Web retailers go open-source

Fry Inc. has been using Microsoft Corp. software to design, develop and host e-commerce sites during much of the past eight years. But that’s expected to change.

The Ann Arbor, Mich., company, whose clients include retailers Eddie Bauer, Crate & Barrel and Brookstone, plans to launch a Java-based offering called Open Commerce Platform that carries no licensing fee for the customer. And Fry is happy to run it on freely available open-source technologies such as the Linux operating system, Tomcat application server and Apache Web server.

That means that an online retailer that hires Fry to build, refresh or reconstruct its e-commerce site can avoid all software licensing costs if it decides to go with a completely open-source package. That’s not insignificant, since licensing fees can run as high as US$300,000 per year for a major retail Web site, according to CEO David Fry.

So far, only one customer has opted to go the fully open-source route. Maidenform Inc. in Bayonne, N.J., will run OCP on a Tomcat application server and Red Hat Linux, with an open-source MySQL database server on the back end.

Another customer opted to use open-source software only for the Web and application servers running the Java-based OCP. Olean, N.Y.-based Vector Marketing Corp., which does business under the name Cutco Cutlery, chose to stick with Sun Solaris and an Oracle database, since it already had licenses for them.

Two new customers, whose sites won’t be ready until May or June, also chose a mix of open-source software and previously licensed commercial products.

One is a retailer that had a marketing site based on Microsoft’s Active Server Pages technology. The company plans to switch to the OCP platform running on IBM’s WebSphere application server on an Intel-based Linux server for the e-commerce site that Fry is building. On the back end, the company plans to use Microsoft’s SQL Server database, its corporate standard.

“It’s an interesting combination,” said Rudy Pataro, Fry’s chief technology officer. “We like to point to it as an example of the flexibility.”

Another Fry customer, a durable-goods manufacturer, is sticking with its IBM DB2 database and its SAP AG NetWeaver application server, but it will run them on Linux.

Retailers haven’t exactly been pounding down Fry’s door requesting open-source software. But the CEO said the open-source alternative is gaining acceptance.

“They don’t start the conversation by saying, ‘I want to move to open-source,’ ” said Fry. “But once they’re looking at making a platform change, ongoing cost and total cost of ownership is clearly an issue.”

Most retailers need to heavily customize their commercial software because few packages can meet their widely varying needs. So Fry’s engineers often find themselves having to do extensive modifications. OCP was designed with customization in mind, and customers can see the source code, since they own it.

The impetus for the creation of the new OCP was his company’s quest for the Holy Grail of e-commerce platforms, according to Fry. Engineers divided the project into a series of modules so they could work on the product as time permitted over the course of 12 to 18 months.

OCP’s feature set includes a customizable presentation layer, catalog browsing and search, merchandising, check-out, personalization, customer service, site administration and systems integration components. It can also help companies run promotional campaigns, manage product catalogs and oversee cross-sells and upsells, Fry said.

Kate Delhagen, an analyst at Cambridge, Mass.-based Forrester Research Inc., said retailers began reinvesting in their e-commerce platforms starting last year, after doing little but maintenance between 2000 and 2002. She said that although some have shown interest in learning more about Amazon.com Inc.’s Linux-based applications, she hasn’t heard much discussion about open-source alternatives.

“Their concerns are that they don’t know enough about it, and it may not be mature enough for retail,” Delhagen said. “Retailers tend to be conservative and wait for others to go first.”

But 10-year-old Fry, which is a well-established online design and development company, expects to be working with open-source software a lot more this year. Pataro estimated that three years ago, 90 per cent of the company’s work was Microsoft-related. He predicted that this year, 60 per cent of the sites that Fry builds will be based on OCP and Java, with at least half running some open-source software.

But Pataro said he thinks there would be less interest in OCP if Microsoft had given its customers more clear direction on its plans. He said Microsoft’s e-commerce platform hasn’t evolved much since Commerce Server 2000, and customers view the 2002 release as an incremental upgrade that’s “long in the teeth.”

Microsoft had been touting an ambitious project code-named Jupiter that aimed to integrate its Commerce Server, Content Management Server and BizTalk Server. However, the company quietly scrapped its Jupiter plans earlier this month.

Pataro estimated that his company’s workload would be 70 per cent to 30 per cent in Microsoft’s favor if Jupiter had been ready. He added that Microsoft hadn’t informed him about the Jupiter decision, even though he speaks with the company on a regular basis and Fry is a Microsoft Gold Partner in e-commerce.

“Our customers don’t know where Microsoft is headed with their commerce platform. They don’t know when it’s all going to come together and what it’s going to look like when it does,” he said. “I have Microsoft clients just waiting for Microsoft to come out with something new so they can move to that platform. Microsoft has some great technology, but there are competitive technologies that make it more difficult for us to sell Microsoft.”

The e-business suite of applications that Microsoft Corp. had code-named Jupiter and planned to sell as a single product won’t be delivered in the 2004-05 time frame as planned, company officials confirmed last week.

Trina Seinfeld, a senior product manager in Microsoft’s e-business server division, said that “it’s really going to be up to customers” if the product is ever revived.

Plans had called for Microsoft to sell a single product that integrated its Commerce Server, Content Management Server and BizTalk Server by 2004. Company officials later revised the road map and stated that the first phase of Jupiter, a new version of BizTalk Server, would be delivered in 2004 and that the fully integrated suite, or “true Jupiter vision,” would emerge in 2005.

Ted Kummert, vice-president of e-business servers at Microsoft, sent a letter to 450 customers and partners on Feb. 13 to inform them that, after careful study, the company had determined that customers prefer to purchase their integration and portal technology separately, so Microsoft wouldn’t deliver Jupiter as promised.

“Changing the packaging strategy does not in any way change our goals for interoperability between our portal and integration technologies. Our requirements for interoperability remain firmly intact,” Kummert told customers.

He added that the “Jupiter vision” would be realized through the Windows Server System, which he called “an effort that aims to better integrate all of our servers technologies.”

One of the Jupiter pieces, BizTalk Server 2004, is scheduled to be launched on Mar. 2, but plans for the other two Jupiter products remain unclear.

Kummert noted that customers and partners have made it clear that they want portal technology that is “architecturally unified” and “brings together” Microsoft’s Content Management Server and SharePoint Portal Server. The organizations responsible for those products have been unified in response to that feedback, he said.

But there was no mention at all of the word commerce in Kummert’s letter. Seinfeld said Microsoft is working on plans for the commerce market and expects to release a road map “in the next few months.”

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