Is “Web Business” Evolving?

As with any business that grows in significance and value, Web business is evolving.  I would argue that the developments we are seeing are positive for the industry and will usher in a corresponding evolution from technology and service providers.  Here are some thoughts that outline my thinking here:

Think about a traditional Web business in a few silos:

• Digital Advertising (& in some cases, Marketing)
• eCommerce
• Infrastructure/Operations

Each of these silos typically has its own key constituency.  In the case of Digital Advertising, typically the CMO and his/her organization focus on how to create and implement an overall digital marketing strategy, often leveraging one or more third party agencies (to assist and/or drive and/or execute).  They work in tools from Doubleclick/Google, Microsoft, Yahoo, etc.  In the eCommerce silo, the typical retail/CPG enterprise is growing an organization that looks after online commerce and all of the related solutions that enable Web commerce.  This is an area with many applications that need to be managed both from a core platform standpoint and also on the periphery (think email marketing).  Finally, the Infrastructure/Operations team is responsible for supporting the needs of the eCommerce (availability, development, security, etc) and Advertising/Marketing teams (in this case mostly around branding).  The Infrastructure/Operations team usually is spearheaded by the CIO/CTO organization. 

The three main silos that support the Web business often have divergent metrics and from a tactical perspective, have very different daily needs.  However, it is important to externalize these silos and think about their collective impact on the most important constituency in this ecosystem…the customer.  With customer acquisition and targeted marketing, shopping, personalization and overall experience all working in concert, user experience can be exceptional.  If any of these focus areas falls out of balance the customer experience is negatively impacted and the brand is damaged.

We have begun to see an evolution in how some organizations have dealt with the need to deliver a coordinated experience to customers.  In most cases, Version 1 of this evolution has resulted in the office of the CMO reaching down into bits of eCommerce and Infrastructure/Operations.  This has produced mixed results.  In some cases, this has given rise to the SaaS eCommerce providers and so-called turn-key eCommerce application providers.  The CMO believes she/he can “own” eCommerce and remove the silo between Marketing and eCommerce.  A problem that some organizations have seen however is that the office of the CMO does not have core competencies in technology and enterprise IT governance.  Further, organizations whose job it is to chart the equity and future of the brand aren’t often structured to run day-to-day, mission-critical applications like eCommerce whether they are in the cloud or in their own data center.  As another example, think about how eCommerce directors are chartered not only with impactful site merchandising and flawless commerce execution, but often don’t have all the levers to pull in terms of acquiring customers, measuring campaign effectiveness, and gaining insight into customer personas.

The reality is that a best practice for a successful Web business is inherent coordination between digital marketing, eCommerce, and Web infrastructure organizations.  To this end, I see a fundamental shift on the horizon for both technology and service providers to provide a role-based, coherent set of technologies, tools…and ultimately solutions..that enable advertising/marketing, eCommerce, and Infrastructure/Ops to work in a coordinated manner.  For lack of a better term, think about a “Digital ERP” that may arise, just like ERP rose up out of islands of information and applications by functional area or department.  One simple representation: