(This is a guest post from our friends over at JetRails, a fully-managed white-glove eCommerce hosting service.)
Magento 1 reaches its end of life on June 30th, 2020. Many users of this popular eCommerce platform plan to migrate to a newer eCommerce platform. However, many more businesses are still somewhere on the spectrum between deciding what eCommerce software, such as Magento 2, to re-platform to, and having their new site built.
In many cases, merchants will stay with a platform for as long as possible in order to avoid the costs of replatforming. It can be hard to spend cold hard cash to replace a site that you perceive to be meeting your basic eCommerce needs. This may explain why ~100,000 Magento 1 websites remain active with less than a month to go before Adobe, the owners of the Magento brand, stop supporting the platform. It’s hard to find a Magento 1 merchant that wouldn’t migrate onto something newer if money were not an issue.
As users are prioritizing new site builds to replace their old Magento 1 sites, they aren’t all going to the same platform. At JetRails, we’ve been tracking the choices that our customers make. It’s important for us to understand if our clients were experiencing some sort of friction that we (or our partners) could help to alleviate for other users in the future.
A majority of our users have consistently chosen to migrate to Magento 2, and those that haven’t, have mainly sought other open source solutions. That’s not to say that our sampling is indicative of what all Magento 1 users are choosing – we mainly work with mid-market and enterprise organizations who have solid hosting and work with great web development teams – but we have found a pattern in why they’re sticking with open-source eCommerce solutions. Here are some of the main themes that we come across:
With a SaaS solution, you don’t own your website. This is an overarching theme for why merchants prefer open source solutions. With a SaaS solution, you could be told tomorrow that the cost of your site is going up, that your SaaS provider will no longer support your category of products, or that the apps you rely on may no longer be connected to your site. You’re a renter, you can be evicted at any time, and you’re subject to the changes and whims of another company.
In eCommerce, your data can be just as important a commodity as your supply chains. Knowing who your customers are, what your top sellers are, and what your sales volume looks like is information that’s coveted, and sometimes abused in the industry. Many businesses prefer to own and store their data in their own web hosting accounts, rather than relinquish the lifeblood of their business to big tech companies.
Customization & Integration Opportunities
With an open source platform, like Magento 2, you can build custom extensions and debug any code conflicts so that extensions can work together.
With SaaS solutions, you can’t install extensions – you have to run apps. Apps must be hosted separately leading to a variety of issues and challenges, such as:
- Large numbers of API calls
- Ongoing expenses from App publishers
- Inability to customize apps to meet your needs
- Inability to debug code conflicts between apps
- Greater expense to build and maintain custom apps rather than custom extensions
- Reliance on the scalability of 3rd party app hosting
- Reliance on the security of 3rd party app hosting
- Providing access to your eCommerce data to 3rd party app publishers
- Risks of App developers going out of business or changing their pricing or terms
Extensions, plugins, and modules for open source platforms typically take the opposite approach. You purchase the code or access it for free, and you can edit, install, and run the code at your discretion.
Fewer “Penalties” for growing
With SaaS solutions, you often pay fees that are tied to your sales or revenue. In essence, the software publisher becomes your silent business partner. That’s not to say that your growth doesn’t require some extra resources on their part, but this can get out of hand. This is equally true when you’re simultaneously paying app developers in the same way, and paying credit card processing fees to your SaaS provider as well.
More predictable costs
To believe that you can perfectly predict your expenses as an eCommerce business would show hubris and a lack of understanding. In eCommerce, things change. There are evolving standards and requirements that come into play in order to conduct “business as usual.” Through the years, businesses have added a focus on mobile visitors from both a speed and a design perspective. In more recent years, there have also been more privacy standards to contend with, like the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR).
Whether it’s changing security standards, sales tax regulations, payment gateway features, user interfaces, or other aspects of your site, change is constant. However, with an open source website, your expenses are based on your needs and goals, and you can shop vendors to find what you need. With SaaS, you may come to renew your SaaS license and find out that prices have increased significantly. Similarly, if you want or need a solution, you may find that you have to pay for an enhanced package – you can’t simply add what you need when you need it.
More baskets for all of those eggs
If you’re unhappy with the loading speed you’re getting from your web host, you can switch hosts, at least if you have an open-source site. Similarly, if your eCommerce platform doesn’t have a particular feature that you need, you get a plugin or extension.
Almost all SaaS eCommerce solutions are multi-tenant, so to provide you with a solution, it would have to be rolled out for ALL users on the platform. If you’re having a performance issue or unhappy with a missing or under-performing feature set, you’re out of luck. All of your eggs are stuck in one basket, or in other words, your hands are tied.
While apps may be able to make up for some deficiencies, apps are limited to what the SaaS solution gives access to, which can be a major point of failure. Apps also add more monthly service fees and vendors to manage and rely on. These aren’t pieces of code installed on your site. These are 3rd parties that you integrate through APIs. As we touched on, relying on sometimes dozens of app providers can lead to a lot of hidden costs and risks.
Open source website owners can focus on giving their customers outstanding shopping experiences, while SaaS site owners may be stuck focusing on what they can do within the limits set by their platform.
All in all, what platform you use is a personal choice. Whenever possible, it’s best to speak with experts that work with both SaaS and Open Source platforms and go through a thorough assessment to see which platform will best suit your short-term and long-term goals. However, merchants have consistently shared with us that the reasons that they chose Magento 1 continue to hold true, which is why Magento 2 has been their top choice for the next iteration of the eCommerce stores.
What to Do Next
If you’re still on Magento 1 for the time being, check out these helpful tips to ensure you keep your webstore secure.
About the Author
Robert Rand is the Director of Partnerships at JetRails, a mission-critical eCommerce hosting service. Robert has over a decade of experience in helping merchants benefit from sound eCommerce and digital marketing strategies, assisting organizations of all types and sizes to grow and succeed via digital commerce. Robert is a frequent author and thought contributor in the eCommerce industry, and hosts The JetRails Podcast.