Based out of Vancouver, BC, Canada (I didn’t know they were Canadian!), Elastic Path customers are in the $100 million to $1 billion range and span industries including retail, travel and hospitality, telco and automotive.
CEO Harry Chemko gave me a little history on the eighteen-year-old company. Fresh out of university, Elastic Path’s founders (including Chemko) began a custom development shop building business applications and websites on open source technology. When e-commerce kicked in around 2005, their customers start asking them to build out commerce solutions which they did, eventually creating a commerce product.
BEA Systems came to them in 2007, asking to resell Elastic Path within their solution set and that pulled them in the enterprise space. That relationship ended a year later when Oracle bought BEA, but Chemko said it was the best thing for them. They gained a dozen enterprise customers during that time with BEA and had established some strong relationships, including launching an online store for Symantec.
By 2011, Elastic Path had grown significantly, but they saw changes in the way things were done. A new CTO shared a vision that the suites would go away and there would be demand for commerce solutions you could embed into digital experiences. So they shifted their focus, choosing to develop an API-first architecture and stop developing their front-end. This was in 2012 - seven years too early.
The market for headless is here
We talk about headless solutions today as a mandatory architecture model that allows an organization to create the best experience using all the right tools. Suites may be gone, and platforms have taken their place; however, any software provider that doesn’t provide an API that can be integrated with other solutions will not survive.
So Elastic Path was a little early to gate. Maybe that was a good thing. It seems to have set them on a path that different from what many of the other commerce providers are doing, like getting acquired by other solutions (SAP and Hybris, Adobe and Magento, Salesforce and Demandware).
Elastic Path works with web content management providers and system integrators looking for an API-oriented commerce solution. Chemko said that it had been the last couple of years they’ve seen the most growth, particularly from an Internet of Things (IoT) perspective.
They worked with Carnival Corporation to support the development of wearable medallions for people on their Princess brand cruise ships. Chemko said a ship has seven thousand sensors and four thousand screens through a ship; it’s essentially a personalized concierge without the actual concierge person:
Medallion replaces everything analog about the cruise experience, eliminating the need for cruise cards, credit cards, and room keys — transforming the way guests interact with other passengers and crew. Guests can browse and book digital concierge services or order food and drink through 55-inch digital screens in every room and every floor of the ship, with crew members able to locate guests precisely, even as they wander.
Another example he provided was an industrial equipment manufacturer serving partners by automating the scheduling of service and ordering parts. Chemko said that agility and IoT are the future. And not just in the B2C space; 30% of their customers are B2B companies.
They’re doing something right. Elastic Path recently closed $43M series B funding led by Sageview Capital. The plan is to expand their partnerships and implement a direct sales force to support the US and Europe, as well as put more money into marketing to build awareness. Chemko said they also want to build out their B2B offering.
Embedding commerce everywhere
We have been slowly shifting away from the idea that e-commerce solutions are just for the B2C shopping site. The ability to integrate with digital experience platforms like Adobe (which they have a close partnership with), as well as their hypermedia API, are listed by Gartner as strengths, while its lack of front-end UI is listed as a weakness (even though that makes it perfect to work with DXPs).
This idea of embedding commerce everywhere is smart. If you think about the different things you do online that leverage a commerce engine, it’s not just shopping for new shoes. It’s a wearable at Disney World where you don’t have to pay for anything; it’s all tracked through your bracelet (this is not Elastic Path by the way), it’s spending a week on a cruise ship and having your stay personalized based on what you do while you’re there. It’s connected cars and kitchen fridges, getting things fixed before they actually break.
I don’t think we’ll see Elastic Path's partnership with Adobe end anytime soon. Magento is a very difference commerce solution from Elastic Path, and to support Adobe’s enterprise customers building these “commerce-everywhere” style solutions will require Elastic Path, not Magento (at least not yet).
Does it matter that Elastic Path doesn’t support a mid-sized market that wants a full-service e-commerce solution? I don’t think so. The money is in the IoT and the headless market. It’s not the future of commerce; it’s the now of commerce.