Ecommerce software company Intershop faces acquisition unless it succeeds in capturing enterprise ecommerce customers.
"We expect consolidation in the market and our stock price makes us a bargain at the moment," said Intershop's UK managing director, John Masters.
Historically, the company focused more on the mid-tier market and sell side applications such as shopping carts, but it is now repositioning itself as an enterprise vendor because so many traditional dotcoms have gone out of business.
"The UK business was heavily dependent on the dotcom bubble and we are having to reposition ourselves because many of the venture capitalist funded companies that used our products are no longer in the market," said Masters.
The company's Enfinity MultiSite product, released last week, is the first result of its new enterprise focused strategy.
MultiSite is aimed solely at the top-end enterprise market and is designed to let companies interact with ecommerce systems locally, but provide consistency of integration centrally.
"If a company sells its products through different channels those channels need to be updated simultaneously," said Intershop chief executive Stephan Schambach. "Updated information about a new product needs to be available online immediately. Our product links content management with ecommerce to enable this."
But to meet the needs of enterprise customers, Intershop will need more than a new product. Without established experience in the enterprise market it is depending on the reputation of partners that deploy its software to convince enterprises that it can deliver.
"We are not as well known as we should be. Our partners such as Logica and EDS have the track record in enterprise implementation," said Masters. "These partnerships are not new, but at the end of last year we started building up the amount of work we do with them."
Intershop is having to adjust to the specific demands of the enterprise. "There is no rush to get online in the enterprise market. Those companies are more cautious and more stringent about return on investment," he explained.
The enterprise also has a different sales cycle to the mid tier market. Traditional dotcoms take two to three months to make a purchase but an enterprise sale can take six to nine months.
This additional time is taken up with more stringent proof of concept demonstrations and analysis of the real business benefits and payback. "The return on investment stringency has increased since the economy slowed down," Masters added.
Retailer John Lewis has been an Intershop customer since early 2001. In the new year it will open a new online grocery delivery service called Ocado, which will use Intershop's Enfinity software.
The company is not taking the Waitrose brand online, but has researched ways in which can improve the online retail experience based on the experience of other retailers in the sector.
"[John Lewis] is cautious and pragmatic and wants to learn lessons from others," Masters said. "It has pushed the integration features of Enfinity."
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