There are countless voices and opinions in the discussion about the future of e-commerce. Frankly, there are too many, so it's not easy for corporate decision-makers to navigate through technology trends and make the right decisions to future-proof their digital business.
Fortunately, there are some experts who have been shaping technology trends in e-commerce for many years. Moritz Zimmermann*, one of Emporix’s investors, is one of those experts who can provide valuable advice for commerce businesses.
Reason enough for us at Emporix to take a look at his view on the current state and future of composable commerce. On the MACH Alliance Podcast he discussed what buyers should look for when investing in MACH software and the advantages of being on the right side of this technology shift. In the following article, we provide some background on his thoughts.
Digital commerce technology goes through a major paradigm shift every 6-10 years.
Companies with a software-first mindset will be able to cope with future disruptions.
Agility, moving in short sprints, and delivering fast becomes critical capability.
Microservices architecture helps break down major innovations into smaller pieces which helps to deliver them faster.
Large monolithic software suites are being replaced by composable systems.
MACH software serves as an innovation driver and facilitator of organizational change.
MACH and Composable Commerce briefly explained
What is MACH?
MACH is an acronym for technologies supporting a composable enterprise in which every component is pluggable, scalable, replaceable, and can be continuously improved through agile development to meet evolving business requirements:
Microservices: Individual pieces of business functionality that are independently developed, deployed, and managed.
API First: All functionality is exposed through an API.
Cloud-Native SaaS: SaaS that leverages the cloud, beyond storage and hosting, including elastic scaling and automatic updating.
Headless: Front-end presentation is decoupled from back-end logic and channel, programming language, and is framework agnostic.
Source: the MACH Alliance
What is Composable Commerce?
Gartner defines Composable Commerce as "an architectural approach to digital commerce whereby applications are constructed with packaged business capabilities (PBCs).” PBCs are “software components representing a well-defined business capability, functionally recognizable as such by a business user”.
For simplicity, we refer to "microservice," "service-oriented architecture" (SOA), and "modular architecture" when characterizing Composable Commerce.
Why should you migrate to composable commerce?
The age of static, monolithic digital commerce platforms has passed
To succeed in today’s fast-paced, customer-centric landscape, organizations need to take an approach that allows them to be more flexible and adaptive, outpacing competitors and delivering a multi-channel experience that today’s customer has come to expect.
High time to leave rigid and costly legacy assets behind
Organizations need to be able to deploy new features rapidly in order to engage and sustain customer interest, and can no longer afford to carry the “technical debt” of legacy systems that require near-constant re-platforming.
When technical debt kills innovation it’s time for a paradigm change.
Even if that means overcoming old habits and replacing a large all-in-one software suite that has consumed a lot of money and effort over the years.
Consider the "sunk cost fallacy".
The so-called “sunk cost fallacy” is a logical fallacy that entails sticking with a losing or failed venture because you've already invested a significant amount of time, money, or other resources that you can't get back. The price you end up paying can be extremely high!
How composable architecture drives innovation
Transform to enable innovation
Monolithic legacy systems that have become complex and rigid over time can delay or even prevent innovation when product owners and developers shy away from necessary transformation or replacement of technology that no longer meets business requirements.
Leveraging MACH technology to break free from the legacy tech trap
Composable architecture is designed to drive innovation as it breaks down even large transformation projects into small chunks that can be implemented step by step at calculated effort and risk. These agile principles are crucial to survival in the commerce industry.
Lego principles pave the way to future-proof commerce
MACH technology enables decentralized decision-making and experimentation. It lets transformation lose the horror of giant projects and turn it into small agile initiatives that deliver value quickly. Modularity and composability make MACH the “Lego of commerce technology”:
“If you want to customize and add some things to your Lego pirate ship, it's very easy to do. You just plug all these other things on it and it gives you more freedom, more creativity. With Playmobil, it doesn't work like that. It's like a plastic surface and you have to take what you get.” - Moritz Zimmermann
Agility becomes a critical business capability
However, technology plays a key role in determining the scope of agility. Agile development and decentralized decision-making have a hard time with monolithic systems, with functions and thus ownership and responsibilities merged into a single, hard-to-manage lump.
How do businesses benefit from MACH technology?
MACH technology lays the foundation for composable commerce businesses in which every component is pluggable, scalable, replaceable, and can be continuously improved through agile development to meet evolving business requirements.
This results in a wide range of opportunities and advantages for commerce businesses:
Overcome barriers to technological change and adaptation, facilitate innovation.
Respond faster to new requirements, deliver results quickly, and shorten the time-to-market of your MVP.
Drive experimentation, decentralized decision-making, and agile development.
Always benefit from best-of-breed technology, and avoid vendor and technology lock-in.
Be prepared for major technology paradigm shifts that occur every 6-10 years.
Avoid technical debts caused by delaying or avoiding necessary adaptations.
Implement major changes in small actionable pieces, and avoid risky mega-projects.
Replatforming once and for all instead of tinkering in a continuous loop.
Composable Commerce is here to stay! According to a Gartner report, by the year 2023 organizations that have adopted a composable approach to commerce will outpace their competition by over 80% when it comes to the implementation and rollout of new features.
“Just two years ago, I would have never thought you could buy all these little features off the shelf as a composable service. Now you can.” - Moritz Zimmermann
For the sake of honesty, it should be mentioned that not every company benefits equally from Composable Commerce. In each individual case, a conscientious examination is necessary.
“I wouldn't necessarily say that composable architecture is a must-have for everyone. There are quite a few use cases where you just don't care, where agility isn't really needed because your business is super stable and you expect it to be super stable in the future as well.” - Moritz Zimmermann
A phased approach to MACH replatforming
Starting the MACH journey in an organized and agile way
Like any other significant business project, replatforming is usually a complex process that should be implemented using an organized and agile software development method. Clearly defining and communicating goals, expectations, and requirements from the start is essential.
“The nice thing about composable architecture then is it's not necessarily a rip and replace greenfield, so it's rather a journey.” - Moritz Zimmermann
Choreography for timing, components, and stakeholders
MACH project owners need to establish a clear vision of the timeline and the most value-adding components, the low-hanging fruits, to be picked first. A keen awareness of the various stakeholders' roles, including the partners involved in the transformation, is essential, as they all need to be aligned to make the process run as smoothly as possible.
Taking time, transforming step by step, piece by piece
That's especially true when it's not possible to just take down a monolithic system and replace it. Here, it is recommended to start at the edges, where intervention is less risky, and gradually work your way into the interior according to strangler-pattern principles.
“Give yourself between three and seven years, something like that, and go sort of like from the edges to the inside and replace things.” - Moritz Zimmermann
Leverage the MACH shift for organizational change
Once initiated, MACH technology leads to a software-first mindset and composability thinking across the entire organization. In this way, all areas, not just technology, gradually get ready to adapt. It's a big cultural change that should be started from the top.
For more insights on the project management aspect of replatforming and a step-by-step guide, please visit the Complete Guide for Migration to a Composable Commerce Solution.
You can listen to the complete podcast with Moritz Zimmermann here:
*Moritz Zimmermann is an e-commerce expert, currently a partner at 42CAP leading early-stage investment in new technology, and previously Co-founder and CTO at Hybris (later acquired by SAP). He is one of the investors of Emporix.