June 21, 2013
It’s been more than two years since eBay’s $2.4B acquisition of GSI Commerce and behind the scenes a lot has been happening. Gone is GSI’s entrepreneurial founder Michael Rubin and in his place sits a new executive team that is now strategically aligned with eBay’s senior management and corporate strategy group. Historically, eBay has been a C2C company, but yesterday’s re-branding of GSI signifies that eBay is now deadly serious about providing a holistic suite of enterprise technology and services to leading retailers and brands beyond their core Marketplace and PayPal payment services.
On paper, the new eBay Enterprise is a "jack of all trades." For retailers and brands, eBay Enterprise represents a one-stop shop for enterprise commerce technology, commerce services, marketing services and outsourced fulfillment and customer care. Let’s take a closer look at these offerings and what they mean to eBusiness professionals:
- Commerce technology. With eBay Enterprise, eBay is stepping up to compete with industry heavyweights in the enterprise commerce technology market. On offer are three core product lines:
- Magento, the ever popular open source eCommerce platform purchased by eBay in 2010.
- ECP (Enterprise Commerce Platform), GSI’s new platform (formally known as v11) which after almost four years of development is now finally operational and running live client sites.
- A home-grown order management solution supporting omnichannel retailers managing order fulfillment and distribution across channels.
As of today, all of these solutions are available from eBay Enterprise as standalone offerings (hosted in the cloud), putting them in direct competition with established industry players including Oracle, IBM, SAP, Manhattan Associates and Demandware. Only time will tell if eBay can adapt to compete in this fiercely competitive market and successfully wear the hat of “enterprise software vendor.”
- Commerce services. GSI already owns a set of assets that qualifies it to be a commerce service provider. True Action, the in-house digital agency of GSI, provides eBay Enterprise with capabilities around strategy, creative, usability, development and customer insights. Coupled with the technology hosting and operations capabilities of GSI, it is certainly fair to say eBay Enterprise should have a shot at competing head-to-head with established commerce service providers such as SapientNitro and Razorfish.
- Marketing solutions. Over the years, GSI built up an impressive set of marketing services through a range of acquisitions (ClearSaleing, e-Dialog, FetchBack, PepperJam and others). Combined, these portfolio firms put eBay Enterprise in a strong position to support enterprise clients with their online marketing initiatives. Unlike other commerce service providers in the market, having this breadth and depth of marketing services under one roof makes eBay Enterprise relatively unique.
- Omnichannel fulfillment and customer care. In the past GSI was perhaps best known for providing outsourced fulfillment and contact center operations for its clients. Under eBay Enterprise, it’s business as usual for this pillar of the GSI business. The company continues to invest in its global customer service and fulfillment capabilities, but furthermore it now offers a suite of omnichannel services empowering clients to execute on ship-to-store, pick-up-in-store and ship-from-store initiatives through the services and capabilities of VendorNet.
In days gone by, the technology, services and operations above were typically only available as a complete end-to-end suite (what Forrester has in the past referred to a “full-service” commerce solution). Subsequently GSI was popular with major retailers and branded manufacturers that wanted to expand into the online channel but were not ready to commit to acquiring technology, building out an eCommerce operations role or investing in fulfillment, customer service and online marketing. However, times have changed. Today, online sales account for 11% of total retail sales (excluding food/grocery) and omnichannel commerce is a key part of almost every retailer and branded manufacturer's growth strategy. Subsequently, the appetite for “full service” has dwindled as organizations look to develop core in-house competencies around omnichannel and digital customer experience. The reality is that few customers of eBay Enterprise will need nor want all of these services wrapped into complex long-term contracts; instead they will demand best-of-breed and innovative capabilities on an à la carte basis with flexibility around integration, terms, licensing and pricing. The ability for eBay Enterprise to offer this will ultimately determine the success of this re-branding.
What does this mean for Magento customers?
It’s business as usual for Magento. With over 150,000 customers, eBay knows better than to upset or mess with a very loyal and passionate open source user community. With this in mind Magento will continue to operate much the same as before as an independent unit of eBay, although it will certainly also have an important role to play in the suite of technology offerings that eBay Enterprise will peddle to clients. So what of x.commerce (the often misunderstood development platform community)? Forrester expects eBay to kill off “X” in its current state, although the concept will live on under the new umbrella of eBay Enterprise, thus enabling a broad developer and partner community around the new division’s technology assets.
I recommend that Forrester clients who have questions or concerns about this evolution of GSI Commerce schedule an inquiry with me to discuss the implications, and as always feel free to let me know what you think in the comments section below.