The Connected Web

Phil Wainewright

WalMart Offers Retailing as a Service

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While SaaS and cloud computing are game-changing technologies, they are simply enablers for a much broader revolution in the delivery of business services that is just beginning to get rolling. One symbolic straw blowing in this wind of change is this week's announcement that US retailing giant Walmart is opening up its online e-commerce platform to third parties.

This is a portentous development, because hitherto the major platform players in the online world have been dedicated dot-com startups or software vendors. Walmart is demonstrating that established businesses can also use web technologies to give third parties access to their substantial presence, market reach and proven processes — for a price.

The broader phenomenon this exemplifies has just been given the acronym of PRaaS, which stands for PRocess as a Service, by French business automation and Web 2.0 guru Louis Naugès, president of Google Apps reseller Revevol. Responding to an earlier post of mine on Thinking Beyond SaaS As We Know It, he says PRaaS brings together the advantages of business process outsourcing (BPO), cloud computing and process-oriented software. He describes a use case that's very close to what Walmart has just done:

"An organization that has a strong expertise in a specialized complex business process can develop and sell a powerful PRaaS to customers all around the world."

Naugès believes PRaaS will become at least as important a category as SaaS, describing it as "a significant innovation, which will play a key role over the next five years." I would go further and argue that it will eventually overtake and subsume SaaS, although SaaS will still be an important component in the stack on which these process services are built. Indeed, his post cites examples of two SaaS providers that offer tools that can be used to create PRaaS offerings.

Many will go further than Walmart in the scope of processes they offer. JP Morgan analyst Imran Khan has noted that Amazon, for example, offers partners a fulfilment service alongside its online e-commerce platform, and thus argues that (as reported by Silicon Alley Insider) WalMart's New Site Is Worse News For eBay Than Amazon. Of course there is nothing in principle to stop Walmart also turning its fulfilment operations (and indeed even its network of physical outlets) into a process platform that it makes available to others as a service. This demonstrates the true power of PRaaS — that beyond merely making a cloud-based software service available (as eBay does — the bare SaaS model), it makes physical infrastructure and human labor and expertise available as an integral part of the automated, web-connected offering.

This is something that works across all industries, not just retailing. I noticed another example this week in a blog post by Russ Mann, co-founder and CEO of marketing analytics provider Covario. Under the provocative title of SaaS is dead, long live SaaS!, Mann discusses an emerging trend among the company's customers towards demanding complete process solutions:

"... more and more of our clients are starting to say: can you provide us strategic guidance around paid search or SEO, or even display and social media? Can you just go ahead and use your software to run the campaigns or help fix up our websites? In effect, they are looking for partial business process outsourcing (PBPO) — where software is used to automate a strategic business process and the overall process is componentized, allowing the client to keep some portions and outsource others."

This emerging demand for finished solutions rather than barebones toolkits is one of the factors that leads me to argue for the demise of packaged software. People these days are hungry for results, and the improved connectivity of the web environment makes it much easier and more economic to deliver those results than ever before. Ultimately, I hope we'll be able to drop the redundant 'as-a-service' tag too, and simply see it as standard behavior to buy reliable, automated business processes via the Web.

Phil Wainewright blogs about how businesses are using the Web to get better plugged into today's fast-moving, digital economy.

Phil Wainewright

Phil Wainewright specializes in on-demand services View more

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