If you’ve spent any time in the world of e-commerce during the past four years you’re familiar with the name Magento and the recently released v2.0, the first full-version release to the platform since April 2009. During my time as a Magento Enterprise sales manager there was a lot of hype around the evolution of the platform. So when M2 was finally released on November 17, 2015, I was immediately intrigued by a subtle but noteworthy aspect of Magento 2.0 that is relevant to any merchant considering it -- the need to replatform.
In previous versions of both the Magento Enterprise and Community platforms, there has always been an upgrade path that allowed merchants to adopt the most recent version of the platform with a minimal investment of time and resources. However, the new M2 framework is a significant departure from earlier 1.x versions, which means merchants moving to M2 must commit to fully replatforming. This is a much more significant investment and one that invites a “line in the sand” question: Is Magento still the right platform for my business?
Here are four key considerations for retailers determining which ecommerce platform is the best fit for their organization.
1. We’ve seen the future, and it’s in the cloud.
Software development, like commerce, is a world that evolves quickly and the past few years have been no exception. Perhaps the most notable change in both arenas has been the adoption of cloud-based software and infrastructure in virtually every area of life.
The trickledown effect of SaaS poster child Salesforce.com has been far reaching. Adobe Creative Suite migrating to the cloud, Microsoft’s pivot to Office 365, the massive success of Google Apps — these are just a few examples of Enterprise-grade technologies that have ushered us into the era of “SaaS Life” in which the use of SaaS products has become ubiquitous.
For merchants considering whether to rebuild on M2 or migrate to another platform, SaaS platforms such as Shopify Plus and Bigcommerce Enterprise offer compelling and proven alternatives. In the past, pure-play SaaS platforms were considered by many as “lower tier” options. Many Enterprise-level businesses perceived them as unproven or to have weak feature sets, too much downtime or lacking flexibility. Fast forward to 2016, and it is clear this is no longer the case.
These same platforms now play host to some of the highest traffic e-commerce sites in the world and are able to offer uptime SLAs that rival the best in the industry. In fact, Forrester predicts spending on ecommerce software will double between 2015 and 2019 and SaaS will account for 66% of that spending by the end of the decade. In short, SaaS platforms will soon be the norm, not the exception, for brands of all sizes.
2. If you build it...they will NOT come.
The very nature of SaaS makes it a massive win for merchants looking to grow their business. Ask any marketer and they will tell you, the notion of “build it and they will come” does not apply to ecommerce. To attract the right customers, you must invest in getting to know them and spend money to reach them on the right channels.
Building a web-store on a SaaS platform allows a merchant to roll-up the cost of hosting, licensing, sales tax compliance, fraud detection as well as other valuable services into a single monthly fee that is typically less than half the cost of a comparable on-premises solution like Magento.
Another valuable benefit of SaaS e-commerce platforms is that product upgrades are completely seamless and often free of charge. These sort of inherent benefits of SaaS allow merchants to shift more dollars away from maintenance costs and into areas of revenue generation such as marketing and conversion optimization.
3. The need for speed [to market].
Time to market is another area where SaaS platforms provide a baked-in advantage over an on-premise solution. Because the technical infrastructure is already in place, the average site launching on Shopify Plus or Bigcommerce takes roughly two months versus six months on Magento.
Another huge advantage for merchants in need of standing up a site quickly are the easy-to-use developer frameworks and intuitive administrator tools for managing site content, which also contributes to faster deployment.
4. Theory versus reality.
As mentioned, the notion that SaaS platforms are for smaller retailers is no longer the case (if it ever truly was). In the time since leaving Magento I’ve worked directly with merchants in the fashion, high-end furniture, and specialty foods verticals who have chosen to migrate their $5MM, $20MM, even $40MM online business off of Magento Enterprise and onto SaaS platforms in order to increase growth velocity. The positive impact that decision has made is noteworthy:
- The time spent in design and development was less than ten weeks for each project (compared with similar Magento projects taking 4-5 months to launch)
- These businesses experienced no downtime or site performance issues during Q4 despite massive increases in traffic due to the holiday selling season
- One of them, a fast growing high-end home furnishings brand, saw their organic CTR increase by more than 3,000% and organic impressions are up over 1,100%
- Each of these merchants have also commented on the increased ease of use when making site updates
- The ease of updating site information and products catalogs using web-based SaaS tools has also aided in accelerating growth for these merchants
As a dyed-in-the-wool Magento guy observing merchants migrate to SaaS tools has certainly been eye-opening for me. It’s like watching someone go from struggling to pedal their bicycle up hill to seeing them crest that hill and seeing begin to coast down the other side. No struggle holding back their inertia, just moving in the right direction.
To those of you thinking of building or replatforming your web-store for the express purpose of accelerating growth, I encourage you to remain vigilant and take stock of the changes that have been happening since you last examined SaaS e-commerce platforms. I think the list of native features and maturity of app networks will surprise you.
Talk to people who can provide you with insights based upon experience. In more cases than not, SaaS platforms offer the same functionality with a much lower cost of ownership than Magento, quicker deployment and far better user experience, resulting in positive return on investment in the short- and long-terms.
The simple reality is that the future of online commerce is in the cloud. Don’t make the mistake of placing your business in the hands of a company who just figured that out this year.