UPDATED 20:28 EDT / APRIL 02 2019

CLOUD

Report: Microsoft considers taking on Shopify in the e-commerce market

Microsoft Corp. is reportedly looking to take on Shopify Inc. in the e-commerce online store-building market in response to demand from some of its larger customers.

Shopify sells a platform for building e-commerce stores for enterprises and smaller businesses that want to sell their products online.

Its platform comes with a range of hosting options that include networking, storage and compute, plus domain creation services, integrated payments and everything else that goes into running such a store. The company also sells content management and marketing services, starting at $29 per month for its most basic plan.

As of 2018, Shopify was doing some pretty good business, with more than $1 billion in revenue and in excess of 800,000 merchant customers on its books.

Shopify sells other services through its partners as well, including tools for accounting and tax compliance, inventory management, logistics and order fulfillment. Microsoft sells similar tools through its Dynamics product.

The Information reported today that Microsoft is now “seriously considering” building a rival platform to Shopify. The report cites an interview with Shelley Bransten, Microsoft’s corporate vice president of global retail and consumer goods, who confirmed that the company is indeed mulling over the possibility of jumping into the market.

Microsoft doesn’t have much experience in building online stores for customers, but it does have its own web-based shops, in addition to about 100 physical stores. It also provides services to major retailers such as Walmart Inc.

Bransten does, however, have plenty of retail experience herself, having spent 15 years working at Gap Inc. and then Salesforce.com Inc. before joining Microsoft.

If Microsoft does get into e-commerce it would represent a turnaround for the company, as it was once a competitor in the space before spinning out its offerings as an independent company called Sitecore, said Ray Wang, principal analyst and founder of Constellation Research Inc. He added that the move seems likely, as there has been “a lot of talk” about this, as well as some proof points with Azure that it’s closer to creating an e-commerce product. There’s also a desire to combat the threat from Amazon.com Inc., which for years has aggressively been pushig to make the retail space its own.

“Almost every retailer at this point is an Anti-Amazon AWS customer, and most have even forbid their suppliers to be on AWS,” Wang said. “But we expect Microsoft and maybe even Google to get in this space because of the workloads. A simple roll up of CommerceTools or Segment.io could give someone a head start if they wanted to be in this space.”

Microsoft declined to comment on The Information’s report, but it has recently posted several job listings for its Cayman team within its Azure Commerce + Ecosystems business that could indicate its plans. Microsoft’s Cayman team is apparently tasked with “building a core platform to enable product, pricing and offer management across the breadth of Microsoft’s 1st and 3rd party products and services,” according to one listing.

Interestingly, the report comes on the same day Microsoft announced it’s removing the “books” category from its own online store, effective immediately. It said previously purchased books and rentals will still be accessible until early July. After that date, access will be cut off. Customers have been promised full refunds for all content purchased from the Books category.

Microsoft previously stopped selling music from its online store, though it continues to sell other content such as games and movies.

Photo: efes/Pixabay

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