Monday, March 16, 2009

Cloud Computing Strategy Crucial For eBay To Become One-stop E-commerce Shop

"We were the biggest and the best. And when you're the biggest and the best, there's a strong tendency to try to preserve that.....EBay has a storied past. But frankly, it's a past we've held onto too much." This is what the CEO of eBay, John Donahoe, told the analysts while explaining eBay's three-year revival plan to achieve low single digit growth. The outlined plan calls for continued investment into Skype, PayPal, and secondary-channels with an end goal to move eBay beyond an auction place to make it a one-stop e-commerce shop. Lack of explicit diversification plans to capture the fast growing e-commerce market (15% to 20% in the next five years) makes me wonder if eBay correctly assesses its core and context at this juncture and has the right infrastructure to support its strategy.

eBay's application-led multi-generation platform strategy has supported its core business strategy really well but eBay is significantly under-invested in the cloud computing to meet the new challenges. Unified e-commerce experience requires connecting heterogeneous and radically disparate data sources, applications, and their capabilities to monetize the traffic across them. Even if eBay does not tightly integrate Skype with PayPal and auction it should have the infrastructure to mine the information from Skype to support its strategy to gain major share of the e-commerce market especially to go after the digital goods such as e-books, songs, videos, ring tones etc. It would be a step backwards to limit the strategy view to the physical goods and a narrow transactional platform and not look at the holistic total customer experience that is SaaS delivered with the help of dynamic and elastic cloud-based platform.

MySpace is ahead in the game to monetize the immense clickstream data with the help of the cloud computing. eBay has huge untapped value in the social interaction and e-commerce data that it collects from all its assets. A right analytic cloud platform could make eBay rich from this gold mine. Social media cloud computing strategy is crucial for eBay not only to make competition irrelevant by going after emerging secondary markets but also to better prepare eBay for the megatrends such as millennial and sustainability. If eBay does successfully execute this strategy, tomorrow's eBay may not look like what you and I have seen so far.

1 comment:

Mike said...

Bay has been playing with all the concepts mentioned. They also have a rich analytics capability. They have and continue to try to monetize digital assets. All of these efforts desperately focused on maintaining their cash cow. When your stock goes this low risk becomes a very relative term. Can they pull an Apple?