Dan Wagner is founder and chairman of Venda, a full service e-commerce platform, which has several big name clients in the US and UK, and recently won the contract to provide Tesco's next e-commerce site.
How is Venda doing at the moment?
We have been maintaining our market position for nine years now, and Venda is the market leader in software as a service e-commerce solutions, we are a company with great momentum at the moment, and are still growing very fast.
We recently won the contract for the next version of Tesco's website , which illustrates the success of Venda. It has reached an inflection point on its growth.
How long did that process of winning the Tesco contract take?
Tesco took over a year evaluating the Venda platform before making the decision, so it was a rigorous process. Tesco has its own in-house capabilities so it always had the option to develop its own e-commerce platform instead of outsourcing.
Venda is PCI level one compliant, which nobody else is, and has the experience of having been in the market for a long time. Scalability is not a problem with Venda, while we have the capabilities to deal with the levels of traffic and transactions that Tesco will require.
A number of retailers, including Next and Debenhams, have experienced capacity issues when offering sales, how do you handle this problem?
You sometimes do need a queueing system, and it is something we have used in the past. For instance, when selling Robbie Williams tickets on one of our sites a few years ago, we were receiving hundreds of thousands of orders in one day, and had to introduce queues.
You have to think about it in terms of offline sales, and sometimes it is necessary to use similar policies online as you would in a store. When we used this for the Robbie Williams tickets, we showed videos for customers to watch while they waited to place an order.
It's rare that any retailer reaches the peak of our platform's capacity, any one retailer could have a very popular sale and we would be able to handle the extra demand.
We normally operate at around 10% of our systems' capabilities, and even at peak periods like Christmas, it doesn't go beyond 50%. If it gets near to this, we simply add more machines to cope with extra demand.
How big is the Venda organisation at the moment?
Globally, we have about 300 people in our operation. There are 140 staff in our Bangkok production facility, and we have two large operations in Central London, as well as offices in NY and Ukraine.
In addition, we have data centres in the US and UK, with hundreds and thousands of machines everyone shares the same platform and code.
What are the areas of growth for Venda?
We are continuing to grow very quickly in a number of areas. We expect our new small business offering, which we are launching soon in partnership with eBay and PayPal to form part of this growth.
We are introducing a £50 a month product for Small businesses, which provides them with a nice user interface, and this will initially be offered to eBay power sellers..
We are winning business globally though, from retailers such as TK Maxx and Tesco in the UK, while we have many well known clients in the US, including Conde Nast and Encyclopedia Britannica.
How would you define 'software as a service'?
People use it as a catch all term in a market that is increasingly moving towards outsourcing. It is only truly delivered as a single instance multi-tenanted architecture. It is one piece of code shared by many, residing on one computer.
For example, a customer making a purchase from the British Museum website will be having the order processed on the same machine as someone else who is buying an Arsenal shirt from the club's website.
It allows multiple customers or users to access a shared piece of data, and has the advantage of providing scalability for clients.
You have a number of clients using the Venda platform in the UK, yet some sites are arguably following best practice e-commerce more than others. For example, Heal's seems to be a more usable site than Laura Ashley, and both use Venda. How much input do you have on this?
We direct clients as well as we can, but ultimately the final design and look of an e-commerce site is up to them. Some clients will use third party designers for all or part of the website, while others use Venda's in-house design team for everything.
For instance, Heals used our in-house team for the whole design of their website, while Laura Ashley used its own team for the design of its website.
During the build process, we offer advice, but the customers makes the decisions and we have to go with whatever the clients tell us.
How much do you charge?
Ours is a flat-rate model, and clients pay £6,000 per month, and 15p per transaction processed on top of this. It's the same for every customer, whether this happens to be Tesco or a much smaller retailer, and high value customers with more sales will pay considerably more.
It's a rate that works, because as the volume of business grows, the average cost per order goes down, not up.
What happened with Shiny Media and its administration?
It contested it as it was a pre-packed administration by some of the directors and the company could have continued trading at the time.
The end result was a settlement that allowed me to get the fashion sites from Shiny Media.
What are your plans for Aigua Media?
We have used these sites to form a network of fashion and lifestyle blogs, which sits nicely alongside Osoyou.com. We'll also be launching the BeautyQuest shortly, which is a version of Osoyou for beauty products.
It's an interesting group of entities targeting women, who are so poorly served on the internet at the moment.