Every CEO I speak with wants to move faster on ecommerce. Sometimes, this is just a case of being a good, forward-thinking CEO, but often it's a result of technology or tools that don't allow the business to move fast enough — tools that are too fragile to handle challenging use cases, or too inflexible and complex to keep up.
Ecommerce is nearly 25 years old, with Amazon and the earliest sites having launched in the mid-1990s. Companies now have many options for marketing and ecommerce technologies. With each new vendor and technology making new and fantastic claims about how they are going to solve enduring ecommerce challenges.
One of the most basic choices online sellers need to make is whether to use legacy on-premise/custom-built solutions or cloud-based SaaS platforms. Or, whether to choose something in between.
Let's take a look at the benefits and drawbacks of both options.
For most of the evolution of ecommerce, complex, highly-scaled customers turned to on-premise ecommerce solutions that were installed on-site on company-owned servers. On-premise solutions offered the promise of innovation, plus the ability to customize and evolve — often through the purchase of additional hardware — as customer demands and business needs change. And for years, many companies had been successful in driving high growth digital businesses this way ... but not without some pain along the way.
Over time, there's an increase in the IT resources needed to support these legacy systems. And what started as a strength — the ability to customize — becomes a weakness as years of one-off customizations eventually make the platform less agile and inflexible. Unfortunately, ecommerce is the last place any company can afford to lose flexibility and agility. From quickly changing customer expectations to security threats to regulatory requirements, ecommerce technology is one of the most significant areas of innovation that companies need to make.
Another big challenge with legacy on-premise solutions is the difficult and costly product upgrades. Even after considerable investments in time, money, and resources to move to a new version, companies often find that the upgrade delivers little business value beyond what they had with the previous version.
Since Salesforce created the SaaS industry with its CRM in 1999, many other types of applications have followed suit, including ecommerce.
Cloud-based ecommerce solutions initially became available in the mid-2000s. For instance, Demandware, later acquired by Salesforce, launched its multi-tenant SaaS platform in 2004. In the following years, many ecommerce vendors have shifted to a cloud strategy, and new entrants have emerged.
The well-documented benefits of SaaS platforms
Scalability: Cloud platforms enable sites to scale up or down based on business need. This means that even small sites can scale up as needed for high-traffic periods, like black Friday or flash sales, without having to install expensive hardware.
Decreased maintenance costs: Over time, on-premise systems grow in complexity and tend to require high maintenance costs — in terms of time, money, and employee resources — just to keep sites up and running. SaaS platforms handle much of the back-end infrastructure of the site such as: security, governance, scalability, and updates, so that customers can focus on selling their products, not on-site maintenance.
Regular product updates: SaaS platforms are updated several times per year, providing new features and functionality on a regular basis. The updates are generally seamless for the customer. This means that customers don't get stuck with outdated technology and legacy systems.
Data security: SaaS platforms are continually updated to provide the best security features. In fact, many of the world's largest banks and governments are moving their systems to cloud solutions because it's actually more secure than having data hosted on on-site servers.
These benefits appeal to ecommerce companies, especially those who have problems with scalability and maintenance costs.
What are the drawbacks of SaaS solutions?
In the early days, SaaS ecommerce platforms usually required functional sacrifices. As legacy vendors re-platformed to cloud versions, the new SaaS releases almost never had as much functionality as the original on-premise versions. But the functionality gap narrowed — and even disappeared — as SaaS offerings have matured.
New entrants to the ecommerce market have also muddied the reputation of SaaS. Too many of these new vendors are designed around meeting only the simplest storefront requirements rather than providing a robust solution. They may require five, ten, or even more interconnected web apps to get close to approaching the complex functionality that legacy on-premise solutions offered years ago.
Is there a hybrid approach?
Headless commerce, powered by robust SaaS ecommerce can be a great strategy because it combines the benefits of using scalable, reliable core commerce services in conjunction with modern web development and experience management tools. Today, some highly scaled ecommerce companies have headless as some part of their commerce architecture as a way to both benefit from SaaS ecommerce and still deliver complex, customized, and innovative customer experiences that they enjoyed from their on-premise solution.
While headless commerce is trendy right now and has benefits, companies should still approach it with caution. The companies that are most successful with headless commerce are those that have a relatively large and sophisticated team of developers who can take advantage of the additional flexibility, without getting mired down by the integration complexity. Companies without extensive IT and development resources may find a headless architecture to be too difficult and expensive for their ecommerce needs.
So what's the answer?
The answer is to look for the solution that offers the complete functionality you need for your ecommerce strategy.
SaaS solutions offer excellent flexibility and scalability. But when evaluating SaaS vendors, make sure that you're getting a solution that has enough functionality to meet your ecommerce requirements — whether in B2C, B2B, or B2B2C. The tools must actively support modern strategies such as headless commerce when you need it. But they also need to provide other options, like page templates and builders, to easily build and manage ecommerce experiences without requiring IT and development resources. And, your solution needs to be able to power great experiences across all of your channels such as digital marketing, online marketplaces, offline interactions in stores for B2C use cases, or through sales, service, or partners for B2B use cases.
Commerce Cloud might be the answer
Salesforce Commerce Cloud offers complete B2C, B2B, and B2B2C commerce functionality. We fully support headless use cases, but also offer low code alternatives when you need to do things without the overhead of headless. Find out why no one knows more about customer centricity and support across channels.