In the words of the Greek philosopher Heraclitus, everything flows and nothing stands still. This is certainly true of Ascentium, the Seattle based interactive agency that last year acquired Cactus Commerce and Microsoft’s Commerce Server. This week, the company firmed up its strategy following last year’s acquisition spree. The result: the company is splitting in two, creating two separate entities focusing on services and product respectively. 

They are:

  • SmithSmith is the result of merging together Ascentium and Cactus Commerce. The old brands are now gone for good, and the new brand with a headcount of over 300 staff aims to offer both digital agency and commerce technology services to its brand partners.
  • Commerce– After the takeover of Microsoft’s Commerce Server product last November, Ascentium quickly re-branded the product as Ascentium Commerce Server 2009. Yesterday, Smith (previously Ascentium) announced that the product division of the company (a combination of the product IP from Microsoft and the product development resources from Cactus) has been re-branded as a wholly owned, but independently managed subsidiary called Commerce

What does it means for Catcus / Ascentium customers?

In creating Smith, the company has completed its integration of digital agency (Ascentium) and commerce focused systems integrator (Cactus Commerce). The new firm now headquartered in downtown Seattle and can be classified as what Forrester calls a Commerce Service Provider. With Smith, the firm brings to market an integrated suite of service offerings including strategy consulting, full-service marketing, brand design, creative design, customer experience design, technology implementation, support and managed services under a single umbrella. For clients, these combined capabilities mean they can work with a single vendor for both developing and implementing digital marketing strategies. The new company will continue to support clients with implementations of the sister company’s Commerce product, but will also broaden its services capability to other commerce platforms while continuing to build out its portfolio of traditional agency work.

What does it means for Microsoft Commerce Server clients?

  • New name, same team, different philosophy. The new brand seeks to build upon the equity of the commerce server name and the underlying .Net architecture. The development team is the same group of engineers that have been developing Commerce Server since Microsoft outsourced development to Cactus in 2007. The real change is in the development philosophy. Under the new brand name the team aims to shift the product from being a technology focused product to a business focused product. Commerce Server has always required heavy intervention from corporate IT to implement, maintain and operate. In tomorrow’s world, the firm aims to make the product friendly for marketers and merchandizers to use without needing an army of developers by their side. This is not revolutionary by any means – most of Commerce Server’s competitors went down this path years ago, but for existing Commerce Server customers the change in philosophy will be welcomed with open arms.
  • The release tap is back on. With the new brand also comes the first significant release in years (Ascentium Commerce Server 2009 was little more than a re-branding exercise). As of today, partners and clients can download the preview edition of the forthcoming release – Commerce Server 10. Although the release won’t GA until the New Year, it marks the start of a long and ambitious roadmap for the newly branded product division as it embarks on a journey to play catch-up in a market that has long since moved on. CS 10 may not be revolutionary, but it represents a movement from a product that has been on its knees.   
  • Customers have a roadmap they can believe in. With the worst of the disruption in the rear view mirror, the newly formed division has communicated an aggressive multi-year roadmap to clients and partners. The roadmap focuses on business goals rather than technology needs and calls for a complete re-build of the business user tools into a modern HTML5-friendly browser interface. Only time will tell if the roadmap comes of age, but hope now exists for existing customers and faithful partners that have had little confidence in the direction of the product over the past 3-4 years. The biggest challenge the company faces is execution – the product has lost a lot of ground in the enterprise B2B commerce game and it will take a herculean effort to catch up again.
  • Commerce Server is finally free of Redmond’s politics. Under Microsoft rule, Commerce Server had been in an arranged marriage to other corporate products, namely SharePoint, BizTalk and SQL Server. This strategy meant that clients and partners with simple commerce project requirements were forced to embrace SharePoint and the rest of the MS family. With the new release, Commerce Server is finally divorcing the dependency on SharePoint (although improved support for SharePoint 2010 has been added for those that want it). The team has developed a new independent MVC framework that will allow clients to use CS 10 standalone or with any .Net based web content management platform (think Sitecore). Furthermore, the team has taken the product to the cleaners, stripping out proprietary or obsolete components like Silverlight. Beyond the V10 release, we expect to see further divergence from the Redmond regiment through the development of web-based business user tools that work on non-MS browsers (gasp) and pursuit of  best-of-breed 3rd party technology partners (think WCM, Web Analytics, Search, Payments, etc).
  • The partner eco-system is re-engaging. As of today, the company has 12 or so partners signed up – with others in the works – to support implementations of Commerce Server 10. However, the company has ambitious plans to expand its partner network to 45 or 50 certified partners by the end of 2013. These partners will ultimately compete with Smith for creative, technical architecture, implementation and support services, a challenge that the product division must face without prejudice. Building a thriving external partner network while keeping the hungry mouths at a growing Smith fed will be challenging.

If you are a Forrester client and have questions about either Smith or Commerce, I encourage you to set up an inquiry with us.