As the number one ecommerce platform in the world, Magento offers a paid eCommerce platform named Commerce, and a free version named Open Source, but which is best for who?
With over $155 billion in gross merchandise volume transacted on the platform annually, Magento has grown into the number one ecommerce platform in the world. It’s flexible, open source and agile solution, has boosted the online sales for thousands of online Merchants.
Since its inception, Magento has offered a free and a paid version of its platform. With the release of their next generation Magento 2.0 version in 2015, these versions were re-branded as Magento 2 Open Source (previously Community) and Magento 2 Commerce (previously Enterprise & Cloud). With Magento 1’s end of life announced for 2020 and Adobes $1.68bn acquisition of Magento^, many merchants are looking to make the switch to Magento 2, but the question is which version is most suitable for you?
Magento 2 Open Source
Magento 2 Open Source, is an open source ecommerce platform which provides a free comprehensive solution for online retailers unmatched by any other free solution. Developers can implement core files and extend functionality which makes the platform highly customisable and flexible to meet merchants needs. There is an extensive marketplace for modules to create extra functionality as and when you need it.
Magento 2 Commerce
Magento 2 Commerce comes in two versions, on-premise or cloud. Unlike Open Source, it isn’t free but has more features and functionality. Designed for large businesses which require technical support. The pricing for Commerce is tiered depending on your ecommerce business’ revenue (pricing outlined later in the article). But does investing in Commerce bring in enough benefits to justify the price tag, or is Open Source enough to meet your business and consumer needs?
Key selling points
Magento 2 Open Source is a stand-alone feature-rich solution with a vast community of developers that all have access to Magento Marketplace, meaning you can get extensions to extend your store with features you want which are not out of the box.
The great selling point of Magento is its inherent flexibility as a platform, but its comprehensive list of out the box features means you can cost-effectively get your site up and running quickly.
The aim behind Open Source is to meet the basic needs of ecommerce merchants, both Open Source and Commerce users can take advantage of Magento 2’s improved capabilities including, but not limited to the ability to:
- Have multiple websites, ecommerce stores and store views on one installation
- Create complex products with multiple options, swatches and bundles as well as structuring your catalog with the use of categories.
- Support a variety of payment solutions such as PayPal, Braintree, Klarna and Amazon Pay
- Use a comprehensive order workflow to process and manage orders, invoices and shipments as well as issue offline credit memos.
- Configure tax, currency and language settings based on your store's locale and where your customer is ordering from.
- Leverage shopping tools for customer engagement such as promotions, product reviews, wish lists, recently viewed and related items.
Key features exclusive to Commerce
Magento 2 Commerce is much more than a license version of Magento 2 Open Source, it provides enterprise-level features right out of the box, including:
Improved marketing capabilities
- For marketers looking to create engaging customer-driven content, there are a plethora of features which help to create a targeted and personalised experience.
- Customer Segmentation and Personalisation allows you to dynamically display content and promotions to specific customers based on address, order history, gender, wish list and so on.
- You can also target registered and unregistered customers based on what products they’ve viewed or added to their basket. With the ability to add additional attributes to customer profiles, you can define segments based on your specific business needs.
- With automated emails, you can set up targeted rules to engage your customer including abandon cart.
- While private sales and events are a great way to leverage your existing customer base to generate new leads or offload surplus stock. With the ability to create time-limited sales, specific member sales and define invitations and events, increasing brand loyalty becomes so much simpler with Magento Commerce.
Improved admin experience
- Content Managers will also gain efficiency and control with the upgrade to Commerce. They get the simple yet effective ability to control your ecommerce store’s page hierarchy and have the ability to organise your content pages, add pagination, navigation and menus all from the admin.
- With Content Staging, it gives your team the ability to easily create, preview and schedule a wide range of content updates directly from the admin of your ecommerce store. You can use Content Staging to create a page that automatically changes throughout the year on schedule. Utilised alongside the Visual Merchandiser managing the content of your website is simple and effective.
- The useful Action Log also comes as standard in Commerce sites, so you can track the activity of administrators.
Improved user journey and experience
- Magento Commerce also comes with several inbuilt features which add significantly to the ease of your customer's user experience. With ElasticSearch, a powerful and highly scalable distributed search engine, and with dynamic rule-based product relations, finding the right product is so much easier.
- Multiple wish lists, Gift cards & Gift registry are all features which encourage customers to share your site and products.
Improved customer and order management
- Magento Order Management Archiving and RMA
- Reward Points & Loyalty Program
- Store credit
Improved analytics and reporting
- Improved Google Tools.
- Business intelligence is available for the pro version of Commerce and the reports and dashboards empower merchants to make data-driven decisions. Comprising 75 reports, email summaries, SQL and visual report builders, combining both Magento and Google analytics data.
Integrated B2B Functionality
- Magento Commerce Provides all the core capabilities needed to create a truly great B2B experience. From company account management with multiple buyers and self-service tools for tracking orders, quotes and credit to custom catalogs and pricing assigned to specific companies.
- Quick ordering for fast checkout with quick order forms, requisition lists and easy reordering as well as detail reporting to help analyse sales, customer and product data.
Magento 24/7 Support
- Customer support is a vital selling point of Magento Commerce, with 24/7 technical support with a real person.
- Dedicated account manager to help advise you how best to use Magento and direct you to resources to achieve your ecommerce goals.
Buying into the future with Adobe experience manager
- Adobe's acquisition of Magento in May of this year has been hailed as a move which closes the customer experience loop for Adobe and makes them a formidable competitor to Salesforce and Oracle.
- Short-term Magento is still a separate system from Adobe’s commerce framework, however, following Adobes track record of making smart acquisitions and integrating the technology into their own system it may not be long before we see some out the box integrations between Adobe Experience manager and Magento Commerce.
Who benefits from Magento 2 Commerce?
- Website administrators
- Marketing team
- Sales and customer support team
Is Magento 2 Commerce right for your business?
Every business will have its own unique set of requirements and wishlist, and when considering what functionality you will need it’s important to consider the next 5 years:
- What’s your turnover?
- Who do you sell to?
- How large is your web team?
- How ambitious are your growth plans?
How much does Magento 2 Commerce cost?
For ecommerce businesses turning over less than $1m online, the annual licence fee is $22K* increasing to $32K* for up to $5m turnover, and $49K* for up to $10m.
Magento 2 Cloud Pro costs $41K**, $55K** or $87K** respectively.
* One-off on-boarding fee of $3000 USD is added to the total cost of the package
** One-off on-boarding fee of $6500 USD is added to the total cost of the package
Who is Magento 2 Open Source best for?
The Open Source edition is probably the best solutions for a startup or a developing business as they can easily set up an ecommerce website and manage it with minimal costs.
Although Open Source does not have all the functionality available in Commerce you do have access to the Magento Marketplace which enables you to purchase additional Magento 2 extensions to further the functionality of your website.
Despite this Open Source isn’t as scalable operationally as Commerce, and extensions are bolted on to the outside instead of being integrated as core functionality, which potentially could cause issues.
Who is Magento 2 Commerce best for?
Magento Commerce is the far more robust and scalable of the two, as well as being 100% open for customisation. It is more adapted for high demands from a traffic and revenue perspective, so is a better fit for companies of this nature.
Those existing ecommerce websites who are financially capable of paying the annual license fees should consider Commerce against any existing free ecommerce platforms due to the many extra benefits and support you will receive.
Those also with a strong growth plan for the next 5 years who want a scalable platform that provides advanced functionality, customisation and 24/7 technical support should delve deeper into how it can support and boost such growth.
The extra investment on the higher specification platform can also be outweighed by a reduction in maintenance costs, as often less time is required for routine maintenance of the platform.
Interested or invested in Magento yourself?
Are you looking to expand your business and projected growth by investing in a Magento ecommerce site? Or are you currently on Magento 1 and looking to migrate? If so, get in contact with us today and our team of experienced Magento ecommerce specialists can help advise you on what the best solution for your business is. Whatever edition of Magento 2 you opt for our hosted support and maintenance service is available for all clients.