Casa del Libro

Background
Back in 1995, Casa del Libro had been selling books on the internet, as a complement book-selling method to its established bookstores, working with a very artisan website and not integrated with the back office, running in an IBM AS/400 platform. As a result, everyday operations involved a great deal of manual processing. Since this operation obviously could not stand the growth expected under the agreement with AOL, the company decided to create a new vitual company from scratch.

At the beginning of 2000, Planeta group, who owns casadellibro.com, came up with development by investing in the best and the most expensive equipment and software available in the market. Based on Sun machines, the whole platform consists of 4 servers with 2 CPUs each, Solaris (Unix) as operating system, Oracle 8.i running in cluster as database manager, Vignette 5.6 to manage content and support e-commerce, and Excalibur v5.3 as the search engine. The superfluous design was considered the finest platform at that time, built to ensure the high performance, security, availability and scalability required for the project.

However, despite the huge efforts and money invested, this sophisticated platform, designed to support the operations, could not be integrated by the consultants, due to mistakes committed during the design phase. On top of that, the slowing down of Spanish ISP market, the dot.com crash, and the 9/11 terrorists attack were compounding, giving further tension to Planeta group to shift their priority, from a hyper-growth sales operation scenarios to cost control and loss reduction in the short term.

A discussion has been raised, should they continue with the existing platform and redesign it, or should they look for a new platform which incurs cheaper development cost and lower operation and maintenance cost? A newly proposed platform using Microsoft technology on HP servers, powered by Windows NT, with SQL Server as database engine, and Microsoft Commerce Server 2000 as e-commerce application, was considered promising enough.

Recommendation
There are several factors in evaluating these two alternatives. Planeta has made big investment in older platform, but to keep it and redesign it will definitely harm Planeta furthermore. Despite the positive projections made by analysts, the initial high ROI expected becomes a big question. Moreover, the consultants have failed to integrate due to mistakes committed during the design phase, and in my opinion, fixing system design flaws in a sophisticated platform could mean another big investment.

Another factor to be considered is cost efficiency in the long run. The UNIX platform will require high maintenance cost. Planeta could regain part of its loss from investment in older system by developing Microsoft platform, which is considered to have much lower operating and maintenance cost.

Frankly speaking, having powerful but superfluous UNIX platform at that time was somehow just like driving Ford Mustang, powered by 5.4-liter supercharged V-8 engine, in a country road. It was not at the right place at the right time, and could be completely underutilized. It is better to design the system in a cheaper platform, and develope and rescale it along with market growth.

In conclusion, I strongly suggest Planeta to redesign casadellibro.com in Microsoft platform, since they would benefit in capital and operational expenses optimization in the long term.