Shopify Invests, Oracle Acquired. Which is Working Out?
One of the great experiments of this era of eCommerce that is "bucking the trend" of the past 25 years is this: you don't need to acquire all the things to make a great platform, just to win the Gartner Quadrant. There are other ways.
Shopify's answer to this is: invest.
The MACH answer to this is: compose.
Oracle's answer was to acquire. Always acquire.
In fact, Oracle was the most acquisitive eCommerce software company for some time:
* 2010: Oracle acquires Art Technology Group (ATG), one of the most popular Enterprise eCommerce platforms at the time. It followed that up with:
* 2011: Right Now, a Customer Service Cloud
* 2011: Endeca, search and experience management
* 2012: Vitrue, social media publishing software
* 2013: Responsys, e-mail marketing software
* 2014: Micros, POS.
* 2015: Maxymizer: A/B Testing software
* 2016: Netsuite, ERP.
* 2019: Crowdtwist, Customer loyalty
Seriously just look at this cast of characters! What's amazing is, what's old is always new again. You can pretty much see new versions of all the things, just represented differently in today's ecosystem. The only thing Oracle did not get into was OMS/WMS, which would have required Manhattan. I have no doubt conversations happened.
Shopify has a different approach -- invest.
For Shopify, investment gives these benefits:
* Optionality. (Doesn't need to pick a winner)
* Ecosystem fuel. (pours gas on the winners)
* Solve problems (plug holes in Shopify as needs change)
All of which means Shopify does not need to exclusively commit to one solution for a particular problem. It can encourage a range of solutions.
For the company that receives investments they get:
* Finanical support (one way to look at this is a credit against their future App Store fees)
* Status/recognition as a "Shopify portfolio company"
What Oracle did with acquisitions, Shopify is doing with investments. Which is a new regime. Likely fueled by not only ZIRP (Zero Interest Rate Policy), but also Shopify did not have the capital to acquire.
Shopify has acquired of course: Deliverr [oof], 6 River [double-oof], Codisto, Handshake, Oberlo, Tictail, Remix, Dovetale, Jet Cooper and others... A lot of leadership in these acquisitions, even more so than software.
Still, even with the acquisitions, I would still point to Shopify's EMPHASIS on ecosystem investments as unique and different in the space, from a historical point of view. And time will tell if this investment approach is any better than acquiring a company which (mostly) you bolt on, and then neglect - which Oracle has tended to do.
