As companies and their customers outgrow previous-generation online platforms, decisions made today will impact business results for years to come.
Over the past decade, buying patterns and technology advances have radically altered business goals and competitive realities. But for many companies, the platforms around which their ecommerce strategies revolve are no longer suited to their own needs or those of their customers. Deciding to re-platform, given the potential consequences for years to come, may seem like a daunting task. This guide provides insights into how to determine if it’s time to make a move and what factors need to be considered to ensure success. It also reviews some of the common architectures that meet the needs of most enterprises.
According to a Forrester Research survey1, 81% of ecommerce retailers are currently using a self-built or licensed on-premises solution and nearly three-fourths (74%) fear their existing solutions won’t scale with their growth plans. Almost half (46%) of retailers report difficulty hiring the staff needed to manage their licensed platform or to continually tweak their internally built ecommerce platforms to keep up with market demands and run the underlying infrastructure.
Re-platforming an ecommerce operation is a huge undertaking. The project encompasses both layers of the ecommerce store:
Both elements are equally important to your ecommerce store’s success. Putting a resource-heavy ecommerce platform on subpar infrastructure can be just as disastrous as a restrictive ecommerce platform on enterprise-level metal. Deciding when the time is right varies between retailers and takes into consideration a multitude of factors that impact the look and feel of a site as well as how it performs for customers.
In the face of changing buying behaviors, existing ecommerce sites may be exhibiting signs that their glory days are behind them. How do companies know when that time has arrived?
And needs change. Many organizations face new sets of requirements that didn’t exist or have changed markedly from when the current ecommerce platform was built. As the product catalog grows, database requirements may change. An increase in concurrent users influences web server size and configuration. Dealing in an increasingly global environment may involve the ability to localize content, display and handle transactions in the currency of the country where the buyer is located, and manage local compliance requirements.
Ecommerce operations dealing with managing physical and digital products or software-as-a-service offerings will have different considerations than a pure online product retailer. Furthermore, ecommerce companies today may need multiple types of payment capabilities, ranging from one-time to subscription-based models and requirements for dealing with renewals, expired cards, refunds, as well as channel issues, such as affiliate marketing commissions.
Any organization facing an ecommerce re-platforming decision must account for momentous changes in mobile and social media technologies that have occurred since the previous platform was implemented. Market research firm IDC recently reported that it “expects tablet shipments to surpass total PC shipments (desktop plus portable PCs) in the fourth quarter of 2013” and smartphones will account for more than 65% of the worldwide smart connected device market, which comprises PCs, tablets, and smartphones3.
Once the new need is acknowledged, it’s time to initiate action. Building a successful strategy requires consideration of the demands of multiple stakeholders as ecommerce operations span many areas of an organization.
It’s critical to establish goals, whether re-platforming the ecommerce operation or starting from scratch. But in order to develop those goals, it’s important that the team involved develop a strategy appropriate for the company’s unique business needs. Business leaders may be focused on issues such as conversion rates and customer retention while technologists are most concerned with security, compliance, and performance. And of course there is the customer, who wants fast access to quality content and ease of completing a transaction.
“Ultimately, the issue of re-platforming an existing ecommerce system comes down to determining the investment required to meet the organization’s goals. There is more to cloud economics than the oft-touted ‘convert CAPEX to OPEX,’” says Mahesh Gande, Senior Solution Marketing Manager at Rackspace.
Ecommerce Platform Selection
The ecommerce platform consists of the software used to manage the look and feel of your site, inventory, payment processes, etc. The platform selection is a critical driver of the hosting choice you’ll eventually need to make. Some initial factors to consider:
This list gives you a foundation from which to build your platform requirements. As you move through the list, you’ll undoubtedly uncover additional questions unique to your business that your ecommerce platform will need to address.
Every company has unique business and IT requirements and there are many solutions from which to choose. In fact, the best configuration for a business may span more than one option. With the plethora of choices and integration paths available, it’s increasingly easy to architect an optimal compute solution for any need.
Each operator needs to review their options against their strategy to choose the right combination. Options include:
“I can’t think of a scenario where the ‘all on-premise’ solution would be optimal,” says Gande. “With that option, you either have to provision for the peak periods, meaning you’re over-investing in capacity for the other periods, or you provision for normal day-to-day traffic and risk being unable to meet spikes in demand.”
An online store is a company’s window to the world. It needs to stand up to daily traffic and unexpected spikes, while offering customers a safe and secure place to shop.
A core component, of course, is enabling customers to make purchases using credit cards. If the number of credit card transactions is relatively small, a third-party payment gateway is economical and may be the best option. If credit card transaction volume is very high, it may be more cost effective to store credit card information in the data center of a service provider that can meet PCI compliance requirements.
Catalog display logic and shopping cart logic may both reside on the same server, in a two-tier architecture — the first tier is composed of a combined web and application tier; the second a database layer. Another approach is a three-tier architecture. In this case, the web layer is the first tier, the app layer is the second, and the database layer is the third.
“We generally find that ecommerce operations start with a two-tier architecture, then as business grows, they start separating two layers so that each tier can scale independently,” says Gande. “Deciding between a two-tier and a three-tier reference architecture really depends on scalability needs for the catalog display and shopping cart.”
Display logic and shopping cart logic can either run on cloud servers or dedicated servers. Cloud is both persistent and highly elastic, with speedy provisioning to scale on demand. Dedicated servers, on the other hand, provide a single-tenant environment for exclusive usage.
The type of database and volume of I/O transactions will dictate which database technology is right for an ecommerce operation. “Cloud Databases is the best option if you want to use a MySQL database and want Rackspace to manage it for you,” says Gande. “If you want to use a database of your choice that supports virtual environments then you can run your own database on Cloud Servers. If your database of choice doesn’t support virtualization, or for the highest I/O performance, we recommend running your database on a dedicated server.”
Ultimately, the issue of re-platforming an existing ecommerce system comes down to determining the investment required to meet the organization’s goals. Factors such as the pattern of demand, total cost of ownership (TCO), and transformation costs need to be factored into any financial analysis of a potential solution. Choosing the ecommerce platform software balances the cost of licensing and management against the benefit of instant access to the tools needed to build and grow a competitive site. Sufficient variability in demand is required to realize cost savings using a public cloud hosting model; flat workloads are cheaper on dedicated infrastructure over a fixed contact term.
Transforming infrastructure can be costly and time-consuming and relying on internal skills may not be the optimal approach. “In almost all cases, I’d strongly recommend that a company approaching the re-platforming stage look into working with a partner that is able to apply skills and resources that are likely in short supply internally,” says Gande.
Based on the knowledge and expertise gained while serving some of the top retailers in the U.S., Rackspace developed four reference architectures for ecommerce solutions built on Magento or Oracle Retail:
Learn more about rackspace ecommerce solutions at www.rackspace.com/ecommerce-hosting/
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