From the widespread layoffs reported and remarks from industry analysts, it’s clear that Oracle is sunsetting Commerce Cloud. Oracle has a large portfolio of products ranging from cloud computing to databases, so acquiring new businesses or sunsetting others is common. Making these decisions should make Oracle stronger over time, but it leaves the 1,700 businesses currently using Oracle Commerce Cloud with a difficult choice to make.
Oracle Commerce Cloud Origins
Oracle Commerce Cloud (formerly known as ATG) was initially developed in the late 1990s by Art Technology Group (ATG). In 2010, Oracle Corporation acquired ATG and rebranded it as the Oracle Commerce Platform. In 2016, Oracle relaunched the solution as a Software-as-a-Service offering and rebranded to Oracle Commerce Cloud, a cloud-based, omnichannel commerce solution. Oracle Commerce Cloud did well with analysts and was a Leader in Gartner’s Magic Quadrant from 2009 through 2021.
Major shifts in digital commerce have made Oracle Commerce Cloud a less desirable solution. First, the adoption of mobile forced companies to decouple the front-end and back-end by adopting an API or headless architecture. Second, the more recent move towards composable commerce has put monolithic solutions at a disadvantage, the large legacy code bases can not be adapted to composable commerce causing many companies to rethink how they purchase commerce software.
Re-platform
Re-platforming is the first option that businesses have, while time-consuming and expensive, it has been the de facto approach to changing ecommerce software for years. When re-platforming companies will look at software with similar functionality to Oracle Commerce Cloud. This feature parity search will lead them to other all-in-one monoliths built in the same era.
Adobe Commerce (formerly Magento) was originally focused on mid-market and while they push to gain relevance in the enterprise space, especially by bundling other portfolio solutions including Experience Manager, the commerce solution is not ready.
SAP Commerce Cloud (formerly Hybris) and Salesforce Commerce Cloud (formerly Demandware) both represent solid opportunities to re-platform from Oracle Commerce cloud to a similar product.
With all of these options, the same risk of sunsetting exists. They are all products from a large portfolio company where commerce is not at the core of their business. In addition, they are all legacy monolith applications with the issues that come from that era, specifically a lack of agility, speed, scalability, and a very high total cost of ownership (TCO).
These solutions use multi-layered architectures that increase costs for any modifications and make performance improvements difficult beyond adding more caching. Commerce solutions built on this software are time-consuming to maintain, leading to a very high TCO.
Composable Commerce
A better approach would be to see this sunsetting as an opportunity to migrate toward composable commerce. Composable commerce is an approach that emphasizes flexibility, modularity, and APIs. By breaking down the traditional monolithic e-commerce platform into smaller, more manageable, best-of-breed components, companies can build and deploy digital commerce solutions faster and with greater agility. The benefits of composable commerce include:
- Faster time-to-market: Composable commerce enables companies to assemble and deploy e-commerce solutions much more quickly than with traditional monolithic platforms. This allows companies to respond faster to market changes and customer demands.
- Increased flexibility: With composable commerce, companies can more easily swap out individual components or add new ones to their e-commerce solution as needed. This allows companies to better customize their e-commerce solution to meet their unique business needs.
- Improved scalability: Composable commerce allows companies to scale their e-commerce solution as needed, either by adding more components or by increasing the capacity of existing components. This can help companies better meet growing customer demand and accommodate sudden spikes in traffic.
- Better use of resources: By breaking down the e-commerce platform into smaller components, companies can more efficiently allocate resources, including development, testing, and operations teams.
- Reduced risk: With the components coming from multiple vendors, there is a reduced risk from a company sunsetting software, that individual pieces can be replaced instead of re-platforming everything.
Composable commerce offers companies a more flexible, scalable, and efficient approach to e-commerce that can help them better meet the demands of a rapidly changing marketplace and keep pace with evolving customer expectations.
Moving towards composable commerce is significantly easier than an entire re-platform. Instead, components can be incrementally integrated over time leveraging the strangler pattern. This breaks up a large expensive IT project into manageable chunks of work and allows the company to prioritize the migration so that benefits can be attained early in the project timeline.
The key to a successful composable commerce solution is integration. Thankfully, the space is maturing and companies like Elastic Path are solving for not just integrations, but the entire implementation.
What lessons can be learned?
The biggest takeaway from this entire situation is that companies should avoid relying on a single software application or vendor for all of their commerce needs. Instead, a composable approach removes risk. Take an API-First strategy to create a bespoke experience and unique functionality to differentiate in the market.
Companies can no longer rely on a shop-in-a-box and must embrace this new approach in order to stay competitive.