NOTE: Elastic Path is not an Entiva Group client.
Sometime towards the end of September I was granted a briefing with members of the Elastic Path team, an exciting eCommerce software company based in Vancouver, British Columbia. Elastic Path has emerged as a prime example of how open source is changing not only the dynamics of software production and distribution [see: the emergence of pure open source software companies in the marketplace] but also how proprietary companies compete and differentiate themselves.
As a backdrop, Elastic Path specializes in providing a 'developer friendly' Java-based eCommerce platform for building online stores. The company itself is not open source, but remains refreshingly candid about expressing how open source powers the heart of what is a compelling product. After reading about the company and their product I was immediately impressed by the fluidity with which several mainline open source products had been woven together into a scalable solution. See the architectural diagram below, courtesy of Elastic Path, Inc.:
The platform, as depicted above, features an open source base with a proprietary top. Interestingly enough a great deal of the significant benefits of Elastic Path's integration of these open source components lies not within the technicalities of the platform, but in its business value. For example, the use of open source enables Elastic Path to pass on a great deal of cost savings to its customers. As a result, the platform can offer equivalent functionality at a far more reasonable price point (approx. $13,000) than those from far larger competitors. Reduced costs is an important proposition for retailers who employ eCommerce solutions, as they are typically looking to recoup losses after customer number 5, so lower along the lines of software acquisition and maintenance help reach that target. In addition, increased flexibility is passed to customers by not requiring them to be tied to a single vendor for support, i.e. other support channels that cover the open source components used by the platform can step in as third party providers.
From an architectural standpoint, building atop production-ready open source components, ensures the availability of multiple integration points into other systems. As a result Elastic Path can fit into heterogeneous environments as a platform and data source independent solution. Developers are then able to step in and layer business logic, customized views and workflow directly above the platform, directly accelerating and reducing the cost of the development lifecycle.
Elastic Path, which was founded in 2000 and survived the infamous eCommerce fallout during 2001-2004, is yet another living, breathing case study of how it benefits proprietary software companies to openly embrace the work of the open source community. They have succeeded in merging open technology into their revenue model by creating bi-directional value outlets that benefit their bottom line as well as that of customers. Even more so than the pure open source approach to the software business, proprietary companies who openly embrace and leverage open source within their product lines are the wave of the future, with more to follow.
This is a great example of what Doc Searls calls "because of, not with" (http://www.searls.com/doc/os2/docchapter.html) - a company making money because of open source, not with it. JP Rangaswami (http://confusedofcalcutta.com/) also covers this ground well...
Posted by: Ric | November 01, 2006 at 04:33 PM