The Future of Ecommerce is in the Cloud

This post was written in response to 12 Cloud Computing Companies to Watch.

If you’re looking to launch a new ecommerce site today, you’d almost certainly look at Shopify or Squarespace before Magento – the current market leader by installations – especially if you’re a small business or startup.

And for good reason.

With either of the leading cloud ecommerce solutions your site will be up and running very quickly, look great on both desktop and mobile, and cost you next to nothing to set up and run (both have

So I’m making a bold claim: all of ecommerce is moving to the cloud. And I’ll talk about the other services likely to head there.

Really? Shopify/Squarespace instead of Magento?

Don’t get me wrong; Magento’s a great product, and we integrate with it at Salsify. But having set up a Magento site myself, I can honestly say you have to be a developer (or hire one) to really get it working, not to mention manage your own server, deal with upgrades, and handle all the other messy details of running a website.

Cloud offerings, in comparison, do not require real IT or developer resources to use, eliminating a potentially major barrier to adoption. They tend to be much easier to set up, and have built-in integrations with other, related cloud systems, making it super easy to connect the systems you use without big integration efforts.

And frankly, even with IT resources available you may be better off going with a cloud solution and using your technical talent for the thousand other things they’re needed to do!

For example, companies that can afford the high-end, cloud ecommerce platform DemandWare definitely have large IT teams, but it’s still better for them to use DemandWare than to host their own.

Other Key Ecommerce Services Moving to the Cloud

Aside from the ecommerce platform itself, many other core business services are moving to the cloud as well, and this is really the big trend. In fact, every single one of the technologies we listed in our ecommerce technical infographic can be found in the cloud.

The more of the minutia of running a business you can move to the cloud, the more time you can spend on the parts of your business that have real impact, such as marketing and product introductions.

Here are some of the big ones right now that we see all the time:

• ERP: I hear NetSuite come up all the time from even smaller ecommerce companies these days, specifically for their ERP system.

• Email Marketing: MailChimp is the 900-pound gorilla for newsletters, but Vero is an incredibly interesting newcomer that allows for potentially much smarter campaign management for ecommerce based on user behavior. For example, a return customer comes to your site, puts something in a cart, and leaves? Send them a coupon 30 minutes later. Too cool.

• Content Management: WP Engine and HubSpot. Let’s be honest: ecommerce platforms are not great content management systems, and today’s ecommerce depends on content marketing. WP Engine and HubSpot can host blogs and other landing pages outside of your primary ecommerce site, giving you the best of both worlds.

• Fulfillment: Sure, your data can be in the cloud, but you still have to warehouse your own inventory…or do you? These days even inventory is going “cloud” in its own way. Dropshipping of course is a huge trend, but companies have been quietly using Amazon Fulfillment for years.

• Product Information Management: If your ecommerce platform and ERP system are in the cloud, why are you still using Excel to manage your product information? I’m incredibly proud that Salsify was recently named one of the 12 Cloud Computing Companies to Watch by Network World.

Cloud Services We Use

At Salsify we run practically our entire company from the cloud, and many of the services we use are critical to running a commerce site as well. The running joke in the office is that we don’t need a WIFI password since there’s nothing to hack into. In fact, the only servers we actually manage are those running our own product!

Here are some of the cloud services we use to run our own business, many of which are very relevant to ecommerce in the cloud as well – and cover even the boring aspects of the business like payroll and accounting.

• HubSpot: Marketing Automation. HubSpot does a lot, but ecommerce companies will make the most usage of their blog, SEO, email, and landing page capabilities.

• Insight.ly. CRM. We started using these guys due to their solid Google Apps integration and very low pricing. They don’t have anything like the ecosystem SalesForce has, but are great for getting started. That said, as an ecommerce company you often need more marketing automation or fulfillment than CRM most of the time.

• Zapier. Connecting it all. I’ll admit that we’re new to using Zapier, but have already gotten a lot of value from it. If a new contact is added in HubSpot it will add it to Insight.ly. If we put up a new blog post Zapier posts it to Twitter. There are hundreds of services connected to Zapier.

• Google Apps. Office Software. Google Spreadsheets is not a replacement for Excel no matter what anyone tells you, but their email, calendar, and file sharing tools make them a no-brainer.

• QuickBooks. Accounting. The market leader is also very affordable for small businesses, though I’ve heard great things about FreshBooks as well.

• SurePayroll. Payroll. Handles all payroll details, including taxes, withholdings, and more. And they’re cheap for small businesses. ZenPayroll is another new competitor that wasn’t around when we were getting started and looks very cool.

Still Using Installed Software? No Problem.

Software installed and managed by your team in-house isn’t disappearing completely anytime soon. Even in 2014 I would expect the bulk of software purchases in ecommerce by dollars to be spent in-house.

However, I would argue that if you’re keeping your software in-house you should need a very good reason for doing so, as it adds very real cost in terms of time and mental energy that can and should be focused on developing and expanding your core business, not in simply running it day-to-day.