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Hey Magento, Imagine This...SaaS Is Not Dead

A couple of weeks ago I came across an article on LinkedIn by Mark Lavelle, CEO of Magento, with a title that made me laugh. I’m not talking about a light-hearted chuckle, I’m talking about the sort of involuntary laugh that made me thankful I didn’t have a mouth full of coffee because it would have been sprayed all over my computer screen.

Lavelle’s article, entitled “Why the shift to cloud computing reminds me of the Ford Model-T,” declares that “The post-SaaS era has arrived,” a statement that lives in stark contrast to the position held by virtually all of the top industry analysts. However, considering that the alternative to Henry Ford’s Model-T at the time was a horse drawn carriage I’d say he’s onto something. Let’s see how this applies to Mark's vertical of commerce.

Keep it Simple

What the Model-T offered consumers at the turn of the century was an affordable way to go further, faster. Henry Ford was focused on providing a quality car to the American people at an affordable price point. Achieving that goal would mean that an unprecedented number of newly minted drivers would be taking to the road and demand for his cars would increase dramatically. In order to meet that demand Ford knew he needed to perfect his infrastructure.

Today’s SaaS platforms know that, too. Because of a focus on strong, scalable infrastructure, platforms like Shopify Plus and Bigcommerce are able to provide their merchants with a server uptime SLA of 99.99% while ramping to process well over 500,000 orders per hour during peak traffic without a drop off in site performance for their merchants. In addition several non-commerce SaaS tools such as Slack and HubSpot are also experiencing explosive growth by taking a similar approach to infrastructure and focusing on the shared needs of their users to make smarter platform improvements.

Going Further, Faster

Few markets have grown and changed more rapidly during the past few years than online commerce. With every passing month more competitors emerge in almost every vertical and along with them comes a new crop of tools and widgets designed to increase conversion or deepen customer loyalty, making time-to-market an important part of success for online retailers.

SaaS commerce platforms like Shopify Plus provide an environment that allows merchants to design, develop and deploy their online stores in a handful of weeks. By contrast, launching a well designed and developed on-premises platform like Magento will take a merchant an average of four to five months. That’s a considerable gap when you consider that time is money (or lost money depending on how you look at it).

Creating a Rising Tide

There’s a reason the Model-T was named the most influential car of the century and to this day, at 16.5 million sold, is number eight on the top ten list of the most popular cars of all time. Ford’s Model-T changed personal transportation forever by taking something that had previously been reserved for the wealthy and bringing it to the masses. By empowering individuals with a tool that was capable of literally pushing the boundaries of where they were able to go, Henry Ford broke down some significant barriers for Americans everywhere. The Model-T was far more than just the next car to be created, it was the tipping point that altered transportation in America and around the world forever.

In the realm of online commerce, SaaS is the Model-T. SaaS platforms are providing powerful tools to merchants--upstart and established alike--who are seeking a way to quickly build a strong and stable foundation that they don’t have to think about. This foundation will then allow them to focus on revenue generating activities, such as ongoing marketing services, rather than squandering thousands of dollars every year to simply support and maintain a platform in need of constant attention. Now that the barriers to entry have been lowered by SaaS commerce platforms it’s never been easier to go from concept to commerce. Just ask brands like Beard Brand, MVMT or Pura Vida.

The Post-SaaS Era

Solutions like Amazon Web Services, Microsoft’s Azure Cloud and the Google Cloud Platform have certainly hastened the commoditization of computing power and connectivity across most industries. However, to say that we’re now in the “Post-SaaS” era, particularly as it relates to commerce, is both arrogant and reckless. For further proof we need only to observe the events of last week in which Salesforce signed a definitive agreement to purchase Demandware, a well respected multi-tenant SaaS commerce platform targeting enterprise merchants.

The fact remains that despite the commoditization of computing infrastructure in recent years the number of merchants choosing to migrate or launch their web stores on SaaS platforms has skyrocketed while market share for a legacy on-premises platform like Magento continues to dwindle in the wake of their eBay firesale. We’ve yet to reach the computing equivalent of electric-powered or self-driving cars but with SaaS platform growth pushing the boundaries of cloud computing, we’re well on our way. So if you’re still nursing a Magento site perhaps it’s worth taking a closer look at a SaaS alternative and stop beating a dead horse [drawn carriage].