Gartner has released the most recent version of its magic quadrant for e-commerce. It’s not shocking that the market is growing; something has to be powering all of those black Friday sales, right?

The E-Commerce Market

How I love analyst reports -- an entire industry condensed to a little square where being a centimeter to the right or above your competitor is enough to spawn a press release. It’s almost like magic. Do you suppose that’s why Gartner named their reports the magic quadrant? I digress.

Gartner has released its latest guide to the expanding e-commerce platform market. Continued growth in Internet sales -- 18 percent according to the North American retailers -- has driven many non-traditional retailers to start selling things online. This has in turn propelled growth and a number of acquisitions in the e-commerce market. It’s kind of like the circle of life, but with money.

Gartner defines e-commerce software as a platform that enables

online sales for B2B and B2C commerce. An e-commerce platform not only facilitates a transaction over the Web, but also supports the creation and continuing development of an online relationship.”

The analyst firm identifies two levels of e-commerce capabilities to meet these requirements. The first level is focused on basic online store capabilities like shopping cart management and product visualization. The second level has a bit more wiggle room and includes a mix of features from personalization to warranty/returns management. The second category includes all of the product differentiators that make it difficult for organizations to pick the “best” solution. Gartner is careful to note, that despite the breadth of features, the quadrant does not include integrated marketing and sales or sales service solutions. Those things have their own magic quadrants.

Inclusion Criteria

Vendors included in the Gartner’s study had to conform to a specific set of criteria. Key market criteria included:

  • Has at least 50 production customers for e-commerce functionality, each with at least an average of 10,000 transactions per week
  • Has at least five new referenceable customers for e-commerce in the past rolling four quarters, and five referenceable customers that have gone through at least one version upgrade of the application.
  • Has generated at least $5 million in revenue for e-commerce in the past rolling four quarters.
  • Has demonstrated active market participation, including, but not exclusive to, inbound customer inquiries to Gartner customers and prospects.
  • Has multiple production references (a minimum of at least 10) on a current version, and visible efforts to sell and/or market product to new customers.

In addition, to ensure the vendor was not on the verge of extinction, Gartner required:

  • Sufficient professional services, delivered either internally or through partnerships, to fulfill current and future customer demand during the next 12 months.
  • Sufficient cash to fund a year of operations at its current burn rate.

The result was 20 products organized, as always, into four neat squares.

Gartner’s Rankings

There were several changes in this year’s quadrant. Some were driven by acquisition like IBM’s purchase of Sterling Commerce and Oracle acquiring Art Technology Group (ATG). Overall, five products were dropped, five significant acquisitions occurred and two products were added.

The leader’s quadrant was populated by:

  • IBM WebSphere Commerce
  • Oracle ATG
  • hybris

IBM likely benefited from the solution-based Smarter Commerce strategy it launched this year. Smarter Commerce wraps up several IBM products like Unice for email campaign management and IBM Content Management into a one-stop-shop for doing electronic business. Large organizations that prefer doing business with one partner are undoubtedly attracted. However, like Oracle, IBM has a shopping habit. This means that customers will likely experience a few integration challenges as they roll out IBM’s suite of tools.

The visionary quadrant had the fewest products. Venda and NetSuite were the only vendors categorized in the forward-looking category. NetSuite received the distinction because of its low price point combined with comprehensive feature set that includes software-as-a-service CRM and ERP in addition to financial services and e-commerce. Venda also placed in this category due it breadth. However, its breadth is in the form of global coverage.

The challenger and niche player categories are filled with products options. The challenger quadrant includes:

  • eBay GSI Commerce
  • Digital River
  • Demandware
  • iCongo
  • SAP
  • Oracle iStore

The niche player quadrant includes:

  • Microsoft
  • Intershop
  • MICROS-Retail Fry
  • Cleverbridge
  • MarketLive
  • RedPrarie Escalate Retail
  • Jagged Peak
  • Volusion

Clearly organizations have a lot of options when it comes to e-commerce software. Despite all the shiny new features, organizations should be very careful to select products based on their specific needs, not the vendor’s sales pitch. Integration with the existing IT portfolio is key. The modern selling environment demands convergence. Content from the enterprise content management system may populate product details. Integration with social software may provide clues as to what products should be presented to a visitor.

Are you in the product selection process for e-commerce software? What features drive you? Do you leverage analyst reports like the magic quadrant to help you drive your decisions?