In the early 2000’s, hosting companies started offering customers to run script applications, not just host static HTML files, on their hosting accounts. The most popular scripting language was (and still is) PHP. Bulletin board systems such as phpBB became highly popular. Content management had an upswing and phpNuke and all its descendants broke ground. It didn’t take long for CMS’es to mature and Mambo, now known as Joomla, TYPO3 and Drupal gained success. These tools offered a form of editorial control that most site owners hadn’t had access to up to now. The open sources license meant that anyone could download and install them on the nearest shared host. Blog tools like Wordpress also started gaining traction as blogging became more and more important as a marketing tool.
The new wave of PHP based CMS’es meant that a lot of static sites could now got regular updates by people not skilled in HTML and CSS. It opened up markets for modules, customizations and themes (“skins”) and I believe a whole generation of freelancers took their early steps exploring the business opportunities afforded by open source software.
More and more people started shopping online and the e-merchants needed tools too. From having relied on expensive custom-built solutions they could now buy products off the shelf or choose open source alternatives.
All in all, our little agency was rather well positioned. We’d chosen a platform that had enormous flexibility and a strong community behind it. I still maintain that Drupal’s community is the best and beats Wordpress’s hands down. There’s no gray market of “sold” plugins and you know exactly what you get when you download an extension (module).
And Drupal had a lot going for it. It was extremely good value for money. We built community websites that were integrated with mainframe systems. As well as the simple brochure sites that had now become a requirement for businesses to find customers.
But as more and more people found their way online the number of websites and Internet users grew exponentially.
As a result, the tools got easier and easier to use. There were suddenly tools that even beginners could handle and which produced great looking results. Website building platforms like Wix, Squarespace and Weebly were viable alternatives to a static website or a simple CMS. You didn’t have to have a hosting company or keep a CMS up to date for fear of being hacked. It was painless.
Starting around 2011, the market for content management products had changed:
Over the coming years we saw competent hosted (SaaS) products appear filling the niches of blogging tools (inbound and content marketing), community and intranet software and e-commerce.
An economist would not be surprised. What we were seeing was, and still is, the commoditization of self-hosted software. The cloud combined with mass-market adoption has led to pre-packaging of solutions that before could only be purchased from a consultant or agency.
This commoditization and diversification are in many ways direct threats to the traditional agency business model of providing software integration and customization of content management systems.
But there’s a bright lining on the gray clouds that are starving the old business models of much needed light. While the lower end of the market is less profitable than before due to the economies of scale these hosted tools enable, the higher end becomes more and more valuable. These hosted “off the shelf” (OTS) platforms serve the needs of a majority of users but not those of all.
Right now only the dragons roam there. It’s a field where enterprises invest in solutions that offer extreme abilities to track, predict and optimize their sites. Personalization and marketing automation are the holy grail of this tier. Currently only a handful of products can be considered players in this field. Among open source, I’d say Drupal is the only competitor.
But even at stakes these high this tens of million size playground is seeing competitors. Ambitious SaaS services are popping up every day offering key functionality such as advanced plug-and-play personalization and customer experience management for a fraction of the price, built upon open source readily available platforms like Wordpress and Drupal.
What web agencies can do
Focus on customer needs and goals
Draw from their skills
That guidance is less about technical focus and more about focus on digital marketing and design. It’s about the ability to connect the various piece to create a cohesive and effective customer experience.