Industry Update: Control your cloud commerce destiny.

Exponential growth can be an exciting prospect for an online retailer that's moving up the ladder. But that kind of growth also can be crippling for a business whose digital commerce platform isn't keeping pace.

E-commerce companies with rapidly changing needs can quickly outgrow their e-commerce platforms as they scale their businesses.

In a 2014 Internet Retailer survey, 41.4% of respondents said they expected to replace their e-commerce platforms within a year. Another 22.3% planned to do so within one to two years.

Retailers that have the flexibility to scale their businesses and their digital platform capabilities simultaneously can avoid the pitfalls–and potential failures–that come with having to find a new platform year after year, says Mike Bates, CEO of HotWax Systems, which offers an enterprise open-source digital commerce platform.

"Indigestion is often more dangerous than starvation for digital commerce businesses," Bates says. "When they start out on a relatively simple digital commerce platform and then experience triple- or quadruple-digit growth year after year, that can be a real danger for them."

A retailer that starts out with a single storefront might expand its operations only to discover it needs to upgrade its digital commerce platform so it can handle increased logistical demands such as invoices and purchase orders for multiple locations. Then if a year later the retailer further expands onto a new continent, the business might encounter a need for its platform to manage orders in multiple languages and currencies.

Bates says that having to constantly upgrade or switch platforms can wreak havoc on a business. "It's highly disruptive and really expensive," he says.

The HotWax Commerce platform is designed to let businesses scale their operations beyond a simple e-commerce storefront. It enables retailers to access complex back-office tools, including systems to manage orders and inventory. Retailers can also manage multiple warehouses and storefronts accepting various forms of payment.

 "The platform has a lot of capabilities to it, and most people don't use them all right off the bat," Bates says. "It's something people grow into, and that's very much our intent."

The platform is based on an open-source foundation and powered by the community-driven Apache OFBiz Project. Open-source software traditionally has been considered a money-saving mechanism for businesses that use it because they can avoid having to pay the licensing fees that proprietary software systems require.

"It's always been about cost savings in this conversation. But the main benefit of open source in an enterprise context is its flexibility and its configurability," Bates says.

In one example of that flexibility, HotWax client cabi, a direct sales fashion company with $250 million in revenue last year, was able to tailor its digital platform around its complex business model. Because cabi relies on a hosted direct sales model designed to enable individuals to sell fashion collections online and in shoppers' homes, it has unconventional requirements for its product pricing and promotions. "They were expanding what they wanted to be able to offer in terms of how they can take sales," Bates says.

As a result, cabi was able to better enable its consultants to sell products while optimizing back-office operations.

"That further supports the idea that the digital commerce system empowers the business and doesn't constrain the business," Bates says. "It's about recognizing the unique- ness of the business' idea and the value that business is bringing to the market, and then getting behind that and pushing it rather than trying to capture it in a box that someone already built."