the source code with the proper documentation. This also might be a good time to re-evaluate your knowledge management procedures. If the vendor cannot supply the source code, look very carefully at them. What guarantees do you have with this vendor? Any vendor that cannot provide the source code to what will become the cthe core of your business initiative on the web shouldn't be taken seriously.
Remember that you are betting your business on this.
Think about your relationship with your current IT vendors. Is it everything you want it to be?
In assessing the impact of the Internet, it's important to keep in mind several things about the strategic shift it embodies.It's a networked economy. This means the company with the fastest, most secure network with the most network connections wins. Let's take a look at what this means in the context of IT deployments and e-commerce initiatives.
Fastest - This is fairly simple to understand. Any e-commerce system. needs to be fast. The server or servers shouldn't be underpowered. In fact, a good rule of thumb is to take your worst case estimates and multiple it by five. As far as speed of the network is concerned, it is a mistake to assume that your internal IT people can deploy enough bandwidth to satisfy your customers. The same can be said for regional ISPs and many of the national providers such as Earthlink or Mindspring. E-Commerce is the domain of national co-location and data center providers. The key in choosing one of these vendors is to select a vendor with a large set of peering arrangements. Peering arrangements can best be described as private connections with other ISPs such as America Online. This is a relatively small marketplace of providers, such as Exodus Communications, Frontier Global Center, Qwest, and Above.net. When choosing an e-commerce provider, make sure they have a data center in one of these facilities or have a relationship with one of these providers.
By speed we don't just mean the network and the servers.The time it takes to deploy to the site is critical. You need to get the site up yesterday. Make sure you can deploy in less than a quarter and continually make changes to the system based on user feedback.
Most network connections - For Amazon, one of their competitive edges has been their affiliate network. These connections to the Amazon site have a tangible benefit and represent one of the clear competitive advantages Amazon has. To date, it has generated 1,059,360 incoming links to the Amazon site. By contrast "competitor" Barnesandnoble.com has 63,254 incoming links to their site. Their sales figures represent a similar disparity (roughly 12 to 1). So when deploying an electronic commerce initiative, look for systems that maximize incoming links. One of the most cost-effective ways to do this is with an affiliate program such as Amazon's. Amazon developed their own software to track purchases, and currently they can boast a greater number of affiliate networks such as Clicktrade, BeFree, and Linkshare. These outside networks also increase deployment costs in addition to the software costs from the providers themselves. In the long term, it's better to use software with affiliate tracking built-in since this saves on integration costs and assures ownership of the affiliate relationship
Most secure network - Network security in the networked economy is of vital importance. As a recent break in at CD Universe showed, an online record store with three years of e-commerce experience, over 300,000 customer's credit card information combined with their personal information was lifted by Russian cracker. Undoubtedly it was the single greatest publicized e-commerce crack to date, and demonstrates the problem of not rigorously testing systems and performing regular security audits. It also highlights another problem - namely, closed source software. The piece of software which was cracked, was the closed source credit card authorization system. A recent study by Securityportal.com concluded that open source software was corrected much more quickly than closed source software from Microsoft and Sun Microsystems.
Having the source code allows you to have the source vetted, corrected and modified to fit your companies needs.
Without the source code, you just might find your business orphaned with no place to go for support or help. Not having the source code to your company's internal e-mail client isn't that important. Not having the source code to your e-commerce solution can prove devastating.
For example, in June 1999, ICat, a division of Intel and at that time a leading e-commerce solution, informed its entire customer base that ICat would no longer be supported. ICat also informed these customers that they would be bound by the terms of their license and no source code would be forthcoming.
For the IT managers and CEOs who took the "safe choice" with closed source, lost.
For this reason, access not only to source code, but the ability to change source code is paramount. Source code escrow schemes prevent you from proactively modifying that code for your site. For this reason, I recommend against source code escrow for most businesses.
For most businesses, this sounds like a much greater IT investment than they previously made and it probably is. The previous attitude of, "We'll just buy solution "X" won't knock the ball out of the park for e-commerce. It might get the site up and running, but don't expect to be on the cover of Fortune magazine any time soon for it. In the networked economy, the network itself becomes one of the most valuable assets
In the non-networked economy, if the company's e-mail system was down for a day, this represented an annoyance, but not a business-threatening situation. If this happened several times a year, it wouldn't represent a business threatening crisis, although it certainly it should be repaired. Keep in mind that being down three days a year still means a 99.17% uptime. Consider the reaction to this with an e-commerce web site such as Amazon or eBay - it significantly drove down their stock price!
The lesson here is clear, stability of the system and the ability to remain up under heavy loads is critical and probably 99.99 uptime should be the operating goal of an e-commerce initiative. Once again, I would recommend taking a look at software that is open source, has been peer reviewed and professionally developed. Ask about uptime as well as total cost of ownership. You are betting the future of your business on it.
If you are looking to purchase software, and want your internal IT to deploy it, ask them what platforms they feel most comfortable supporting with the stability, security and uptime requirements you need. More than likely, some of the Internet developed software and OS options represent the best choice since many of these grew up around natively in the strategic inflection point that is the Internet. More than likely, you will outsource this effort to a firm that specializes in e-commerce integration. If so, be sure to get source code for every component to be used in the site. It would hurt your business to be dependent on a closed source product without any recourse for support of that software. Additionally, ask about integration with existing ERP packages and business process. Usually, having the source code makes this task much easier.
Finally, be prepared to move at net speed. This means putting in place a system to handle customer inquiries in a timely fashion, and making sure fulfillment is rock solid. The net moves quickly and having the customer service systems in place to handle order volume and customer concerns is crucial. That is an area where traditional brick and mortar companies have an advantage over net companies. Customer support infrastructures are already in place. You need to make sure that your customer service center is properly integrated with your website and your existing infrastructure can support it.
Launching an ecommerce site can be a daunting task. By making the right decisions early, you can save yourself a lot of headache and be assured that it will positively impact your company's bottom line.
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