In 2011 we started the development of a new kind of technology platform for eCommerce. What today is called "Head-less" or "API-first" we kicked off late 2010. To explain our ideas behind it to all our stakeholders at that time - our employees, our investors and our partners - I created that vision paper and released it in April 2011. Not everything that we envisioned at that time came exactly that way, but the core of the concept and its assumptions became reality. A reality that in 2019 was proven with a 145M USD investment round led by Insight Partners for our company that empowers the commerce offerings of companies like AT&T, Express, Lego and VW today. Though this was already quite a journey we still feel that we are at the beginning. So if you are also up to something with your business or you have a great vision for technology and markets - go for it. This document should encourage you to go the extra mile. This is why I released it here. Have fun reading it (and please excuse my language, it was never supposed to be released to the broader public and share with you the un-edited version). For those who know us: GRID was our initial product we released 2007 based on an existing monolithic JEE platform. We decided 2010 to replace it with a new technology built-from-scratch that we called internally GRID 2.0 - which later became public as SPHERE.IO. Today it's simply the commercetools platform.

1. Vision Paper
GRID 2.0
!
The following describes a new product innovation from
commercetools for an open e-commerce platform in the cloud,
which will allow anyone using a web services API to
create both simple and sophisticated e-
commerce solutions and to sell them in a built-in app-
store. This vision paper is a short introduction to give you
a better feel for the breadth of functions, the market and
the competition. This will also lay the foundation
for the future of commercetools e-commerce products and
thereby redefining the company strategy for the future.
Author: ! Dirk Hoerig
Version: ! 1.0
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Seite 1

2. This document contains confidential and/or privileged
information. If you are not the intended recipient (or have
received this document in error) please notify the sender
immediately and destroy this document. Any unauthorized
copying, disclosure or distribution of the material is
strictly forbidden.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Seite 2

3. Terms and Abbreviations
To better understand this document, it is important to be
familiar with several abbreviations and have a common
understanding of terms and definitions.
SaaS - Software-as-a-Service:
With SaaS, a finished software product is provided as a
hosted service. SaaS products have multi-client
functionality, run on an infrastructure and are upgradeable.
Payment for SaaS products typically occurs on demand.
PaaS - Platform-as-a-Service:
With PaaS, the finished product is not provided as a hosted
service, but rather the platform on which the products can
be sold. Well known platforms are Force.com and the Google
App Engine.
Iaas - Infrastructure-as-a-Service:
IaaS means that a flexible infrastructure is provided as a
service. It is not about mere hosting, but a flexible
complex hardware and hosting structure is provided that can
be used and paid for on demand. IaaS is the basis required
to offer PaaS and SaaS.
Cloud:
A lot of marketing is currently taking place using the term
"cloud". We use the term cloud to describe a flexibly
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Seite 3

4. scalable hardware and software cluster that scales in real
time and provides the required resources.
API / Web service API:
API stands for Application Programming Interface and forms
the link between the product and the developer, who can
thereby access the functions. Web service API means that the
software does not need to be downloaded, but rather all
functions are provided over the Internet.
App store:
An app store is an catalog of applications. Marketing and
sales are realized there. In this vision paper, the app
store is a web catalog for shop solutions, modules and
functions that are based on the commercetools platform. They
can be purchased directly from the App store and be started
up.
GRID:
GRID is the current SaaS e-commerce solution from
commercetools, used by customers such as Red Bull and BRITA.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 4

5. Introduction
This vision paper describes the concept for the expansion of
the commercetools e-commerce solution to an open platform.
But why this idea, is Grid 1.0 good enough?
Sure! commercetools will be able to expand its client base
from 20 to around 100 in the coming years. If one considers
the average annual sales revenue of € 40k that is realized
per customer, it is a solid business model with good
prospects. We still have the feeling that there is more to
go. The e-commerce market is the largest Internet market in
overall. In Europe alone, more than 5 billion euros are
spent on e-commerce software, its configuration and
operation. How can it be possible that the largest e-
commerce software providers (Intershop, IBM, hybris) added
together do not have total annual revenues of 200 million
euros? The answer is simple: No one has been able to
dominate the market and serve a significant part of the
value chain. To do so, it would be not only necessary to
offer an extensive product, but also to provide for easy
adaptability and use while addressing hosting, scalability
and security. The billion dollar market belongs to thousands
of agencies and service providers. To secure a significant
part of the pie, the needs of operators of online shops need
to be fulfilled as well as the needs of partners.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 5

6. Two reasons were key in our decision to pursue this
strategy: On the one hand we simplify our own growth by
giving external developers and designers access to our
tools. This way more new applications and pages will be
created than we could realize ourselves. On the other hand,
we have made it our priority to change the e-commerce market
and become the market leader in cloud e-commerce services.
In this respect, we see this product as a dedicated further
development of our present e-commerce software.
We have many customers who would already benefit from an
open platform today. Our agencies and partners are waiting
in the starting blocks to integrate solutions and ideas and
to sell in this market through us. The starting point is
thus ideal for the transformation from SaaS e-commerce to
PaaS-e-commerce.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 6

7. Business model
The e-commerce solutions market is multi-layered and
complex. Overall it is made up of the following layers:
- Hosting providers
- Software providers
- Web design agencies
- Implementation service providers
Additional providers of marketing, logistics etc. are not
mentioned to simply matters, since this document focuses on
the online shop technology product. In each of the areas
mentioned, there are various providers with different focal
points and target groups.
Let us first look at the market from the user's point of
view. e-commerce software users are on the one hand online
sellers, on the other hand they are technology service
providers who make modifications or enhancements.(such as
design agencies). The seller needs a flexible, adaptable
solution with a lot of standard functionality that can be
integrated with existing ERP products and scalable at the
best. If one breaks these needs down on a technical level,
the following is required:
• Ready-made e-commerce processes/modules for easy
configuration
• Possibility of expansion with own code and individual
layouts
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 7

8. • Interfaces and/or access to object such as products,
prices, customer data
• Scalable infrastructure, ideally in conjunction with a
hosting package
The needs of service providers supplement this list with the
following items:
• Access to source code in order to make modifications
• Possibility, implement own design concepts
• Expandability with own functions
• Fast learning curve for the product with existing
knowledge
• Low implementation and operation risk
No providers currently meet these demands. Software-as-a-
Service products such as commercetools, Demandware, Venda or
Shopify have brought advantages to the market compared to
classical licensed products by joining customizable software
with cloud hosting and have thus made e-commerce more
flexible and more cost-effective. However, even Software-as-
a-Service cannot cover all needs. The open source option
does not offer a satisfactory alternative: For instance
Magento is a good product but leaves the most important
questions unanswered:
"How can developers and designers create their own e-
commerce products without having to study the technology for
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 8

9. very long? How can these be automatically scaled when the
online shop gets more and more visitors? How can it be
ensured that the developers' projects are successful and
profitable?"
These questions are vital, because they can determine the
success of shop software. The partnerability of a product
offers the largest potential for growth. A few examples:
• iPhone and iTunes: If developers had not been able to
create and distribute their own apps via iTunes, its
success would have been much smaller.
• Salesforce.com: Through Force.com (Database.com etc.)
developers can create their own CRM applications thanks
to Salesforce technologies and infrastructure. Force.com
& Co. are already more important for the company's
success than its own products.
• Amazon.com: The launch of the shop platform and the
infrastructure services provided for more sales in 2010
than the sales of its own shop products.
• Google: Developers can use, integrate and adapt Google
products, which allows for a worldwide distribution (for
instance: Google Maps).
• Facebook: Companies such as Zynga (FarmVille) would not
be conceivable without the expandability of Facebook.
Developers can integrate their own applications on
Facebook and thus realize new business models.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 9

10. These are only some of the examples of successful platforms
that give external users the opportunity to create and
operate their own applications through open interfaces. The
more developers who can work on a platform, the greater the
probability of growth is.
Software-as-a-Service, such as what commercetools has
offered until now is ideal for a seller (because they are
hosted, scalable and functional), but can barely be expanded
or is difficult to expand by external partners. Open source
software on the other hand is appealing to developers (since
its open access), but still needs to be hosted and requires
a profound understanding of the solution (keyword:
familiarization!). In addition, both approaches determine
which tools and languages developers have to work with thus
limiting the developers possibilities. However, whoever
wants to dominate the market in the long-term has to provide
the solution.
Therefore, commercetools plans to build a hosted cloud
infrastructure that offers e-commerce functionality in the
form of ready-made modules. Developers, agencies, product
providers and designers will have open access to all
functions to create their e-commerce solutions. This
approach makes it possible to realize individual online
shops within a short time. Ready-made templates, tutorials
and documentation aid in their implementation. Thanks to a
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 10

11. cloud infrastructure, topics such as hosting, data security,
scalability and performance are not an issue, but are
automatically provided by commercetools. In an app store is
on this platform, finished products are offered, marketed
and sold. For the first time, agencies can resell their
existing project work as products and increase their sales.
commercetools earns twice at the same time: To begin with a
fee is charged for use of the platform depending on monthly
traffic and data volume. Operators of shops thus pay for
their hosting and usage on demand. In addition,
commercetools requires a share of the sales from the app
store and thus earns through the success of partner
solutions (cf. iTunes). Professional services as they are
currently offered by commercetools will continue to exist
and will provide individual shop solutions for customer
projects, though in the future they will be based on the new
GRID 2.0 platform.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 11

12. About the product
The new GRID 2.0 consists of two main products:
• PaaS e-commerce cloud
• App store
The e-commerce cloud can be compared to an operating system
used to build shops and e-commerce solutions. Whether its
iPhone shops, Facebook shops or even classical web shops
everything is possible, whereby elaborate matters as well as
the infrastructure are provided by commercetools. The USPs
are clear and unique:
• From operators of small shops to complex shop concepts
everything can be realized by flexibly adding new
services.
• Open approach that allows anyone to easily realize
scalable e-commerce solutions via API
• Unlimited scalability, whether 100 or 100,000 shop
visitors are active at the same time
On one hand the app store serves as a catalog of
applications, on the other hand it facilitates easy
implementation of the available solutions. It supplements
what is offered with the following USPs:
• Agencies, service providers and product providers can
market and sell their service
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 12

13. • Operators of shops can easily implement these services
without having to deal with hosting, scalability and
security
• Users have a central hub online where they can get an
overview of what is offered
• Existing shops can easily be expanded with functions and
modules via the app store, no matter whether they are
built on commercetools GRID or other software
In a technological sense the vision of the e-commerce cloud
consists of the following components:
• A cloud infrastructure with almost unlimited scalability
in data management and performance at 100% availability
• A multi-client database system and model which can store
thousands of customers parallel to huge amounts of data
from the shop
• An expandable data model, which can be expanded with new
functions in real time
• CRUD services (Create/Read/Update/Write) via API access
• Monitoring of use and services
• Admin panel for the technical administration of the
entire system (including functions to create, analyze,
bill and edit clients)
• Admin panel for shop managers, that can be flexibly
expanded with new functions
• App store as a catalog of applications that can be sorted
according to categories and other criteria Clients can
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 13

14. purchase these apps directly in the store; commercetools
takes care of processing and billing
• Developer network: Website with Wiki, tutorials,
documentation and more for the partner network
• Analysis tools to collect and analyze the use of service
by each client
This list provides a first impression of the technologies
and components required, however it is far from complete. An
extensive description of the technical packages, risks and
development processes can be found in the application
document for securing investment, which will finance a large
part of the product development.
In many technical areas, commercetools already has several
years of experience, as GRID 1.0 is among the leading SaaS
e-commerce solutions on the market.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 14

15. Monetization
For the monetization of the business model, commercetools
relies on established concepts. There are three primary
sources of revenue:
User fee for the platform: Five packages (S-XXL) are offered
differentiated according to user/month and memory
requirements. Starting at €50/month up to €1,000/month,
they can be used pre-configured and additional costs apply
for the use of further services. In the intermediate term,
we expect several thousand paying customers. Payment is made
by credit card.
App store commission: When a partner solution is sold,
commercetools receives approx. 20% for providing the app
store, the infrastructure and financial processing (cf.
Apple app store).
Apps: Our own commercetools apps will also be available in
the app store. Some of them, for instance the iPhone shop,
already exist today.
Besides these main products, further sources of sales
revenue exist/ will exist: The professional service area
will remain and be expanded, just as the e-commerce
marketing services for shop operators. For an additional
charge, e-commerce training seminars on the creation of
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 15

16. high-quality shop solutions will be offered to developers,
designers and consulting companies.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 16

17. Competition
Currently, there is no e-commerce-specific platform in the
PaaS sector. The few providers such as Salesforce.com,
Google or Amazon.com focus on core areas, which gives
commercetools an advantage technologically and a competitive
edge.
To sum up, the market finds itself in an early stage of
development and a wide range of application scenarios. Only
a few providers have been able to cover the whole range with
their services up until now.
The innovators are from the US such as Salesforce with their
platform Force.com and offer some of their services in
Germany. The adaptation to German market conditions is only
achieved to a certain extent. The competitive edge that
German providers have here equals an advantage for users,
since product information and legal terms are written in
German and the data processing centers are typically in
Germany. Furthermore, Salesforce.com is focused on CRM, so
e-commerce applications cannot be realized. With the plan
laid out here, commercetools will be able to continue to
expand its competitive edge in the area of e-commerce
solutions.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 17

18. Differentiation
In order to understand completely new ideas, one has to make
comparisons with existing applications. A possible
comparison for Grid 2.0 would be a combination of cloud
hosting combined with open source e-commerce functions in an
easy to understand development environment. The app store on
top serves for the sale and purchase of finished products
from the development environment. GRID 2.0 is not to be
compared with conventional marketplaces, all sorts of which
are on the market. They serve as a means to sell add-ons for
a closed product that needs to be installed and hosted. At
the heart of the innovation lies the combination of cloud
services, software and the open access development
environment for the partner eco-system.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 18

19. Opportunities and risks
The risks are in the technological concept. With Rackpace, a
worldwide leading provider for the operation of cloud
infrastructures was gained, however there are a number of
issues that present a risk in terms of both time and costs.
The needs for scalability and speed in the platform cannot
be neglected and are of top priority. When the basic
architecture is successfully realized, another technical
risk is reduced. The realization of components such as the
backend, app store and the developer network is tedious
work, but commercetools has tackled this in the past.
Compared to the risks, there are many more opportunities. If
one considers how an open source software like Magento has
spread in the market in recent years, then the potential
here is many times larger. Not only new shops can be
implemented with GRID 2.0, but also new functions can be
added to existing shops as well as shop ideas for other
platforms such as mobile apps or social networks. If the
concept works, it will sustainably change the e-commerce
market.
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Page 19

20. Roadmap
The following roadmap serves to illustrate the individual
steps, but may change in the course of implementation:
01.05.11 ! Launch of concept and development in Berlin
01.12.11 ! Realease Prototype GRID 2.0
! ! ! Launch Partner Programm and Onboarding
01.02.12 ! Development of website and marketing information
01.05.12 ! Launch GRID 2.0
commercetools platform - Vision Paper
2011 - Dirk Hoerig - Seite 20