B2C Partners estimates the total U.S. market size for online retail software in 2009 is $415 million. We factor this based on the following:

1. Total U.S. online retail revenue was $166 billion in 2008
   (Source: Internet Retailer Top 500 Guide)
2. U.S. ecommerce growth was flat year-to-year in Q1-2009
   (Source: comScore)
3. Online retailers last surveyed spent 3-5% of revenue on development and technology in 2005 and 2006.*
   (Source: SORO Report 2007, Forrester Research & Shop.org)
4. Half of development and technology spend on ecommerce is for new features and site improvements (versus support and maintenance)
   (Source: SORO Report 2007, ibid.)
5. Half of the merchants surveyed report they still use an in-house, homegrown ecommerce platform — not a third party system
   (Source: Internet Retailer Top 500 Guide)
6. Typically a third of Year 1 costs for enterprise software are for software procurement (versus custom implementation)

Given these factors and assumptions, here are the calculations:

$ 166 billion online revenue
x 3% of revenue for development & technology
x 50% of dev/tech for site improvement (v. support)
x 50% of ecommerce platforms third party (v. in-house)
x 33.3% of Year 1 costs on software (v. services to deploy)
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$415 million market size for U.S. ecommerce software, 2009