winding road
One thing you can say about Microsoft's history with ecommerce: it's never been dull PHOTO: Nuno Silva

Microsoft has had a long and complicated relationship with ecommerce in general and with its ecommerce vendor, Digital River, in particular. 

Microsoft's ecommerce history started with its 1996 acquisition of Commerce Server from eShop, a company founded by Pierre Omidyar, who went on to create eBay.

The software never took off, and following a failed attempt at creating a native ecommerce solution, the company entered into a partnership with Digital River in 2010.

The two companies entered into an agreement in December 2014 to extend the Microsoft Operations Digital Distribution Agreement till March 31, 2017. Microsoft had the option of extending this agreement by up to four six-month periods, which if fully exercised, would have carried this agreement out until March 31, 2019. 

A recent run in with a Microsoft employee in my local pub reminded me of this deadline and produced this information: Microsoft ended its relationship with Digital River as a means for saving on its operational expenditures and was once again bringing its ecommerce development in house.

Microsoft Brings Ecommerce Back in House?

No mention of ecommerce was made on stage during the recent Ignite conference. But some still wonder if, by bringing ecommerce development back in house, ecommerce could benefit from the renaissance CEO Satya Nadella initiated in other parts of the company.

Microsoft has had a long, and somewhat challenging, history in trying to deliver its own ecommerce platform into the market. Around 2007, Microsoft started to part ways with its solution for reasons only known to the company, but the assumption is lack of significant traction after almost 20 years of investment.

I joined Microsoft in May 2010, following its launch of Microsoft Store on Commerce Server in mid-2009. In joining its ecommerce group I thought I was joining a build-out of the solution. After I arrived I learned the goal was to replace Commerce Server with Digital River, as the leadership decided using a more mature digital and international ecommerce solution would help the company accelerate its time to market. 

Note that at the time Apple was having tremendous success with both its online and physical stores, so Microsoft was feeling competitive pressure to reel Apple in and it was believed this was the fastest way to accomplish that.

Fast forward to late 2014. Siris Capital acquired Digital River, which kicked off the debate of whether Microsoft will or won't extend its relationship with Digital River, which continues to today. 

A Mixed Up Ecommerce Tale

It turns out my pub companion was wrong. 

Microsoft did not completely sever its relationship with Digital River, but has scaled it back substantially, but no further details are available. The feedback I have received is Microsoft is bringing more of the work in house, but its unclear if that means Microsoft is just taking on managing its own ecommerce efforts or has ambitions to re-start developing its own ecommerce platform to bring to market. 

Unlike late 2014, an online search of “Microsoft extends its agreement with Digital River in 2017,” produces no new results, only entries dated late 2014 or earlier on the first page.

Is the Timing Right for Microsoft and Ecommerce?

Given the resurgence at Microsoft under Satya Nadella's leadership — its stock has appreciated roughly 125 percent under his guidance due to its focus on the cloud, acquisition of LinkedIn and more — is it possible the company is looking to further expand on its newfound energy? 

While I have not been able to get a direct “yes,” one can tell the mindset within the Microsoft ranks and here in the Seattle area is much more upbeat over the last 3 or so years than previously. So what do you think? Can Nadella bring some of his Microsoft magic to ecommerce?