At InteractOne, we’ve encountered many merchants in the past couple of years who were facing the need to migrate off of Magento 1 and wondering if they should migrate to an SaaS (software as a service) solution like BigCommerce or Shopify.  The question is very common since support for Magento 1 is ending in June of 2020 and merchants must migrate to Magento 2 or a competitive platform like Shopify or BigCommerce. In the past 5 years BigCommerce and Shopify have evolved into feature-rich, high performance platforms capable of hosting both small and enterprise level sites.  As they have grown, so has their flexibility and the community around them. Like Salesforce, they have created platforms and APIs that can support robust 3rd party applications and integration making it possible to build scalable websites tailored to complex business needs. There are several important factors to consider when choosing between Magento and a SaaS alternative.

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Features

One of the biggest considerations you must take into account when comparing these platforms  are the features you get right out-of-the-box. Magento is a more feature rich application than SaaS options such as BigCommerce and Shopify. Those features provide flexibility and power, often times required by enterprise level organizations but not necessarily needed by mid market or small businesses.  It is typically preferable to use software that out-of-the-box solves the majority of a business’s requirements. That means for larger companies with more complex requirements, the feature rich Magento is oftentimes a much better solution since it requires less 3rd party code and customization than a SaaS solution might in order to solve for the same set of business requirements.

With many features comes more complexity. Magento, because it is more feature-rich and complex takes longer to learn how to administer.  Shopify and BigCommerce on the other hand have a much smaller learning curve for administering features. For smaller companies with fewer and possibly more inexperienced resources, a SaaS eCommerce platform can be a much more practical solution.

Third Party Apps

If the out-of-the-box features of your eCommerce platform are not able to meet your business needs, Magento, BigCommerce and Shopify all have marketplace app stores where you can purchase additional features and integrations from third party app providers.  While Shopify, BigCommerce and Magento have lots of third party apps to choose from, how the apps are billed, installed and managed is unique to each platform. With Magento you purchase an app one time and have a developer install it using a technical process. Whereas with Shopify and BigCommerce you pay for the apps on a monthly basis and simply install them with a click of a button.  It’s important to note that on Magento, installing 3rd party apps may require significant developer support if the app being installed conflicts with other existing third party apps already installed on your site. That support combined with the need to install updated versions of the apps typically makes Magento apps carry some significant maintenance and support cost over the long term.  So, even though Shopify and BigCommerce apps may seem more costly (because of the monthly fees) when compared to Magento apps (that you purchase one-time), they are typically cheaper than Magento apps when considering the additional maintenance and support costs required to install and maintain Magento apps.

One nice benefit of Magento third party apps is that they are more easily extended or customized than Shopify or BigCommerce apps.  This can be a great benefit for you if there are Magento apps that support some but not all of the functionality needed or if you need to integrate the functionality of two separate third party apps.  As with other similar scenarios a key benefit of Magento is the flexibility it provides for efficiently meeting custom or unique requirements.

Cost

Another consideration typically top of mind when considering platforms is cost to build and manage.  Magento is usually similar to Shopify and BigCommerce when comparing site build, licensing and hosting costs.  However, there is a significant difference when considering long term total cost of ownership. That is because Magento requires developer maintenance and support to install patches and upgrades, which occur on a somewhat frequent basis (usually quarterly).  With a SaaS solution, the development maintenance and support costs are significantly lower since they are built into the monthly fee that includes maintenance, licensing and hosting.  

Also consider that Magento typically costs a good deal more to manage from a human resources standpoint.  As previously mentioned in the ‘Features’ section, Magento is feature rich and requires technical oversight, which means it typically requires more senior level personnel with software management experience to manage.  And senior level personnel with software management experience will command higher salaries. BigCommerce and Shopify on the other hand do the software management for you and are both easier to administer, so their sites can be run by less experienced personnel who don’t necessarily need to have a background in software or software management.

Scalability

While SaaS platforms can handle large volumes of traffic for smaller catalog sites (ie. Kylie Cosmetics), they typically don’t provide the resources needed to manage large enterprise sites.  Enterprise websites with large catalogs, traffic volume and robust data integrations require the flexibility needed to support large scale operations. This is where Magento is a clear winner.  Its flexibility and ability to maintain separate databases for customers, orders and catalog make it a great platform for supporting enterprise-level businesses. With Magento you can configure your hosting services to automatically spin up and dedicate the resources needed to keep the site running fast no matter the demand for resources.  That said, a good hosting solution is required to make Magento scalable. Third party hosting providers like Webscale are what we recommend for Magento sites that need to be highly scalable. Webscale provides that flexibility by hosting Magento in the cloud and adding and removing resources on the fly per demand.

B2B

Another clear area of differentiation for Magento versus Shopify and BigCommer is B2B.  Magento Commerce Edition (the paid version) comes with a suite of features for B2B users.  These features include spending limits, shared catalogs, shopper permissions and customer segmentation which offer a lot of value to B2B merchants. These out-of-the-box features have allowed Magento to clearly differentiate itself in the B2B eCommerce arena. While Shopify and BigCommerce do have some features or 3rd party modules that can provide things like customer group specific pricing, they are nowhere near as feature rich when it comes to supporting B2B functionality.  For businesses with moderate to substantial B2B eCommerce requirements Magento is a clear winner in terms of value and performance.

Multi-Site and International

Magento has always provided the ability to support multiple websites from one admin.  This allows site owners to create separate sites for different countries or brands all managed from a single admin and shared catalog.  There are many efficiencies to be gained from this feature as it reduces the time and overhead needed to manage several different sites.  While Shopify and BigCommerce do support the ability to provide different currency display per country on the front-end, they do not provide a multi-site feature that allows for several separate sites to all be managed from one admin.  If a Shopify or BigCommerce merchant wishes to have country or brand specific sites, they must create separate websites with separate admin logins and then integrate these sites together via APIs and 3rd party apps for the sake of managing inventory and fulfillment.

Controversial Product

If you are selling controversial products such as guns & ammo or vaping there is concern about SaaS software and their policies.  Shopify for example has been known to discontinue support for certain types of these products and give their clients selling these products a very short time to migrate off their platform or stop selling those products completely.  That is a huge risk that can be mitigated by using an open source product like Magento. If you are selling controversial products on Magento and need to change hosting providers, payment gateways or any other tech in order to find support or meet compliance you have the ability to easily do that without being forced to face a complete platform migration.

Compliance

Similar to the prior point about controversial products, some industries are heavily regulated (ie. health care) and require additional measures of compliance not provided by Shopify or BigCommerce.  In these cases, it is necessary to use a software like Magento where you can manage and make any changes needed to the entire tech stack (servers and software) in order to meet necessary compliance standards.  Also, some larger companies have internal compliance regulations that require complement ownership and control of their tech stack. For those companies an SaaS solution won’t work with internal policies making a software like Magento a much better fit.

Flexibility

While Shopify and BigCommerce do have robust APIs and flexible front-end code they don’t provide developers with full access to override core functionality. Conversely, Magento developers have full access to the Magento code and tech stack and can override any core functionality for the sake of customization. So if you have a need for highly custom features such as to create your own product designs, complex product configurations, headless front-end or tightly coupled ERP integration Magento is typically better suited to meet your needs.

Community and Marketplace

Another key factor to consider when choosing an eCommerce platform is the size of its community and third party marketplace.  A large community and marketplace help move a platform forward while also keeping the costs of custom development, third party apps and licensing in check.  Magento and Shopify both benefit greatly from large communities of developers and very robust third party app marketplaces. BigCommerce is catching up fast however as its platform is experiencing tremendous growth and its support community is also growing.  Other enterprise eCommerce platforms such as Oracle, SAP, IBM and Salesforce suffer from somewhat smaller communities and marketplaces which contributes to higher development and licensing costs.

Summary

Magento, Shopify and BigCommerce are all robust market leading eCommerce platforms and as we have discussed above, choosing the one that is the best fit for your business depends on many factors.  In general, larger, more enterprise businesses with more complex or B2B requirements will typically find Magento a better fit while smaller or more mid-market merchants with less complexity will find BigCommerce or Shopify a better value. Our recommended approach for making an eCommerce platform decision is to work with a solution partner like InteractOne to document key business requirements and demo the platforms via free trials and presentations.  From there, we can work to fairly compare all valid factors and requirements and ensure you choose a platform that is the best fit for your business now and also supports your growth plans for the future. If you would like to discuss your situation and options with the pros at InteractOne, please drop us a note.