ENGINEERING

Demandware Inc officially announced its Series A funding and business strategy at the Shop.org 2004 Annual Summit, the premier event for the Internet retailing industry. The new company, backed by North Bridge Venture Partners and General Catalyst Partners, will offer a new approach for retailers and manufacturers who are purchasing and implementing e-commerce technology. Led by e-commerce visionary Stephan Schambach, the Demandware founding team combines perspective and experience acquired at pioneering e-commerce companies such as ATG, Allaire, Macromedia, Intershop and NaviSite. The Internet is a critical sales channel for nearly every major retailer and manufacturer. Forrester Research predicts that online retail alone will grow to $144 billion in 2004 -- a 27 percent increase over 2003. However, while e-commerce has become a strategic revenue driver, the underlying model for delivering e-commerce solutions has not adapted to today's business requirements. The challenge for e-commerce infrastructure is two-fold. As a direct expression of a company's brand, e-commerce systems must be adaptable to each company's unique requirements. At the same time, these systems need the capacity to handle very large volumes during peak selling periods, which may only last for a few months of the year, forcing companies to make large upfront investments in underutilized hardware, software and operating personnel. Under Schambach's leadership, Demandware has established a new approach to e-commerce infrastructure that addresses the challenge by combining the flexibility of a highly customizable application with the cost benefits and scalability of software delivered as an on demand service. As a result, companies can create unique e-commerce solutions with operating costs that are aligned with their month-to-month business results. "After more than 10 years of evolution, online retailing has become very complex and e-commerce systems need to offer a broad range of functionality that is far too expensive for most companies to build, maintain and operate from scratch," said Stephan Schambach, president and CEO of Demandware. "The Demandware solution is fundamentally a new way to tackle the e-commerce infrastructure problem: give customers all the flexibility and functionality of an enterprise e-commerce application delivered and priced as an on demand service. By operating as an on demand service, like Salesforce.com, we can provide flexible capacity that is priced based on usage and scales to meet our customers' varying needs." Unlike existing turnkey hosted e-commerce options, implementing e-commerce solutions with Demandware involves customizing the solution for each customer's unique business needs using both pre-built and custom-built components, so Demandware is actively partnering with the leading e-commerce system integrators. "E-Commerce is a field with constant innovation, which means regular system upgrades and customer-driven changes to keep pace with the market," commented Ralph Folz, CEO of Molecular, a technology consulting firm in New England and Demandware partner. "Demandware's on demand model eliminates the headaches and hassles typically associated with such upgrades, and it gives us the ability as a system integrator to create custom solutions that evolve and adapt to our client's changing requirements. Our customers will highly value the built-in scalability, performance, availability and security." The Demandware e-commerce platform leverages state-of-the-art e-commerce software, Web services and a highly scalable Grid computing architecture to provide functionality, flexibility and scalability through an on demand service. Demandware is actively bringing select customers onto the platform prior to general availability, which is planned for the first quarter of 2005.