Web Shop Hub 

With the advent of a viable Software-as-a-service (SaaS) options for business users to utilise robust applications, a paradigm shift is occurring in the software marketplace. Maybe some of you had your fingers burnt with Application Service Providers (ASP) a few years back, but now SaaS infrastructure costs and bandwidth speeds have increased massively, means moving to utility computing is becoming a reality, FAST.

The emergence of affordable software is changing the conventional software house business model, ie: buy/right to use the software, implement it and enter into a support contract. This high financial cost, both in terms of cashflow and disruption to the business means the return on investment is some way off. Also, the software house may lose focus once the system is implemented as the only commitment is the ongoing support contract. This loads the risk more towards the customer than the supplier.

Time to Change  

SaaS is gaining traction in the UK, slowly but surely, I believe it will be the way that majority of business enterprises will acquire the use of software applications. Web services allows computer applications to "talk" to each other without the hardwired approached. Consequently, the speed and cost of suppying such services means innovative solutions are being created in days, not months.

SaaS applications are taking a hold in businesses of all sizes, you only have to look at www.salesforce.com to see how quickly it is being adopted. Turning to Web Shops, a huge number of Web Shop applications have appeared on the market, some adopt the SaaS model, ie: fully hosted, no software to install, buy-and-trade with no signicant contract, where as others still require software to be installed on upgraded. The focus is now on pay-as-you-use thereby the customer gains the benefits inline with expenditure. Also, the supplier is more committed to the relationship as the short term contract means they must provide good solutions and customer service throughout the relationship if they are to retain and grow their customer base.

Competition just got harder

How can a small retailer compete in the global village? Web Shops can be set-up in a matter of minutes, but building traffic and converting customers can be the biggest online challenge a retailer will face. So joining a retail hub can make the sum of the parts greater than the whole. This idea is not new, look back to the last century and you see that co-operatives used their combined purchasing and sales to add value to suppliers and customers alike.

The speed of the Internet allows relationships to be formed and information exchanged at the speed of light, so what was unthinkable in the past is now possible. As people become increasingly impatience (how long do you stay on a typical web page?), the Internet user needs to be presented with the information in a concise and easy to understand manner. If they can be presented with meaningful product information, at the right price and service level then customer loyalty starts to build. Being a small island in the retail world is difficult, but with Web Shop hubs this may start to tip the balance.

If you have any views on the above I would be interested to hear .

Regards

Robert.

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