Why Choose Magento? The Open Source Advantage for Businesses
By John Prendergast
Director at Aonach
Magento is an Open Source platform. What does that mean and why should you choose an Open Source solution for your business?
The merits of Open Source is a topic that is traditionally often the preserve of the technical team and your IT department. However, this article aims to inform business owners, board members and eCommerce managers what the business advantages of Open Source are when it comes to choosing an eCommerce platform.
Explore the advantages that Magento Open Source can provide to your eCommerce business (Whether your model is B2B, B2C or DTC or all three)
The merits of Open Source is a topic that is traditionally often the preserve of the technical team and your IT department. However, this article aims to inform business owners, board members and eCommerce managers what the business advantages of Open Source are when it comes to choosing an eCommerce platform.
Explore the advantages that Magento Open Source can provide to your eCommerce business (Whether your model is B2B, B2C or DTC or all three)
Introduction
Selecting the right platform and partner for your eCommerce business is crucial for online success. One of the key decisions is whether to choose a proprietary solution, a Software as a Service (SaaS) solution, or an Open Source platform.
This article will explore the advantages of choosing an Open Source platform such as Magento® for your eCommerce channel.
Open Source software is everywhere - while once it was the domain of the geek, it is now truly ubiquitous. It's highly likely your organisation already uses Open Source software in some guise. For example 70% of mobile phones use Android which is Open Source software, Linux and Apache power a huge proportion of internet web server and cloud computing solutions.
Large corporate technology firms such as Google, Microsoft, IBM, Meta and SalesForce have all made significant Open Source investments and acquisitions.
An Open Source eCommerce platform is not for everyone. However, if your eCommerce channel is strategic to your business, you aim to build a significant revenue stream, or have custom functionality needs - it is definitely worth investigating.
Below are some considerations to help you decide on the right platform for your eCommerce business and understand the benefits of the Open Source approach.
This article will explore the advantages of choosing an Open Source platform such as Magento® for your eCommerce channel.
Open Source software is everywhere - while once it was the domain of the geek, it is now truly ubiquitous. It's highly likely your organisation already uses Open Source software in some guise. For example 70% of mobile phones use Android which is Open Source software, Linux and Apache power a huge proportion of internet web server and cloud computing solutions.
Large corporate technology firms such as Google, Microsoft, IBM, Meta and SalesForce have all made significant Open Source investments and acquisitions.
An Open Source eCommerce platform is not for everyone. However, if your eCommerce channel is strategic to your business, you aim to build a significant revenue stream, or have custom functionality needs - it is definitely worth investigating.
Below are some considerations to help you decide on the right platform for your eCommerce business and understand the benefits of the Open Source approach.
Cost Considerations
Both capital investment and total cost of ownership (TCO) are key drivers for decision making around the acquisition of any new strategic technology and that is no different for eCommerce platform selection.
TCO - It is genuinely difficult to assess the total cost of ownership of any technology as the costs vary depending on your functional and business requirements. Also this difficulty is exacerbated by marketing disinformation and the fact that all vendors, agencies and consultants all have their own agendas. (Disclaimer: I run a Magento OpenSource eCommerce agency and naturally have my own bias).
Remember, whatever platform mix you choose it will be difficult and expensive to leave. Once you have completed your build you will have so much invested in the Design, UX, Customisation and Integration - all of which you will need to re-invest in should you decide re-platform. Therefore it is important to choose wisely and ignore marketing campaigns which are not evidence based.
The cost of running an Open Source platform is influenced strongly by competition in the marketplace. There are many agencies vying for your business which drives the cost down.
Free license for life - Pay no ongoing platform licence fees. Magento is distributed freely under an Open Source Licence. Add value to your business by investing in your own site rather than in platform licensing fees. (Note - it is not free to build or run as you will need a dev team and a hosting solution but there are zero licence fees to pay).
The cost of running a SaaS based eCommerce business puts you at the mercy of the vendor who can change the rules at any time. For example if your vendor suddenly decides on a 0.25% levy on B2B transactions that means for a mid market B2B merchant with a €10M per annum turnover of transactions that would be settled offline there would be an annual cost of €250,000 on top of the licence, App and Agency fees. That additional cost would be zero with Magento.
The cost of running a SaaS based eCommerce business is significant as you scale. Whereas the cost of running an Open Source solution benefits by economies of scale.
TCO - It is genuinely difficult to assess the total cost of ownership of any technology as the costs vary depending on your functional and business requirements. Also this difficulty is exacerbated by marketing disinformation and the fact that all vendors, agencies and consultants all have their own agendas. (Disclaimer: I run a Magento OpenSource eCommerce agency and naturally have my own bias).
Remember, whatever platform mix you choose it will be difficult and expensive to leave. Once you have completed your build you will have so much invested in the Design, UX, Customisation and Integration - all of which you will need to re-invest in should you decide re-platform. Therefore it is important to choose wisely and ignore marketing campaigns which are not evidence based.
The cost of running an Open Source platform is influenced strongly by competition in the marketplace. There are many agencies vying for your business which drives the cost down.
Free license for life - Pay no ongoing platform licence fees. Magento is distributed freely under an Open Source Licence. Add value to your business by investing in your own site rather than in platform licensing fees. (Note - it is not free to build or run as you will need a dev team and a hosting solution but there are zero licence fees to pay).
The cost of running a SaaS based eCommerce business puts you at the mercy of the vendor who can change the rules at any time. For example if your vendor suddenly decides on a 0.25% levy on B2B transactions that means for a mid market B2B merchant with a €10M per annum turnover of transactions that would be settled offline there would be an annual cost of €250,000 on top of the licence, App and Agency fees. That additional cost would be zero with Magento.
The cost of running a SaaS based eCommerce business is significant as you scale. Whereas the cost of running an Open Source solution benefits by economies of scale.
Ownership & Control
If the investment in your eCommerce business is strategic to your business, then it is important to evaluate how important ownership of the IP, Data and overall solution are to your company. Some of the advantages that Open Source Solutions provide your business are as follows:
- Determine you own uptime - Self hosted Open Source solutions cannot be shut down by the SaaS vendor. There is lots of evidence of SaaS platforms restricting customers' online stores unilaterally due to concerns (real or imagined) that the merchant is in breach of some term or condition of the agreement or an interpretation of a compliance risk (which may or may not be applicable to your operating jurisdiction).
- Negotiate the best rates - Open Source solutions tend to be Payment solution agnostic and you can negotiate your own rate with whichever Gateway / Payment methods suits your business. Conversely, SaaS platforms will typically try to tie you into their payment method and take a small slice of all turnover.
- B2B Freedom - If your eCommerce does not require payment but aims to provide a method of gathering leads or allowing B2B customers to generate large quotations then Open Source is not tied to transactions or payment.
- Data Ownership - Your data belongs unequivocally to your business. SaaS solutions typically aggregate data from your site and use it to “improve the service” and “develop the platform”. That sounds innocuous until you realise they are using your data to improve the platform for you and for your competitors.
Security
System security is a critical determinant for platform selection. Open source eCommerce platforms have the following security advantages:
- Transparency and Code Audit-ability: One of the biggest security advantages of open source software is its transparency. Since the source code is publicly available, it can be audited by anyone, which is particularly crucial for e-commerce platforms handling sensitive customer data and financial transactions. This transparency allows for the identification and rectification of vulnerabilities that might otherwise be overlooked in proprietary software. This transparency also means that security is more robust by definition as “security by obfuscation” (often used in proprietary solutions) is not even an option.
- Rapid Response to Vulnerabilities: Typically the open source community responds quickly to security threats. When a security flaw is discovered, it's not uncommon for solutions or patches to be developed and released swiftly by the community, as opposed to waiting for a single vendor to issue an update. This rapid response is crucial for e-commerce businesses that need to maintain the highest security standards to protect customer data and maintain trust.
- Community Collaboration and Peer Review: The collaborative nature of open source projects means that a large number of developers, including security experts, are continuously examining and enhancing the code. This widespread peer review process often results in more secure and robust software. For e-commerce, where security is paramount, having a multitude of experts contributing to the software's security can be a significant advantage.
- Powerful Security Scanners: These days all sites are subject to constant threats from Malware and hacker exploits. There are significant business concerns both in terms of repetitional damage and risk of compliance breaches. Luckily Magento benefits from the availability of a powerful built in Security Scanner which is free and can be accessed from your Magento Account. This is amplified by an amazing security toolset from Sansec including there eComScan which is a must for every Magento merchant.
Resilience
When choosing an eCommerce platform for your business, the resilience of the solution is an important consideration. Here are some of the business continuity and resilience advantages of Open Source:
- Fiscal Independence - Your business is not reliant on the survival or viability of another business, which can be difficult to assess. You don't need to know how well funded a third party such as a SaaS vendor is.
- Functional Independence - Your business is not reliant on the commitment of a third party to functionality you rely on. Sometimes proprietary solution providers will unilaterally decide a feature (or platform) is no longer important or profitable and may discontinue it.
- Technical Independence - You can determine your own functional roadmap and are not reliant on a third party to prioritise the functionality your business needs.
- Resource Resilience - There is a large community of Open Source eCommerce developers and agencies who can support you and help build your business. This gives your business a huge resilience and takes out a significant single point of failure.
Flexibility
By definition an open source solution gives you unparalleled flexibility. If you can imagine it you can build it! This can provide your business with a huge competitive advantage over your competitors who are tied to the constraints of a SaaS and the features that all your competitors have.
- Magento has a powerful configurable feature set out of the box. These core features allow you enormous flexibility in the development of your site. There are too many features to list here but worth noting the the particularly powerful functionality around multi store / multi currency and multi lingual capabilities, which gives huge flexibility for scaling businesses (without adding huge costs).
- There is a large library of third party plugins (called Extension in Magento) available for open source eCommerce projects with over 4000 extensions listed in the Adobe Marketplace. These extend and supplement the functionality provided by the core solution to allow businesses with the ability to leverage the work of others and build solutions rapidly. There are a large number of Magento Extension vendors including: Amasty, Mageworx, Mageplaza, Magezon, Yireo and many others.
- If your business needs bespoke functionality you will have a framework to develop and support that.
- Open source solutions will allow your eCommerce platform to talk to ANY third party system be it ERP, POS, WMS or Logistics solutions not just the popular ones.
- Open source solutions will allow you to tailor your integrations to your specific business needs and process flows.Open Source Solutions
- Open Source Solutions give you the freedom to choose any hosting infrastructure partner you like. In the Magento ecosystem there are many specialist hosting providers who can help optimise and tune your set up for you as well as providing specialist support.
Differentiation
A key competitive advantage can be derived from the ability of your business to differentiate itself from your competitors.
- Design - This differentiation and flexibility extends to the look and feel of your site. This is ultimately flexible in Magento and the front end can be tailored to your business / brand / marketing needs. The design is abstracted via a template and there are many templates and front end solutions available for Magento including a very exciting proprietary solution from Hyvä
- Functionality - If you are looking to build a differentiated solution, open source platforms give you the freedom to create bespoke functionality for your business. You are not constrained by the decisions and roadmap of the vendor.
- Business Processes - You may want to run your business differently. Part of your competitive advantage may lie in your ability to differentiate or you may simply have upstream legacy constraints. Open source solutions allow you to be different.
Community
Community sounds like a strange and fluffy business advantage. However, in the context of eCommerce solutions the community forms a critical part of the ecosystem you are buying into. The designers, agencies, developers, 3rd party solutions all help enhance and drive the platform forward. Open Source communities tend to be creative and enthusiastic, always pushing the boundaries of what is possible and a source of inspiration for your business.
This commitment to community is remarkable in the Magento ecosystem and is underpinned by the work of Adobe, the Magento Association and Mage-OS.
In contrast SaaS vendors tend to cannibalise the creativity of their community, undermining the solutions of third party developers when they achieve a measure of success by re-creating the functionality themselves and including it in the solution.
This commitment to community is remarkable in the Magento ecosystem and is underpinned by the work of Adobe, the Magento Association and Mage-OS.
In contrast SaaS vendors tend to cannibalise the creativity of their community, undermining the solutions of third party developers when they achieve a measure of success by re-creating the functionality themselves and including it in the solution.
Risk
It is important to evaluate the Risk to your business associated with each technical solution you are considering.
Open Source solutions tend to ameliorate inherent risks of Proprietary and SaaS solutions. You need to ask yourself the following questions:
Open Source solutions tend to ameliorate inherent risks of Proprietary and SaaS solutions. You need to ask yourself the following questions:
- What happens if the vendor is acquired? Are you exposed to a strategic change in direction?
- What happens if the vendor goes bust or de-prioritises eCommerce?
- What if the vendor discontinues functionality that you depend on?
- What if the vendor unilaterally changes the commercial agreement?
- What if the vendor decides to “pause” your store while investigating a complaint against you?
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