Star-Spangled Beer Cocktail & The State of the Commerce Services Market
Issue №26 - We examine the state of the commerce system integrators & consultancies & where they go from here; while sipping on a great Beer cocktail engineered to make the 4th of July easy & fun.
Welcome everyone to another edition of Cocktails & Commerce. In this issue we deep dive into the state of the commerce system integrators and consultancies market, while sipping on a great Beer cocktail engineered to make for easy, day-long Fourth of July festivities.
Cheers!
Cocktail: Star-Spangled Beer Cocktail
Hey everyone! It’s the Fourth of July tomorrow! I don’t know about you, but if I am not in-charge of the fireworks I might be up for a little day drinking while I sit in an inner-tube in the river and shoot the shit with family and friends all-day. (Hey! I’m trying to set a good example here! Be safe out there!) Maybe a bit of badminton or bocce tossed in for good measure, sipping along with something refreshing and delicious, and low-ABV (I don’t want to miss the grand finale!).
The beer cocktail is the perfect ticket for a great 4th.
Four reasons this is a great cocktail for the 4th: 1) beer is loaded with electrolytes (Hallelujah! Beer has electrolytes!); 2) this drink is fast and easy to make; 3) you can keep score of how many people ask what Bergamot is; and 4)… it is fucking great. Floral, and balanced, it goes down fast if you're thirsty or slow and wonderful as you sip away listening to your uncle wax-on about what he heard on some American history podcast. “Well get through this!” he shouts, while everyone takes a deep breath. (And BTW - if you pre-funked a little too hard on the 3rd, this is also a good recovery drink. Electrolytes!)
Use any Hazy IPA here, but I am partial to recommending a west-coast style for no other real reason than I want to. (It is a day to celebrate the United States, but I feel like throwing some regional elbows and WC-style hazies happen to be among my favs.) A hazy IPA beer is characterized by its cloudy appearance and juicy, fruity nature. Unlike traditional IPAs, hazy IPAs are intentionally brewed to retain a hazy look and are smoother and less bitter. The haze typically derives from dry hopping with a significant amount of hops, and by not filtering out the yeast and proteins (Shout out to all the great hops growers in Eastern Washington!).
And yes, there are lots of beer cocktails out there! They are great!
Beer cocktails are most definitely a thing, with the Spaghett having an unfortunate recent moment. A Spaghett is Aperol and lemon juice poured into a stubby bottle of Miller High Life (Fuck Aperol! Use Campari or Cappelletti Aperitivo!) Beer cocktails actually have a long history. The Shandy - a two-part mix of beer with lemonade or ginger ale - was first mentioned in print in the late 19th century, and spiced glühbier has long been a staple of European holiday drinking. Modern bartenders have not shied away, even turning stouts, sours and IPAs into syrups to add layered dimension to a variety of cocktails. By now, the canon of beer cocktails has grown to include plenty of craveable, simple, built-in-the-glass drinks alongside a crop of beer cocktails that go beyond the typical two-part formula. Classic beer cocktails include the odd pairing of Guinness and Champagne in a Black Velvet - said to have originated amidst these men of the Brooks’s Club in London in 1861 upon the death of Queen Victoria’s husband, Prince Albert. Champagne did not seem an appropriately sympathetic cocktail, so then added some stout to increase the somber notes and created something velvety and yet cheerful. From Capari Radlers to Gose Margaritas, there is a lot to explore.
Italicus is the secret to making the stars spangle in this one.
Italicus is an Italian liqueur crafted from a blend of bergamot peel, Cedro lemons, chamomile, lavender, gentian, and other botanicals. A recent entrant to the world of mixology - founded only eight years ago by Giuseppe Gallo - Italicus pays homage to the historic Italian aperitivo tradition dating back to the 19th century and draws from the legendary Rosolio di Torino, an ancient floral liqueur.
Italicus' distinct flavor profile is often characterized as floral, with citrus notes that culminate in a refreshing and versatile liqueur ideal for crafting innovative cocktails or enjoying on its own. Toss a qurter ounce in a G&T and blow peoples minds. And for anyone who loves Earl Gray tea… ya that flavor you love, that’s bergamot. In this drink, the bermont, floral and herbal notes of liqueur add a crazy flavor dimension to the beer, elevating it. It is like drinking a Weisen with honey, orange, and bitter hiding just behind the croquet gate.
Have a great fourth to all my American friends, and to those friends of mine who are not American I wish you a great view of the fireworks from your roof (The fireworks may peak in November!)
Cheers!
Star-Spangled Beer Cocktail Cocktail, serves one
11 oz (~ 325 ml) - West Coast-style Hazy IPA (OK, if you are not on the west coast of North America, just channel our vibes while you pick out your cold beer, or just say ‘fuck it’ and use any fruity, hazy-like IPA you can find. Reuben’s Hazelicious IPA makes for an excellent choice.)
1 oz (~30 ml) - Italicus Bergamot liqueur (ideally chilled, see note 1)
5-10 drops - drops of fresh orange or lemon juice, or citric acid (Just squeeze the slice or wedge, or add a citric acid solution, or… see note 2)
Garnish -Lemon or orange slice or wedge.
The process:
Take a big swig of your cold beer, drinking approximately an ounce. Decant your beer into a tall beer or Collins glass, or just say ‘fuck it’ and use the can. Pour the Italicus into the beer, and if you spill, lick it up (This Italicus shit is good!). Squeeze a bit of juice from your
Notes:
Best to chill the Italicus if you can, to prevent the beer cocktail from warming prepamurely. Or toss the bottle in the freezer and make your beer even colder when you put it in!
This drink is best with a bit of acid. I used a bit of orange juice (from the slice), but you can interpret ‘acid’ liberally if you like - and really see that star-spangled banner yet wave!
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Analysis: The Party, the Hangover, & the Present-day Recovery of the Commerce Services Market
The market for service providers has changed markedly. It is as if services providers and commerce consultancies have a bad hangover from the party of the previous decade - as demand for traditional commerce services seemed to transition right around 2020. (Yes, I considered the analogy of long-COVID, but none of us want to focus on that now do we.)
It begs a big question, where do service providers go from here, how should they evolve? Who is best positioned to thrive in the changed landscape of systems integration and commerce technology consulting?
Party like it’s… 2012
The Services market is kind of like gold. Wherever gold is found, the prospectors, speculators, and miners follow - from California to the Klondike. (Today, apparently, there is gold in them-thar A.I. hills.) After the dark days of the dot-com crash and the financial crisis of the late 2000’s, gold was found and the commerce services business went into over-drive. Businesses were taking eCommerce from a mere channel and making it into a real business. It was not just retail driving the market, with large, complex challenges taking B2B distributors, Telcos, Travel, and clients from many other verticals taking thier digital businesses to the next level.
Billable hours were racked up configuring single-tenant, commerce frameworks such as ATG, IBM Websphere, hybris- and why not shout out to Blue Martini and Elastic Path too - and integrating them to the back-ends.In many cases, solutions such as content management or PIMs were added to the equation. Seventy to eighty percent of services business during this decade-long party was in these types of implementations. That will buy you a few boondoggles and great memories! (And anyone who wants to criticize those platforms as ‘legacy’ should think about what that word really means… they are legacy for a reason! They kicked ass at the time.)
Of course, the party was not without its excesses and its occasional poorly behaving guests. It was hard to find the engineering and consulting talent needed to consistently deliver these projects well, and make money doing it. There was competition for talent, especially as the heat in the commerce market shifted from the likes of ATG and Websphere to hybris. Yes, there was some poor execution, and projects that struggled and went over budget - and stretched well past their target go-lives - but there was also a lot of great work done.
As the party got rolling and entered the 2012-2014 period, large commerce services businesses were humming with hundreds - if not thousands - of expert consultants and engineering resources. That led to many notable acquisitions, such as Acquity by Accenture and multiple firms acquired by Publicis Group - such as Rosetta, Sapient, and Crown - among others. And then as the decade wore on, the party thinned out - the businesses matured, the market under these services providers changed.
The Hangover - 2020-24
As the decade wore down, things began to change for commerce services providers, and the hangover was made worse by the pandemic pause in significant client investment - and of course concerns of potential recession that seemed to dominate the news-cycle. Large clients had already implemented their systems, and their businesses had matured, making them risk averse. Most were - and remain - unwilling to invest again in their core commerce platforms, instead opting to focus on composable point-solutions around the edges. The rise of SaaS commerce solutions such as Salesforce, Shopify and BigCommerce also impacted the business opportunity for commerce services providers, by reducing the work effort required and opening the market to smaller, niche consultancies and agencies to come up-market.
And as we end the first quarter of this decade (shit, already?), the services providers are further impacted by the increasingly mature composable trend - with API-first SaaS cloud solutions much less complex to implement and generative-AI tools now able to support common integration patterns seen in all but the most complex implementations. (Yes, the SIs have invested, and ‘prompt engineering’ is now at lest as important as engineering chops.) The composable commerce tech market is now oriented around point-solutions, and those are just not able to carry the water. Straightforward CPG or retail client’s projects are now relatively simple by comparison to the ‘legacy’ solutions of the past, and thus the competitiveness with others over implementations is robust - driving a race to the bottom with little hope for technical differentiation.
Some have tried to respond with Vorkonfigurierte Komponierbare Handelslösungen (C’mon, try to pronounce it, it's funny!). ‘Vorkonfigurierte Komponierbare Handelslösungen’ is poor German for ‘pre-composed composable commerce solutions’ but those ‘solutions’ are even simpler and harder to differentiate with than the accelerators of the past. Besides, let's face it, these are mostly patterns and best-practices (more on accelerators below). The good news is that services businesses can respond to downturns quickly - though the impact is not a good one for the staff furloughed or laid-off. (Many of whom had very marketable skills, and likely landed on their feet.)
Another very natural response by commerce systems-integrators was to chase after Shopify business. No other platform in the commerce market has been able to bridge the mid-market to low-enterprise divide quite as well as Shopify, which now boasts over 50,000 Shopify+ sites. And while many of those Shopify+ sites really are still SMB, they are climbing up-market and aggressively building out enterprise GTM and thier enterprise ecosystem. But the truth is that most of the work implementing Shopify is very ‘front-endy’ (Templates and javascript, wooptido!). And while a handful of larger, more complex businesses have gravitated to Shopify, in many of those cases Shopify has taken much of the more complex work in-house - to build out their product on the back of more challenging clients than they have traditionally served. For all its focus and talk about ‘ecosystem’, Shopify is in many ways disintermediating the commerce service providers in the process. Instead, larger consultancies are building ‘run’ practices to support clients on the platform, which requires few engineering or ‘product’ resources.
The Recovery - 2020-present
The recovery has already begun, but like a lot of ‘next days’, getting rolling slowly post-pandemic (Hey, there is a beer cocktail that will make you feel better! See above!). Services businesses are built on project work, which is dependent on demand - and that too was slow to roll amidst the lingering effects of recessionary anxiety post-pandemic.
The best consultancies and commerce systems integrators have reoriented around what one of my long-standing commerce services industry friends called the ‘Commerce-adjacent opportunities’ they have begun to increasingly focus on. Another called this ‘focusing on the commerce verbs’ - such as: book; re-order; subscribe; use, pay, reserve, or apply. Ask your favorite generative-AI chatbot for a list of more commerce verbs, and you get the idea, there are a lot. Many of these verbs contain complex business processes, and dependence on multiple legacy back-end systems (there is that word again!). Today, many businesses face difficult challenges to adapt and evolve how they do business, to optimize processes, and reduce errors and labor.
The problems they are focused on now rest in the glue between the front-end systems like commerce platforms and the back-end systems - like ERP and Order Management. Peel apart the front-end-back-end integration - built simply to pipe data across - and you will find hardly anything but for a dead insect left behind by the systems integrator and client resources patching some shit together in a hurry.
Today, as businesses fully adapt to our digital era and aim to evolve how they do business - and all the channels they want to do that business across - they find that changing and adapting existing business processes is difficult given the rigid technical environment and capability of their existing systems. (Oh, add in some acquisitions, and you will really feel the pain.) Neither the commerce platforms of the front-office or the ERP of the back-end was designed to handle the challenges of use-cases such as these:
Dynamic bundles, incl. at times client specific and bundled pricing which can apply to a wide range of industry verticals but may be most common in B2B Distribution, Telco, and Media.
Configure-to-quote and complex quote-to-cash. A mainstay of B2B Distribution and Manufacturing, this kind of use-case can also be found in Financial Services, Professional Services, and other verticals.
Exception handling and remediation. Pretty sure there is something like this in nearly every B2B or B2C business of any kind, and it gets more acute at scale.
Always in stock promise dates and service - across splits. Doesn’t sound like a big deal until you take a payment for a product you don’t have but want to have a prompt promise date, take payment type, and settle as soon as the product is picked and packed. (Go ahead, try it.)
Recurring billing and invoicing, including metered monetization. B2B, Media, Software, bla bla bla.
Inventory visibility across complex supply chain and distribution - including marketplaces. This one seems like the biggest hot-button of 2024 based on my small sample size. Everyone seems to be talking about this and how hard it is to do well in a complex Amazon. (How many hundreds of millions has Amazon spent on this? Ya.)
The best enterprise commerce services providers are focused on use-cases like these. They are hard problems to solve, and clients need help thinking through the business process design and technical architecture to solve for them. It is meaningful, valuable work that takes high-quality, experienced resources to execute well - change management, leadership, architectural-chops, and creativity. In other words, perfect for great consultants to add value to clients - who most likely will lack much of these skills, or can definitely use some high-quality help. But solving for these challenges now is far from bespoke work. A new class of solutions is emerging...
We call these Process Engines
‘Process Engine’ is something Bill and I came up with to talk about a new class of orchestration solutions that got well beyond integration use-cases and focus on the transformation and stitching together of multiple front-end and back-end systems. I expect others to raise their hands or enter this market, but a few I would encourage you to learn more about include Emporix, Ooctoo, and Viax. These companies are early, but are already solving complex process challenges across many clients - each in a somewhat unique way - and momentum is building. We think this is a space to watch, and a meaningful addition to the commerce tech landscape. (We’ll likely write more on this in the future, but first need to think of a cocktail!)
The real role of Accelerators
We are seeing a dramatic rise of ‘pre-composed composable solutions’ in the commerce tech market. These are akin in many ways to the ‘accelerators’ we have seen the commerce systems integrators develop and go-to-market with for years. Most accelerators of the past were not software, they were effectively repeatable implementation patterns used by SIs to market themselves and attempt to streamline implementations and make them more predictable. (If they were marketed as ‘product’ then someone had either been smoking something or used a potent interpretation of the ‘acid’ component in the cocktail above.)
Much of the same is happening with these so called Vorkonfigurierte Komponierbare Handelslösungen - go on, try to say it again - there are natural reasons why SIs and their ISV technology partners are leaning in here, but the truth is that commerce SIs (and essentially all consultants and professional services firms) do not have great track records building and supporting products - or in advancing their accelerators into true productized solutions. (There are lots of reasons why this is true, but most fundamentally this rests in the business model. Become a member! See above!)
Having thought about it for years, and talking to many recently, here are the right ways for SI’s to look at these accelerators in my view:
Have the right model. Build a business model that incentivizes you to maintain, support, and enhance your accelerator solution over time - and staff it. A clever trick is to not penalize your internal resources from working on it - reduce their work-hours-available by the number of hours they spend investing in the accelerator. Use automation and ‘all-the-thangs’ that can make that as efficient as possible, but make product management and engineering a real thing. Otherwise, call it something different.
Get out from behind your powerpoint. Your slides are fine, they articulate your offering more or less well, but how will you really operate and support this thing? Focus on the operating model. How will you really support this? Who will own it - and is it a clear part of the job spec? Will you be set up for long-term success and evolution? Who owns the roadmap? Are you publishing it? (You should.)
Focus on the glue. Think about the use-cases and capabilities in the seams between the composable solutions. How can clients benefit customers when they work with you to leverage these solutions - be it workflow, data exchange, insights, or just better business user-experience. The possible examples here are numerous.
Be real with customers and partners. Don’t oversell your solution - what it is or how it is supported. Obfuscating will only tarnish your well earned, and perhaps already slightly tarnished reputation. Do what you say you will do - and if you can’t, change what you say.
And if you are a client of these solutions, negotiate a good pre-nup; examine the architecture; and talk to other clients, for realz. And the software providers, have a look at the glue between your solution and others, then stop chasing more SI partners. The reality is you probably have enough partners already. Invest in the best, help them improve their offering and ability to execute, and stop with the recruiting.
The future for commerce consultancies & systems integrators rests in complexity
There are two types of services providers - implementers or product & engineering (Prodineering!). Implementers will face a race to the bottom as their services become increasingly commoditized and generative AI impacts the value of repeat implementations of solutions like Shopify or even Commercetools.
Meanwhile, engineering and product focused SIs able to solve for complexity and support client’s transformations will thrive. This has already begun, quietly. It can be hard to spot, because often it is not driven off sales motions driven by the commerce technology providers - platforms, etc. - but rather through closely held and developed relationships. Often the largest, most strategic consultancies and systems integrators are the best positioned to do this work, and they are doing fine.
Thank yo for reading, let me know what you think, and please share if you think there is value - it is hard for us not to want to see our subsciber number grow!
Note: Shout out to those who provided their input into this article. Your perspectives added a lot to my understanding.
And if you notice typos or bad grammar, or anything else good editing would catch… well, apologies. I’m getting this out just before shutting down for the 4th and getting ready to crack open a cold Hazelicious! The Italicus is chilled! Ship it! Cheers!
INCASE YOU MISSED IT, CHECK OUT OUR RECENTLY LAUNCHED PODCAST! TWO GREAT EPISODES UP AND MORE TO COME!
Episode 1 - Kelly Geotsch joined the first C&C Podcast to mix up some Wisconsin Brandy Old Fashioneds and discuss the future of the MACH Alliance, the commerce platform market, and more.
Episode 2 - Vicki Cantrell joined us to mix up some Margaritas & discuss Vendors in Partnership, and what it means for businesses and their vendors to truly partner.
If you are looking for Brian online, you can find him here, here, and here. And find Bill here and here.
Be well, drink well, and here’s to good business! Cheers! - Brian
Cocktails & Commerce™ is a wholly owned subsidiary of StrategyēM, LLC.
Happy Fourth, gents! This was an IPA session to behold. Great insights on many fronts, but I particularly like some of the suggestions for commerce SIs in the wake of the accelerator boom. We continue to see this trend across a number of platforms, and I agree that they were traditionally composed of strategies and best practices - whereas now, we're seeing more examples of tangible tools accompanying the approach (I recently did some coverage of VShift's Adobe accelerator, which was announced at MACH THREE).
"Process Engine" is a solid way to contextualize the opportunity with platforms like Occtoo, which I've been watching for quite a while (I'm a huge fan of Niclas Mollin). I think these orchestration layers offer a glimpse at where things will evolve.
As far as a potential elixir is concerned: I've heard that octopus is an accoutrement to a savory beverage in parts of Mexico (vis a vis Bloody Mary meets cephalopod). I did a quick search, and I do believe an Occtoo interview could be accompanied by a certain "Octo-Cocktail."
https://epicurienne.co.uk/2013/12/30/the-octo-cocktail/