Welcome!

Machine Learning Authors: Elizabeth White, Liz McMillan, Yeshim Deniz, Pat Romanski, Shelly Palmer

News Feed Item

Demandware Announces Research that Reveals TCO Analysis of eCommerce Solutions Often Fail to Expose True Costs

Demandware®, Inc. (NYSE: DWRE), a leader in on-demand ecommerce, today released the results of a new study examining how online retailers evaluate specific cost considerations when comparing cloud-based and on-premise ecommerce solutions. In a study commissioned by Demandware, Forrester Consulting surveyed 156 retail CIO and business executives across the U.S. and Europe and found that 81 percent of online retailers use a home-grown or a licensed on-premise ecommerce platform. The study shows that retailers spend an average of seven percent of total online revenue to support their ecommerce platforms. Despite this level of investment, 74 percent of respondents report immediate concerns that their current solutions will not scale to support the growth plans of the business. The findings are summarized in the study “Understanding TCO When Evaluating eCommerce Solutions,” by Forrester Consulting, November 2012.

TCO Higher Than Predicted for Many Retailers

The study reveals that the total cost of ownership for ecommerce solutions is greater than expected for many retailers and restrictive contracts tend to amplify the high costs. The majority of retailers noted that the contract terms for their on-premise platforms require the purchase of additional licenses in order to scale their online businesses, as well as restrict the use of the platform to support strategic growth initiatives, such as international and multichannel expansion.

  • 43 percent of online retailers found that actual cost of ownership was higher than their projections.
  • 67 percent of retailers using a licensed on-premise solution report that they are contractually obligated to acquire additional licenses when reaching a certain threshold of online traffic.
  • 78 percent of retailers report that the vendor contract they have in place restricts them from using the technology to expand into new markets.
  • 72 percent of retailers surveyed have concerns about the ability of their current ecommerce platform to meet multichannel requirements in supporting future growth initiatives.

Retailers Are Distracted by Complex Upgrades and Risk Falling Behind

The research also shows that retailers are distracted trying to keep up with the complexity of platform upgrades and risk falling behind competitors in the rollout of basic online functionality and user experience enhancements. “Given the strategic importance of the online channel…eCommerce leaders can ill afford to get left behind; they need regular access to innovative new capabilities from the vendor community. The problem with upgrading on-premise solutions this frequently is the opportunistic cost. This constant and never-ending cycle of upgrades means that valuable development resources are being utilized in a tactical manner to keep up with the competition, rather than being used to develop innovative feature sets that differentiate in the marketplace,” the study states.

  • 39 percent of retailers upgrade their ecommerce platform to the latest version only once every two to three years
  • 76 percent of the ecommerce leaders surveyed report that each upgrade takes more than a month to complete

Retailers Embracing Cloud-Based Solutions

Though TCO models are customary, the research found that the process lacks rigor and can be misleading. The study states: “As eCommerce and technology leaders factor in costs to their TCO model, they leave many stones unturned, which leads to a situation – intentionally or not – where the model can favor on-premise solutions versus those from the cloud. …Perceptions that cloud-based revenue share models are more costly than owning and operating ecommerce technology in-house are often misguided.”

Demandware is seeing many leading retailers shifting their businesses to cloud-based ecommerce platforms to benefit from capacity on-demand, seamless upgrades and unconstrained growth possibilities, including Demandware client, Finish Line, a premium retailer of athletic shoes, apparel and accessories. “Our goal is to transform our business, not just maintain it. We want to drive innovation and propel the business. Demandware reduces operational complexity and puts the power in the hands of our users to create world-class brand experiences. It provides customers a better and faster online experience, rather than having technology get in the way,” said Chris Ladd, executive vice president and chief digital officer for Finish Line.

“In the first generation of ecommerce, when CIOs had to build everything from scratch, retailers took on major new costs to develop and operate platforms, which over time became assumed – and sometimes forgotten – in the P&L. We believe the study clearly shows that as retailers move forward into a new digital world, they also need to pause and challenge yesterday’s assumptions regarding the costs of ecommerce. It’s time to think differently,” said Jamus Driscoll, senior VP of marketing for Demandware.

Learn More

Survey Methodology

Demandware commissioned Forrester Consulting to conduct an online survey of 156 ecommerce, IT and marketing leaders across retail, branded manufacturer and consumer products companies in the US, UK and Germany to evaluate the cost considerations of cloud versus on-premise ecommerce solutions. The study, conducted by former Forrester Consulting analyst Brian Walker, began in June 2012 and was completed in September 2012.

About Demandware

Demandware (NYSE: DWRE) is a leading provider of software-as-a-service (SaaS) ecommerce solutions that enable companies to easily design, implement and manage their own customized ecommerce sites, including websites, mobile applications and other digital storefronts. Customers use our highly scalable and integrated Demandware Commerce platform to more easily launch and manage multiple ecommerce sites, initiate marketing campaigns more quickly, and improve ecommerce traffic. For more information about Demandware, visit www.demandware.com, call 1-888-553-9216 or email [email protected].

Connect With Us

Demandware is a registered trademark of Demandware, Inc.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@CloudExpo Stories
In order to meet the rapidly changing demands of today’s customers, companies are continually forced to redefine their business strategies in order to meet these needs, stay relevant and continue to see profitable growth. IoT deployment and development is integral in this transformation, and today businesses are increasingly seeing the value of investing their resources into IoT deployments. These technologies are able increase ROI through projects such as connecting supply chains or enabling sm...
Interested in leveling up on your Cloud Foundry skills? Join IBM for Cloud Foundry Days on June 7 at Cloud Expo New York at the Javits Center in New York City. Cloud Foundry Days is a free half day educational conference and networking event. Come find out why Cloud Foundry is the industry's fastest-growing and most adopted cloud application platform.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that Carbonite will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Carbonite protects your entire IT footprint with the right level of protection for each workload, ensuring lower costs and dependable solutions with DoubleTake and Evault.
SYS-CON Events announced today that EARP Integration will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. EARP Integration is a passionate software house. Since its inception in 2009 the company successfully delivers smart solutions for cities and factories that start their digital transformation. EARP provides bespoke solutions like, for example, advanced enterprise portals, business intelligence systems an...
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assis...
In his session at 20th Cloud Expo, Brad Winett, Senior Technologist for DDN Storage, will present several current, end-user environments that are using object storage at scale for cloud deployments including private cloud and cloud providers. Details on the top considerations of features and functions for selecting object storage will be included. Brad will also touch on recent developments in tiering technologies that deliver single solution and an end-user view of data across files and objects...
We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which i...
Cloud applications are seeing a deluge of requests to support the exploding advanced analytics market. “Open analytics” is the emerging strategy to deliver that data through an open data access layer, in the cloud, to be directly consumed by external analytics tools and popular programming languages. An increasing number of data engineers and data scientists use a variety of platforms and advanced analytics languages such as SAS, R, Python and Java, as well as frameworks such as Hadoop and Spark...
IBM helps FinTechs and financial services companies build and monetize cognitive-enabled financial services apps quickly and at scale. Hosted on IBM Bluemix, IBM’s platform builds in customer insights, regulatory compliance analytics and security to help reduce development time and testing. In his session at 20th Cloud Expo, Tom Eck, Industry Platforms CTO at IBM Cloud, will discuss how these tools simplify the time-consuming tasks of selection, mapping and data integration, allowing developer...
SYS-CON Events announced today that Outscale will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outscale's technology makes an automated and adaptable Cloud available to businesses, supporting them in the most complex IT projects while controlling their operational aspects. You boost your IT infrastructure's reactivity, with request responses that only take a few seconds.
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
One of the biggest challenges with adopting a DevOps mentality is: new applications are easily adapted to cloud-native, microservice-based, or containerized architectures - they can be built for them - but old applications need complex refactoring. On the other hand, these new technologies can require relearning or adapting new, oftentimes more complex, methodologies and tools to be ready for production. In his general session at @DevOpsSummit at 20th Cloud Expo, Chris Brown, Solutions Marketi...
DevOps at Cloud Expo – being held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real r...
As cloud adoption continues to transform business, today's global enterprises are challenged with managing a growing amount of information living outside of the data center. The rapid adoption of IoT and increasingly mobile workforce are exacerbating the problem. Ensuring secure data sharing and efficient backup poses capacity and bandwidth considerations as well as policy and regulatory compliance issues.
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, will motivate why realizing the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insigh...