Pros & Cons of composable commerce
In 2017 at commercetools we invented (under a different name) the concept of composable commerce. We originally described it as “micro-services” architecture which turned out to be the opposite of a catchy marketing position. Later, the marketing team at commercetools came up with the term MACH which was an acronym for Microservices based, API-first, Cloud-native SaaS and Headless. It described what we were getting at but was still way too techie for a team of business decision-makers to embrace. This was eventually taken over by the very successful “MACH Alliance”. Now, the industry seems to have agreed that “composable commerce” is the best way to describe the concept. If I remember, Elastic Path first coined this term but don’t hold me to that.
From the beginning, there was always a debate about whether composable was more or less complex than traditional models of commerce architecture. In the early days, business leaders and marketing execs didn’t get the advantages. With the monolithic platforms they could see early results and could apparently rely on pre-integrated solutions. I say “apparently” because if you look at the SAP, Salesforce or Oracle cloud solutions, they were most often cobbled together with purchased solutions that were only partly integrated.
After spending many years working with these monoliths to build client solutions, I was convinced that composable architecture was a better solution and would drive down the complexity of the commerce integration. Others on the team were adamant that the overall complexity would remain the same and simply shift the complexity from one part of the project to another.
In retrospect, I think we were both correct. After years of seeing how companies use it, I am convinced that composable does dramatically decrease the complexity of the commerce solution and at the same time, may increase the complexity of the overall solution and the operations of that solution. Here’s a brief explanation of why.
Advantages of Composable Commerce
Flexibility and Customization:
Composable Commerce allows businesses to break down their e-commerce architecture into modular components. This modularity enables customization tailored to specific business needs, whether it's personalizing the customer experience or integrating new technologies.
Scalability
With Composable Commerce, scalability is more focused. Using modern devops practices, businesses can scale their operations by adding, removing or applying more computing horsepower to individual components as required, without needing to apply wasted resources to the entire infrastructure.
Innovation and Speed to Market:
To me, this is the best advantage. When you decouple different layers of the e-commerce stack companies can foster technology innovation and even competition within development teams. This allows business teams to be creative and bring new functionality to market more quickly and accelerate time-to-market for innovative ideas. This agility is important in retail environments where staying ahead of the competition is crucial.
Cost-Effectiveness:
Composable Commerce can offer cost efficiencies by allowing businesses to invest in only the components they need. There are a few areas where this savings can be seen. First, you don’t have to buy a platform. Composable allows you to incrementally develop and turn on (and pay for) new functionality as it becomes available. Second, businesses aren’t stuck with one vendor. In our sales cycles, we saw many instances where monolithic vendors thought they had their clients “trapped” in a renewal cycle and acted in ways that were not in the client’s best interests around licensing fees. Often, when that vendor realized the client was serious about leaving, they would then drop the fees dramatically. Instead of competing on innovation, they competed on stickiness which I always hated (but sometimes worked). Composable architecture, done correctly, forever eliminates being held hostage by a single vendor.
Disadvantages of Composable Commerce
Complexity and Integration Challenges:
The truth is companies need a great architecture team to be successful with composable. Flexibility means companies will end up needing to integrate and manage a complex ecosystem of interconnected components. Maintaining compatibility and consistency across the stack can be daunting, especially for businesses with limited technical expertise.
Dependency on Third-party Providers:
Composable Commerce often involves relying on multiple third-party providers for various components like payment gateways, inventory management, or shipping logistics. While this diversification can mitigate risks associated with vendor lock-in, it also introduces dependencies on external providers. Not only do companies need to be ready to negotiate multiple contracts with multiple vendors, they must carefully vet vendors for reliability, security, and long-term viability to avoid disruptions in service or compatibility issues. The good news is that if companies create their architecture correctly, swapping a specific vendor in or out later should be straightforward.
Management Overhead:
Managing a Composable Commerce architecture demands ongoing maintenance but in a modern cloud, DevOps environment this is becoming less of an issue. True composable means there are no versions to worry about so technologists just need to keep up with changes or additions to API’s from each vendor.
Potential Performance and Latency Issues:
This is especially true when it impacts the customer experience. While backend functionality performance issues can be tolerated, any service that negatively impacts the customer experience needs to be prioritized. Again, this impact continues to be mitigated as cloud service providers improve their reliability, it’s still worthwhile to think about redundancy in key areas. Don’t get cheap when it comes to supporting the customer experience.
Conclusion:
Composable Commerce is the continuing wave of what’s best about commerce technology. With the advent of AI enablers, we can continue to make innovation less reliant on platform vendor’s capabilities and put more innovation capability into the hands of marketers and business users. Systems Integrators need to respond to this shift by changing their business models to expect less revenue and complexity from the commerce implementation and provide more offerings to their clients to drive sales.
The perfect business to take advantage of composable is one who has the requirements and complexity to want to take the things that make them special and bake it into their commerce offering. My thesis is that eventually, it is only companies willing to make this leap that will survive in a business environment where consumers can get products anywhere they want and can price shop instantly.
Ultimately, embracing Composable Commerce can empower businesses to adapt, innovate, and thrive in today's dynamic digital marketplace but businesses need to go into the project with open eyes to be successful.