Magento Enterprise: Is It the Right Choice for Your Ecommerce Business?
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Businesses launching their first ecommerce site have a lot of concerns to juggle.
But, businesses outgrowing their ecommerce platform and looking to launch a successful enterprise ecommerce site?
That’s a whole ‘nother ball game.
To launch an ecommerce site that will work for a growing midmarket or enterprise brand is no small feat. There are advanced features and integrations with mission-critical systems to consider when launching your online store.
You have established a customer base, but need the capacity to grow and scale your operation. Yet, something isn’t working about your current system and you’re looking for a new platform to run your ecommerce website.
Magento is often top of mind for businesses looking for an enterprise-grade shopping cart software and a content management system (CMS). But is it the only option? In this deep dive, we’ll look at the Magento platform as a whole, the options for larger businesses, and the pros and cons.
Magento Community vs Enterprise
Magento is an open source ecommerce platform. It is written in PHP, and the software utilizes the Zend Framework. According to data from BuiltWith, there are currently 187,948 live sites running on Magento.
When we talk about Magento options for midmarket and enterprise businesses, there are two options.
1. Magento Open Source (aka Magento Community Edition).
This is a free version with open source code for everyone to use. It doesn’t require a subscription. While the price of free may sound right, keep in mind that this is only for the license fees. You will still need to consider the costs of hardware, hosting, backups, developer work, PCI DSS compliance and more when you think about your total cost of ownership.
2. Magento Commerce (aka Magento Enterprise Edition or Enterprise Cloud Edition).
Enterprise Edition (EE) is the on-premise, self-hosted version and Enterprise Cloud Edition (ECE) includes cloud hosting through Magento. EE and ECE both have steep costs, although they do come with more technical support. You need a specific quote from the Magento team to know how much you’ll pay (these quotes start at around $40K/year for smaller businesses).
Magento End of Life: Prepare for the Sunset
It is also worth noting that there is more than one version of Magento: Magento 1 and Magento 2 both exist. Magento 1 was the original product launched by Magento back in 2008. Magento released their new version in 2015.
For the last few years the two versions have existed simultaneously; however, in 2018, Magento announced the official End of Life date for Magento 1. Magento 1 is set to be sunset in June of 2020.
What does the sunset mean? Essentially after June of 2020, Magento will no longer be maintaining the Magento 1 version. Without these essential updates, sites still running on Magento 1 at that time will be at risk. For this reason, merchants currently on Magento 1 are largely in the process of replatforming either to Magento 2 or to another platform all together. Find out more about the Magento 1 End of Life and what you can do if you’re a merchant currently running a site on Magento 1.
How Magento Stacks Up Against Other Ecommerce Solutions
Of course it’s important to find the platform that’s the right fit for your business, and that will vary based on your business needs. But for the few things that most businesses care about (ease of use, cost, etc.) here’s how three major platforms compare.
Ease of Use
URLs are very customizable
Very easy, but limited functionality
Very customizable but requires developers
Difficult to install
What You Need to Build a Successful Magento Shop
Let’s say you’re set on Magento. What do you need to do to get your online storefront up and running? There are a few things you will want to make sure you’re prepared with before starting the replatform process.
1. Dedicated Magento developers.
Magento is open source, there is no drag-and-drop selection for you, and if you don’t have a team of developers (or at least one very dedicated developer), you’ll be left behind. It’s also critical that these developers have their Magento certifications to be qualified to work on the site. If you don’t have this expertise in-house, you will need to have an agency on retainer.
2. Integrations you’ve pre-selected.
Magento doesn’t have a single-click install plugin shop like BigCommerce does. To make sure all of your integrations work, you will have to preselect all your plugins and install them at the beginning. This can be a lot of work and, again, take developer resources to set up. And if you add additional integrations later on or further customize your store in the future, these integrations become more difficult to manage.
3. Reserved funds.
Magento is expensive. How expensive? It starts at $40,000 for small shops. If you’re a small business this is the amount you might pay, and those costs can quickly run you into the ground. For larger midmarket and enterprise brands, those costs will run much higher.
Of course, please note the caveat to this mentioned above: Magento Open Source is technically free except for the mounting costs of hosting, extensions, and developer costs. Cutting costs by going with a cheaper hosting provider or cut-rate developer are both not great options as they can have major impacts on the success of your site.
Magento Costs Add Up Quick
So far, we’ve considered some of the costs associated with operating Magento as an enterprise-grade platform, but let’s dive deeper into the potential costs and how they can affect your total cost of ownership.
1. Cost of Magento platform.
We’ve outlined the potential costs of this above, so we won’t continue to beat this drum. However, this is only the beginning of your costs.
2. Hosting costs.
Magento will likely encourage you to use their Cloud Commerce option, which comes with hosting through Amazon Web Services. You will want to make sure this quote fits your business needs, so bandwidth won’t be an issue. If you do work with the Magento Enterprise Edition that is not cloud-hosted, you will be responsible for maintaining your own servers or hosting. Hosting costs can start at $40 a month, but that likely won’t be workable for a site with much traffic. A realistic starting price is closer to $100+ and can range all the way up to $10k per month.
3. Maintenance costs.
You will need developer support to not just build your site, but to maintain it. When you need to install patches or updates in response to security concerns, you will need developer support. When you want to make marketing updates to keep your site competitive, you will need developer support. When you need to make sure all of your extensive customizations still work after all of these updates, you will need developer support. You will also have to make sure you remain PCI DSS compliant through all changes. These maintenance costs can really add up.
Can You Face the Learning Curve?
One of the major pros of Magento is that it’s open source, and you can customize it to create whatever you want. But how easy is it to do that? The learning curve with Magento can be steep.
There’s a reason we have stressed the need for not only having developers on site or on retainer, but specifically Magento-certified developers. Unless you are an experienced coder, it could take years until you fully understand the ins and outs of it. The task of starting on Magento is a feat that should only be tackled by veteran developers.
Mattew Coles, Account Director at MODELIC, emphasizes the importance of understanding your needs before deciding if the learning curve is worth tackling:
“It takes thought, effort, knowledge and money to properly button up a Magento site. Migrating to Magento 2 makes perfect business sense for some of our clients whose requirements demand core Magento functionality or rely on implementations that are only available or achievable with a true open-source platform. Others will benefit from the simpler development experience and ease of operations they find in BigCommerce, especially if their third-party systems have apps or can be connected through an API.”
Tyler’s Tees Case Study
Magento has ecommerce stores across all industries. Tyler’s, a Texas-based apparel company with a Texas-sized catalog of more than 60,000 SKUs, ran their site on Magento for a time, but were soon disillusioned with the number of Magento extensions they required.
As Ken Ward, Director of Ecommerce, tylerstx.com explains, “Everything you wanted to do, there was a different functionality and there was a different plugin that you had to buy.”
They also found they had trouble with the fact that working on Magento required so much developer work to achieve simple changes. After switching to BigCommerce, they were able to streamline their processes. “BigCommerce has made it a lot more efficient for us to update product information, images, add and remove items on the website, and adjust items for sale prices. BigCommerce has helped our small team to get a lot more work done in the most efficient way.”
Ultimately for Tyler’s, moving away from Magento allowed them to manage an expansive inventory with fewer hassles and a lower total cost of ownership, without sacrificing the shopping experience.
Should You Use Magento 2.0?
Only you can answer the question of if Magento is right for you. It will depend on your unique business requirements, your industry, and your budget. However, at the risk of painting with some very broad strokes, here are some generalizations that may apply.
1. I’m a giant company: Maybe.
If you’re a large business with very complex business needs and a budget to match, then Magento might be a good fit for you. This is especially true if you have extreme customization needs. Even as a large enterprise, you will want to be wary of the total cost of ownership and know that costs can quickly add up for enterprise builds.
As Allen Burt, the CEO and Founder of ecommerce agency Bluestout.com reminds businesses, “It’s easy to compare the flat pricing of platforms, but much harder to understand the extra costs of operating on them. The #1 unforeseen cost is ongoing development and maintenance. This is the biggest issue with old legacy platforms like Magento — the cost to host, monitor, maintain and update code far surpasses the flat cost to license it.”
2. I’m a small/medium size business: No.
Across the board, if you’re a small/medium sized business, you should work with an option that’s better suited for growing brands. If you don’t have developers in house to handle issues and updates as they arise, the costs, headaches, and learning curves of Magento make it entirely not worth it.
Another ecommerce industry expert and founder of a Magento developer agency, Paul Byrne, President of Razoyo, explains why moving to Magento doesn’t necessarily make sense for smaller merchants, “Some need a level of customization and integrations that may require it. However, smaller merchants will probably find that they are better off moving to another platform.”
Magento is a powerful platform that allows for major customization. For the right business with a big budget, that can be a tantalizing opportunity. However, Magento isn’t your only option if you want built in features and the ability to customize for order management, advanced marketing, customer segmentation, customer experience, and more.
SaaS platforms like Shopify haven’t always been considered by big brands who need to customize because they aren’t open source, so you’re limited in what you can change.
However, BigCommerce is a more open kind of SaaS. We’re helping you rewrite the rules of ecommerce by giving you the advantages of SaaS — like powerful performance, robust security, and a lower total cost of ownership — with the openness to customize. BigCommerce will let you build what you want, innovate to create incredible customer experiences, and grow with your needs.
Ready to find the right platform for your next stage of growth? Use our RFP template to get the answers you need.
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