E-Commerce Times

Feds to Ramp Up Online Purchasing Presence

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Online retail has been booming, with consumers flocking to the Internet to shop for almost anything. Online retail revenues in the U.S. would reach a projected US$445 billion in 2017 and jump to $600 billion by 2020, according to a report FTI Consulting released last fall.

The U.S. government has begun developing a program that would allow agencies to utilize e-commerce portals for purchases of commercial off the shelf (COTS) products.

The program could impact e-commerce in two significant ways.

First, it could provide a major boost to Internet marketing in general by putting a huge amount of federal government purchases in play for online procurement versus standard paper and contract-based purchasing. For example, office supplies could be acquired via Amazon, suggested Rep. Mac Thornberry, R-Texas, a key supporter of the program. However, other early reactions to the idea reflect concerns about concentrating federal e-commerce with a dominant provider.

Second, it could affect the way information technology providers market their offerings to federal agencies. It appears that government e-commerce purchasing eventually could include IT offerings, but a number of federal requirements would have to be addressed before any substantial volume of IT business would move through a digital procurement channel.

How the Program Would Work

The federal General Services Administration has begun developing the e-commerce purchasing program in conjunction with the White House Office of Management and Budget. GSA was directed to implement the system through a provision of the 2018 National Defense Authorization Act, or NDAA, which became law last month.

As originally proposed by Thornberry, the program was limited to the Defense Department, but the NDAA expanded it to cover all federal agencies — both military and civilian. Government-wide spending for commercially available products and services amounts to more than $50 billion per year, according to GSA estimates.

The law stipulates that federal e-commerce purchasing be phased in through several steps. While program development could extend into 2020, the first phase already is under way and must be completed this March.

In the first phase, GSA is required to create an implementation plan and a schedule for launching the online marketplace program. Within a year of implementing the first phase, GSA must prepare recommendations for any changes or exemptions to existing laws that would be necessary for making the online program operational. Lastly, OMB and GSA must create guidance for the program within a year of implementing phase two.

GSA has been making a major effort to obtain input from the private sector during the program development process. The agency conducted a town meeting forum earlier this month. During the NDAA enactment process, drafts of the e-commerce proposal changed significantly, partly as a result of comments from private sector parties who were asked for feedback by congressional staff.

For example, the Coalition on Public Procurement provided a background paper contending that the draft under consideration last fall embodied "the most consequential procurement policy change in a generation." The draft language would result "in only one or two providers" having "the capability and potential regulatory compliance" to be selected as an e-commerce portal, the coalition cautioned. "Thus, the proposal could result in monopoly or duopoly control over access to the federal market for commercial items."

Law Requires Competitive Platforms

The final version enacted into law addresses that issue. The law "makes clear that GSA must enter multiple contracts with multiple commercial e-commerce portal providers, thereby allaying fears that the bill could lead to a monopolistic online marketplace provider capturing a substantial portion of the government's needs," according to a commentary by Holland and Knight attorneys Robert Tompkins and Ronald Perry.

In addition, the law specifies that all existing laws, including federal procurement restrictions, apply to the online marketplace program.

"GSA therefore will have to enter contracts with commercial e-commerce portals through full and open competition," Tompkins and Perry observed.

At the GSA forum, attendees presented various ideas for constructing a federal e-commerce acquisition program.

"One model that was discussed would require a portal provider to contract with GSA to provide an online interface. Under this approach, suppliers would then sign up to use the portal, potentially via a contract with the portal provider. Next, government purchasers would select suppliers from the portal, entering prime contracts with suppliers directly," wrote Susan Cassidy, a partner at law firm Covington and Burling, in an online post.

Another approach would require online portal providers to sell directly to the government, providing a user interface for online purchases and the end items of supply, she noted.

"Consistent with the text of the statute," numerous attendees said that multiple online portals would "encourage competition among a larger pool of potential contractors and deliver better value to the government," Cassidy said.

"It is still very early in the process, and it was clear at the industry day that GSA has many questions to answer and decisions to make," said Eminence Griffin, director of federal procurement at the
Information Technology Industry Council.

"That being said, we continue to advocate for adequate competition for the marketplace contracts and a level playing field for government e-commerce sites as well as guidance on how this will impact supply chain and cybersecurity requirements," she told the E-Commerce Times.

Tricky E-Commerce Landscape

Despite the scope of commercial off the shelf products involved in the GSA program, it is not related to a different federal effort to utilize commercial off the shelf software, Griffin noted.

"For COTS software, that generally means shrink-wrapped software, which is not often a candidate for government software needs," she said.

"At the federal level, the focus is usually commercial software solutions for large institutions. We don't see substantial changes to the market for COTS software, and this statute has no impact on the acquisition of commercial software," Griffin explained.

"While part of the first two phases of implementation will involve determining what products — or types of products — are appropriate for the government to purchase through digital marketplaces, we believe the government will start with simple items that don't require configuration," said Steve Charles, founder of
immixGroup.

"This could exclude laptops, for example, because the government requires its own software install," he told the E-Commerce Times.

It appears that use of the e-commerce program for procurement faces numerous hurdles, when it comes to commercial off the shelf software.

"We view COTS as any software that is commonly sold in substantial quantities to the general public, such as individual consumers and commercial enterprises and companies," Charles said.

However, "the acquisition of software is quite unlike buying paper towels or paper clips. For instance, there are additional terms such as software license agreements, that must be reviewed and agreed upon," he pointed out.

"In the government's case, only a warranted contracting officer can bind the government. Whereas, when a consumer could simply click 'agree,' the government cannot," Charles said.

Other factors, such as integration services or the use of cloud associated software, also would have to be addressed when considering the use of online platforms for software procurement.

The situation can get even more complicated in the case of software resellers. The potential impact there "is getting cut out of the government's supply chain if just any third-party reseller is allowed to place products on e-commerce portals without authorization from the OEMs," Charles noted.

"A critical factor is that only resellers that have been authorized by and have a relationship with the OEM can stand behind a warranty and guarantee to deliver only genuine products," noted Jeff Ellinport, division counsel at immixGroup.

Furthermore, reseller arrangements can often involve multiple intermediaries.

"Only OEM authorized entities should be able to place an OEM's products for sale on a portal," Ellinport told the E-Commerce Times, "and the portal should then be required to validate that such entity is authorized to resell the OEM's products."


John K. Higgins has been an ECT News Network reporter since 2009. His main areas of focus are U.S. government technology issues such as IT contracting, cybersecurity, privacy, cloud technology, big data and e-commerce regulation. As a freelance journalist and career business writer, he has written for numerous publications, including
The Corps Report and Business Week.
Email John.

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E-Commerce Times

Don’t Discount the Business Power of Emotions

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What accounts for the amazing success of Apple and Starbucks? They both connect with users on an emotional level. This "secret" is evident to anyone who looks closely, and you can apply it to succeed with your own company and improve your own life.

Apple was a struggling computer maker until the 1990s, when Steve Jobs returned. Jobs connected with the user base in a new way. Customers loved him — he created an emotional connection with the company.

That emotional connection helped Apple grow rapidly, even with several missteps along the way. The iPod, iPhone, iPad and more have lulled users into a comfortable cocoon that has been pretty much bulletproof, so far.

Ties vs. Turtlenecks

Think of how Apple compares to Microsoft. Microsoft is more like IBM. Perhaps its employees don't wear suits, white shirts and ties, but that's no longer true at IBM either. Still, the analogy holds: Microsoft is a large and powerful company, but without emotion.

On the other hand, Apple has more of a hippie persona — you know, Apple employees are warm-hearted folks sporting jeans and flip flops, and wanting to save the world. Yes, Apple is run by smart business people, but the company's brand oozes emotion. Terms like "love" seem to apply to Apple, not Microsoft.

Starbucks is another example. Its customers get a warm and fuzzy feeling going to their favorite coffee shop. There are many other companies that fit the Apple and Starbucks model. Appealing to emotions is a winning model.

When companies succeed in getting their customers to fall in love with them, they win loyalty. Even when the company makes a mistake, its customers don't run to competitors. Instead, they give them the time and room they need to fix their problems. Loving a company lets customers forgive the occasional screw-up, and every company screws up from time to time.

Staying Power

Apple has survived problems in the last decade what would have sunk other companies. Remember antenna-gate several years ago? Now it is dealing with battery-gate. I predict Apple will get past this new problem as well, simply because its users love the company — and love is the key.

Apple and Starbucks each filled an emotional need that previously had not been addressed. I am not suggesting these companies don't make mistakes — they make plenty. However, their customers don't leave, due to the emotional connection.

If you can focus on making strong emotional connections in your company, as well as in your professional life and your personal life, you may find yourself on the same winning wave as Apple and Starbucks. It's worth some consideration.


Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent
analyst, consultant and speaker.
Email Jeff.

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E-Commerce Times

Salesforce’s Triangulation Strategy

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Partnerships may be playing the role usually reserved for merger and acquisition activity in the CRM world right now. Generally a company makes a purchase when it wants to capture the benefits of another business' R&D or established market base. However, at the moment it appears that the desirable targets are too big to swallow, and the result is more partnering between the big guys and the really big guys.

Salesforce has been pursuing this strategy for most of the last year with Amazon, Google and IBM. This says a lot about the state of the marketplace on several fronts.

Joining Forces

First, Salesforce and Amazon announced a partnership in which Amazon and its AWS infrastructure service would become Salesforce's strategic infrastructure
partner when Salesforce absolutely had to deploy a data center in a foreign land.

This makes perfect sense. As I have often said, it makes no business sense to build (in this case, a data center) when you can purchase the solution at a reasonable price on the open market.

As a competitive issue, Salesforce's choice of Amazon is a direct challenge to Oracle, because it offers a safe haven, which enables Salesforce to diversify its partner portfolio while keeping Oracle and Microsoft at arm's length. Given the rumors of Salesforce being acquired by a big tech firm over the last few years, this seems a good way to help preserve its independence.

Much the same can be said of the alliance with Google. This is primarily a play for more small and mid-sized business customers, and it's a good one. Salesforce and Google announced their partnership around G Suite, Google's free office apps.

A while ago, Salesforce and Microsoft created an integration with Outlook, effectively making Outlook another user interface for Salesforce. This parallels Microsoft's own integration with its CRM and Outlook. So this partly neutralizes Outlook as a differentiator in any CRM decision.

Google integration gives Salesforce access to all those G Suite users who need CRM, especially in the SMB space. It also gives Salesforce another way to compete against Microsoft CRM. Of course, the company didn't stop there. Salesforce also now has an integration with Google Hangouts, an effective counter to Skype, which now is owned by Microsoft.

Away from the SMB space in the enterprise market, Salesforce also forged a relationship with Google Analytics. Not that it needs more analytics, but the two partners have developed plausible processes that use Google Analytics to surface macro trends and Salesforce Einstein to go the last mile, a model that works with IBM too.

Salesforce and IBM got closer last week, with Salesforce naming IBM a preferred cloud services provider and IBM calling Salesforce its preferred customer engagement platform for sales and service. The agreement leverages IBM's Watson analytics and its cloud, as well as Salesforce Quip (more office software) and Service Cloud Einstein.

21st Century Information Utility

In all of this, we can see that Salesforce has been working to maintain its independence by linking with anything that can enhance its CRM and make it less desirable as an acquisition target. Of greater importance, it's these relationships and others like them that will help Salesforce reach its goal of US$20 billion in revenue in a few years.

When your revenue needs are this big, you need to leverage the market penetration of similar companies. While all of the companies named are bigger than Salesforce, each needs the bragging rights of working with the most popular CRM in the world.

Another question in all this is what's happening with M&A activity, which seems to lull while partnerships blossom. The merger market is notorious for running hot and cold, and right now it seems tepid, like there's more opportunity for large companies like Salesforce crafting relationships with bigger partners.

It's not clear if this means there are few attractive acquisitions out there, or simply that the times require different approaches to the market.

More than once in talks since Dreamforce last fall, Marc Benioff has used the logic that "my enemy's enemy is my friend." This logic is being played out in the partnerships his company has been spawning. On one level, it's just smart business — but in the back of my mind, I see the information utility of the 21st century forming.

It will resemble the current electric utility in that no single provider will dominate and a high degree of interoperability will be needed. Standards like 120 volt and 60 Hertz electricity are what give us the impression of a continental electric utility grid, but in reality the grid is made up of smaller vendors adhering to the standards.

Likewise, there's no single vendor capable of dominating the information utility market, and standards will be vital. That's why it's so important when a company like Salesforce inks partnerships. These incremental agreements have more significance than the announcements might allude to. They are steps on the road to something bigger.


Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at
denis.pombriant@beagleresearch.com.

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E-Commerce Times

New Service Aims to Ease B2B Tech Purchasing Process

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TechTarget last week launched Deal ScoreCard, a quarterly report designed to help B2B technology executives make better purchasing decisions.

Deal ScoreCard covers 20 technology product market segments across the storage, data center, cloud, and end-user computing enterprise technology markets.

It leverages proprietary buyer-generated data across four categories:

  • Pre- and post-purchase data;
  • Web interest data; and
  • Buyer narratives.

"This content is specifically designed to aid enterprise technology buyers in making real purchase decisions," said Bill Crowley, TechTarget's EVP of data business.

Pre-purchase data is gathered from interviews and surveys with IT buyers after they have confirmed a project in the technology area of the research, such as converged infrastructure, but before they purchase the technology, he told the E-Commerce Times.

Post-purchase data is gleaned from IT buyers after they have bought technology.

For Web interest, Deal ScoreCard shows subscribers the relative interest in categories of users' activity on TechTarget's website and their email activity, Crowley said. It also indicates how the interest trends over quarters, which topics and articles are the most popular during the quarter, and which white paper topics are most popular in email promotions.

Deal ScoreCard reports verbatim quotes from interviews with buyers on major research topic areas for buyer narratives.

Focus on Information

Among Deal ScoreCard's benefits:

  • It shows the ranked importance of different pain points, initiatives and features in buyers' minds before and after purchase, and the relative strengths of a company's products and those of competitors;
  • It lets sales leaders compare their companies to market leaders and the competition, understand what concessions competitors are offering in deal cycles, and get quarterly updates on the data directly relevant to decisions about training, as well as demo and pitch construction;
  • It helps content marketers improve positioning, message development and content by showing them the most important and fastest-growing topics, and by noting which topics their company is relatively strong or weak in; and
  • It gives competitive intelligence teams a more independent, detailed and regular view of market dynamics than available in customized reports by including pre-purchase shortlist insights, along with unbiased win/loss buyer data.

"We've seen a huge shift in both B2B selling behavior and in B2B buyer preferences, the former being driven by the latter," said Joe Andrews, VP of marketing at
InsideView.

Buyers used to "rely very heavily on the knowledge and charm of sellers," he told the E-Commerce Times, but "today [they're] much more informed when they enter the sales conversation and have higher expectations."

TechTarget monitors online behavior across 140 enterprise technology-specific websites it owns, and more than 10,000 topics, TechTarget's Crowley said.

"Since we own the content and can identify active users, we're able to easily monitor visitors' behavior and our over 18 million registered members, and catalog activity against specific topics," he noted. "This is processed and made available to drive our portfolio of data-driven products and reports."

Moving to Real-Time Data – or Not

Businesses increasingly seek real-time business data on which to base their decisions.

"It takes weeks to drive data into product and policy decisions," noted Rob Enderle, principal analyst at the Enderle Group.

"If you already start a quarter back, by the time you respond to a market change you'll likely be too late to truly benefit from it," he told the E-Commerce Times.

However, TechTarget doesn't publish in real time, "because we need time to do quality control on responses and bring the various types of data into a single report and create a cohesive package," Crowley noted. "We collect data right up to the time we compile the report."

Creating the data is the hard part, he pointed out, but network and processes that the company has put in place over almost 20 years allow it to produce and manage very high-quality data.


Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology.
Email Richard.

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E-Commerce Times

AT&T Raises Eyebrows With Call for Internet Bill of Rights

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In an open letter and a series of full-page ads in major newspapers, AT&T CEO Randall Stephenson on Wednesday urged Congress to enact an Internet Bill of Rights and to bring the Net neutrality debate to an end.

Although AT&T supported the Federal Communications Commission's December vote to repeal its Net neutrality rules, the company has called on legislators to establish new laws to regulate the Internet.

AT&T wants to make sure there is a transparent and open Internet for all consumers, Stephenson maintained.

"Legislation would not only ensure consumers' rights are protected, but it would provide consistent rules of the road for all Internet companies, across all websites, content devices and applications," Stephenson wrote in the open letter.

AT&T objected to regulation under Title II, but it supported the Net neutrality rules the FCC established in 2010, which did not rely on Title II regulations, noted company spokesperson Michael Balmoris.

"The purpose of today's open letter calling for an Internet Bill of Rights was to begin a dialogue on a comprehensive framework for basic consumer protections on the Internet that applies to all Internet companies," he noted.

Questionable Motives

Sen. Ed Markey, D-Mass., who supports a bipartisan resolution that has the backing of 49 Democrats and Republican Sen. Susan Collins of Maine, criticized AT&T's call to action in a tweet on Wednesday.

.@ATT wouldn't have to take out a full-page ad in the @washingtonpost to convince you that they support an open Internet if they did the one thing that permanently protects it: support my CRA resolution to restore #NetNeutrality. pic.twitter.com/dLsKsLKtvp

— Ed Markey (@SenMarkey) January 24, 2018

Open Internet advocacy groups also questioned how AT&T could reconcile its request for congressional action with past efforts to revoke Title II.

Fight for the Future characterized AT&T's move a "cynical attempt at misinformation" and said "zero real Net neutrality supporters are fooled" by the open letter.

"AT&T is full of it, and this latest push from them reeks of desperation," Evan Greer, campaign director at Fight for the Future, told the E-Commerce Times.

AT&T's push for congressional action falls short, according to Public Knowledge vice president Chris Lewis, because concerns go well beyond pure Net neutrality issues, and it could take years for Congress to upgrade federal communications law for the modern age.

"First things first," he told the E-Commerce Times. "Let's make sure consumers are protected with this basic Net neutrality protection."

Uphill Climb

AT&T is one of the few major broadband companies that will benefit from Net neutrality being overturned, according to Roger Kay, president of Endpoint Technologies Associates. Verizon and Comcast are also in that group.

It's very unlikely that Congress will be able to roll back the FCC's decision, he told the E-Commerce Times, because the commission carried out a policy favored by the Trump administration, and the current Congress has done very little to push back.

The AT&T campaign could be a reaction to the groundswell of opposition to the FCC repeal coming from consumers and Silicon Valley, argued independent analyst Jeff Kagan.

"While I believe AT&T is happy with the recent FCC decision on Net neutrality, they see the writing on the wall that the other side will simply not stop," he told the E-Commerce Times.

In the meantime, the U.S. General Accounting Office has agreed to investigate potential fraud in connection with the FCC's rules reversal. Net neutrality proponents have alleged that 2 million fake public comments were published in an effort to sway opinions during the process that led up to last month's FCC 3-2 vote.

The investigation should begin in about five months, according to GAO spokesperson Chuck Young.

"Once it gets under way, one of the first steps will be to determine the exact scope of what we will cover and the methodology to be used," he told the E-Commerce Times.

New York Attorney General Eric Schneiderman, who is leading a coalition of 22 states that are suing to restore Net neutrality, praised the GAO decision to investigate. His office has been investigating the fake comments since last spring, as submitting comments using stolen identities of real people constitutes a crime under New York state law.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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