When it comes to starting an eCommerce business, there are two types of platforms you can choose to power your shop with: software as a service (or SaaS) or open source. Their main differences have to do with ease of customization, capabilities and cost. Neither is objectively better; which platform works best for you will depend on your business needs and your budget.
eCommerce retail sales topped 4.13 trillion USD in 2020, and they’re set to keep climbing, according to Statista. As online shopping continues to grow, more and more people are seeking information on these two platform types, specifically what benefits they offer and what makes them different from one another.
To shed some light on this, we’ve put together two introductory guides to these different platform types. For information about open source, check out our guide to the pros and cons of open source. Now, onto the basics of SaaS.
What is SaaS?
Software as a service, or SaaS, is software that is licensed and delivered to you by a SaaS provider. This means that the provider takes care of all of the hosting, maintenance and security that you would otherwise have to manage yourself.
You pay for the use of the software via a monthly fee, which generally includes much of what you need to run your online business, including the eCommerce platform software itself, plus hosting, software updates and security patches. This makes SaaS a great option for businesses of a variety of sizes who may have fewer resources, but it also means constraints customizing your site from the ground up.
What SaaS Platforms Are There?
There are numerous SaaS platforms available; one of the more well-known ones is BigCommerce, which offers a more flexible, customizable type of SaaS platform popular with mid-market and enterprise brands. There’s also Shopify and Shopify Plus, which has lots of themes to choose from but limits the number of products you can sell, which can be problematic for businesses with big catalogs. Other SaaS platforms include Salesforce Commerce Cloud, Volusion and Squarespace.
The Pros of SaaS
Quick to Set Up
You don’t have to download or install anything to start a website on a SaaS platform; simply create an account and start building your store using the provider’s interface. SaaS providers usually offer many pre-built themes with drag-and-drop page-building, so no coding is required. This makes it quick and easy—depending on which software you choose and the functionality it has built in. Of course, quick and easy is a relative term. Many merchants will engage with a development agency to build their SaaS site, to take advantage of their expertise and previous success with building and maintaining other stores. Generally, stores on SaaS platforms can launch quicker than those on open source platforms, even if you work with an agency, because they’re not being built from scratch and there is generally less need for customization.
Much of the Site Maintenance Is Done For You
Most of the technical details—software updates, hosting, site maintenance and security—are managed for you by the SaaS platform provider. This is good for businesses that don’t have a lot of technical knowledge nor the budget for extra professional help. It’s all managed through cloud-based delivery for a monthly fee. This makes it user-friendly and simple to maintain. It also means that the merchant can focus on running and growing the business, as opposed to focusing on the nuts and bolts of site maintenance.
More Stability and Reliability
Open source platforms can have issues relating to extensions or plugins, as they are built by different developers and can be incompatible with each other. They also become outdated and unsupported and need to be replaced when new versions of the platform are released, which requires identifying and installing updated extensions. With SaaS platforms, there’s less risk of update-related breakages and security breaches. This provides merchants with peace of mind, as there’s less risk of lost revenue and reputation issues due to the site being down or security-related issues.
The Cons of SaaS
Lack of Customization
Without the ability to override source code, which you can do with open source platforms, there can be limitations to customizing a SaaS platform website. Platforms such as BigCommerce do provide some openness through APIs, though these customizations, like on open course sites, do require some programming investment. It’s likely that you will still require further apps and extensions not included in the software, to get the full functionality that you need and want. For example, BigCommerce partners with a number of providers for functionality such as payments, shipping, site search, etc. Shopify’s model provides these services themselves or via a proprietary software stack. If flexibility and providing an innovative customer experience is important to you, some SaaS platforms may not offer enough capabilities for your business or you may be forced into using a functionality provider not of your choosing.
Limited process and capacity
Some SaaS platforms have limited processing and SKU capacity. They can also decide what types of products a business will or will not sell using their platform, and they can change their minds whenever they like. This means that some stores start on a SaaS platform and then find they have to migrate to open source when they get too big, or when they want to sell something that’s not permitted by their SaaS platform. Some merchants have been given only a few weeks to move their sites to other platforms after their SaaS provider decides to no longer allow the sale of their type of product (for example firearms or cannabis products).
Less Choice of Features and Products
With many SaaS alternatives, you have to work within the confines of the platform. Some platforms don’t let you choose certain apps or features, meaning you’re locked into whatever they’ve selected. For example, Shopify has a proprietary payment provider. You can choose another payment provider but Shopify will charge a transaction fee of 2% of every sale that uses gateway. They also don’t allow access to certain features like multi-currency.
Extra Cost for More Functionality
As with most things in life, when it comes to eCommerce platforms, you get what you pay for. Some SaaS platforms bundle functionalities and services, making it easier to estimate costs and capabilities. However, often a SaaS platform will appear inexpensive, but that is because it provides very limited functionality (it’s how they afford to keep the price low). This means that you often end up having to pay for and install additional apps later on, to get the full functionality you require to run your store. The upside is you can start with a basic site and add functionality as you grow and based on need. The downside is that these costs can add up over time, sometimes unexpectedly.
Want to Find Out More
InteractOne has a team of highly skilled developers, site architects and solutions specialists who are very experienced in building and maintaining SaaS platform eCommerce sites for a range of different types of businesses. If you’re interested in learning more, reach out to us to discuss whether a SaaS platform could be right for your business.