In the years leading up to the dot-com bust, the Internet was unchartered turf to which countless entrepreneurs flocked in pursuit of easy money. Just like the Gold Rush of the Old West in the 1800s, the dot-com business surge had its fling and then fell off.
Just like the rise of the Old West to a thriving community of states, the Internet is now a thriving home to a new world of commerce online. One of the driving forces for the resurgence of e-commerce is the increasing use of open source applications.
“The amount of open source programming in e-commerce is on the rise the last few years — first in non-critical areas as tools and now more mission critical areas,” Todd Williams, vice president of technology for Genuitec told LinuxInsider. Genuitec is the developer of MyEclipse Enterprise Workbench, an integrated development environment (IDE) for Java, Java EE/J2EE and open standards technologies.
The idea of having to pay for business software is no longer valid, Williams claimed. Free alternatives are presenting online vendors with so many daunting choices that these adopters need a consultant to help them sort through the best choices.
The story of the growth of e-commerce can be told in three quick phases. The first occurred from the mid-1990s to the turn of the century. This period was fueled by a mad rush by vendors to get an electronic storefront up and running. Early adopters found little in the line of software support and established business models to guide them.
Phase two ran from 2001-2004, when a lack of software flexibility and integration put e-commerce to the test. Newly introduced business applications had limited features with poor analytics. There was a general lack of support for business needs as well. It is not surprising that the dot-com bust set in.
Now a resurgence is underway. Entrepreneurs are starting to see better program integration and maturing core features. Today, applications are providing vendors with a focus on e-commerce to guide long-term profits and not merely drive traffic and discount deal hunters to their sites.
Another indication of this e-commerce growth phase was recently confirmed by Forrester Research. Its analysis predicted that 37 percent of North American enterprises that sell products or services online will purchase a new e-commerce platform.
Online vendors have many options on the types of programs and platforms available, according to Williams. The choices range from applications developed in PHP coding to Java-based platforms. It is becoming quite common for software developers to offer both proprietary and open source business applications.
“Many of these available applications are good options. But some are not so good. So vendors have to find the right fit for what they need,” he said. “Checking into the options available is a matter of due diligence. You have to find out what others are using.”
For example, he described the open source Apache Web server as an icon. That product has reached the pinnacle of success.
Not Fully Integrated
While open source applications are clearly making an impact in the e-commerce space, it is not yet fully integrated, leaving vendors to use proprietary products for some aspects of their business control. For example, Williams explained that open source commerce is rarely used on the high end. It is mostly used as an entry platform.
The choices a vendor makes are determined to a great extent on their companies’ business preferences, Jason Billingsley, vice president of marketing at Elastic Path Software, told LinuxInsider. His company develops Java e-commerce software platform for building online stores and shopping carts.
“Some complete applications are available for other business sets, but very few exist for e-commerce,” Billingsley said, adding, “I am starting to see lots of open source applications in use in enterprise.”
Eilon Reshef, vice president of product management and co-founder of WebCollage, agrees that open source programming still has a long way to go before being fully implemented in the e-commerce space. Open source tools range from content via Apache Server to a variety of back end applications, he noted.
“We are still not seeing the breadth of tools that other domains have available. E-commerce is still at the Web 1.0 level. It is still too new. Other Internet businesses are further along in Web 2.0 technology,” Reshef told LinuxInsider. Webcollage develops enhanced product marketing tools for online vendors.
A Developing Trend
A trend is developing among applications developers in general to draw from open source programming and add proprietary code to develop a unique software product. This approach is becoming more popular with e-commerce.
Many companies are starting to use a mixed model, according to Billingsley, combining open source and proprietary code. Companies that use this developmental approach do not release the complete program code, as is the licensing requirement under the open source.
“That used to be done a few years ago but not so much now. Now commercial companies are starting to release code with licensing fees. We don’t need to protect our intellectual property openly because we integrate it with our platform. It is easier to license,” Billingsley explained.
Getting Up to Speed
Genuitec is a good example of how software developers are combing open source with their own commercial efforts. Williams said his company chose PH-based tools to build his its Java-based e-commerce business applications, allowing the company to get up to speed fast.
Its products are not open source in the traditional sense. The company offers a fixed subscription price for one year to use the product and obtain support.
“We build on open source and add value. But we don’t offer a free version. By selling at a low price point, we opened up to a world market. We sell to 150 countries,” Williams declared.
Elastic Path’s Billingsley sees the best of both worlds in combining proprietary and open source application code.
“We’ve taken 90 percent of our platform and built services around it. We’ve taken database functionality and open source application servers — both proprietary and open source — and developed a product for cost savings,” he added. “In enterprise, applications can cost from (US)$30,000 to $100,000 for commercial product. We offer this function for free to leverage our product.”
Williams sees a great future for open source e-commerce applications. Most companies are going to open source programs in one way or another.
“Open source products are certainly going to continue. It is very prolific. I see it getting better choices. Larger vendors will adopt open source for its aggregation effect,” he predicted.
This story was originally published on Feb. 5, 2007, and is brought to you today as part of our Best of ECT News series.