Paul Rogers

eCommerce, Digital & Magento Consultant

February 26th

Reasons to use or upgrade to Magento 2.0

With more than 250,000 stores worldwideincluding B2C brands like Paul Smith and Nike AU, and B2B brands like Igepa and Zoetis and over $50 billion in gross merchandise transacted annually on the Community and Enterprise editions, Magento represents a very appealing proposition for merchants globally.

Now backed by Permira funds, Magento have expanded their cloud-based offerings to include in-store, retail associate and order management solutions, with the intention of increasing their presence at the enterprise-level of the market. Magento also has a huge global community of partners and developers behind them who regularly contribute their extension marketplace.

Magento is the world’s biggest ecommerce platform – but with the general release of Magento 2.0 late last year, there’s a lot more research to be done by prospective merchants – who now need to understand the different versions, as well as the platform itself. This piece is designed to give you more perspective around Magento 2.0, vs Magento 1.x and other platforms.

What Makes Magento Stand Out?

Magento definitely has great platform products, proven at every level of online retail. Both their free (Magento Community Edition) and paid (Magento Enterprise Edition) versions are enhanced by a huge library of extensions which provide cost-effective ways to enhance and expand Magento’s out of the box feature-set. Magento is also considerably cheaper than Demandware and Hybris (arguably its two biggest competitors in the agile yet enterprise-level space), as is working with Magento SI’s.

Magento’s biggest advantage and differentiator is definitely their global community. Over 60,000 members strong, they offer both development talent and support to Magento users. This community has lead Magento to where it is today, via contributing to the core code, answering questions, generally supporting merchants and building integrations and modules that help to reduce cost overheads.

Magento Community Edition vs Enterprise Edition

While both Magento Enterprise Edition and Community Edition have great out-of-the box features and both are supported by extensions, there are key differences aside from price. Magento Community Edition is open source, so developers and tech-savvy merchants have plenty of creative freedom, though they’ll need more technical knowledge to implement. While not open source, Magento Enterprise Edition has an open architecture, so it can also be customized, but it has more built-in enterprise-level features.

As an enterprise-level platform, Magento Enterprise Edition is geared towards handling more products, trade and generally being more scalable for enterprise-level merchants. Another important difference is support; Magento Enterprise Edition includes support with its subscription, while Community Edition relies on the community.

A few other key features include improved on-site search (solr-based), built-in visual merchandising, OOTB full page caching and optimised indexing. These are just a few examples of features that are only available in EE, there are lots of other benefits.

Why Upgrade to Magento 2.0

Last November, Magento released its next generation platform, Magento Enterprise Edition 2.0 and with it a more modern code base and modular architecture. If they upgrade to Magento 2.0, merchants on Community Edition and older versions of Enterprise Edition can expect performance improvements (including the ability to support more concurrent users and transactions), a built-in responsive theme and business improvements including a new and responsive admin interface, easier product onboarding and faster import/export capabilities. The modular architecture also makes it easier to integrate with existing systems and with extensions, as well as making it easier to migrate to new versions.

Although there’s an obvious risk with being an early adopter of Magento 2.0, there’s already a number of fairly large brands that have launched on the platform – including Graze.com, Belroy and Byredo. There are also plenty of others that haven’t been as well publicised.

Should I move to Magento 2.0?

To be honest, given the conversations I’ve had with agencies who have launched Magento 2.0 stores, it seems like it’s actually a lot more stable than people had anticipated. Although there’s still a huge amount of commonly used modules and integrations that haven’t yet been built for 2.0, there are also a lot that have (including MageWorx’s Magento SEO Suite, a number of Aheadworks modules, ShipperHQ, Yotpo and plenty of others).

Most of the merchants that I speak to have it in the back of their minds now (with the intention of launching within the next 6-18 months) and lots have already started. I’d also say that if you’re starting a Magento project now, you’re probably going to be best launching on the Magento 2.0 platform, rather than migrating later on, just purely because there’ll be a big cost overhead associated with this.

Magento Enterprise 2.0 vs Demandware

I’ve written a more in-depth comparison of these platforms, so I’ll summarise here. The main advantage of using Magento over Demandware is control and agility. Demandware has invested more in omnichannel and ease-of-use, primarily by managing hosting and upgrades. However, to do this, Demandware can’t offer merchants the complete control that Magento can. Demandware’s clients are limited in the features they can implement and they need to go through a layer of approvals to make site changes. Also, because Demandware doesn’t have an open architecture, it doesn’t have a library of extensions to customize with and fewer developers are available to support it.

This is the main reason why mid-level merchants tend to choose Magento over Demandware, along with the lower costs. A lot of larger merchants like the additional layer of security etc and that the technology is cloud-based, but it swings both ways. It’s clear that Magento is going after the enterprise-level merchants currently and lots are moving over, due to the agile nature of the platform.

That said, Demandware is a real growth platform with the bigger merchants and it powers some of the biggest retail sites in the world. Demandware is probably an easier sell at that level because it powers such large stores (such as Adidas, Asics, Kate Spade, House of Fraser and plenty more) and is known for its ability to scale.

Magento Enterprise 2.0 vs. Hybris

As I wrote in my guide, Hybris is also very proven at the enterprise-level and it’s also very good for for businesses who sell internationally. With some of the world’s largest brands using their platform, they also have a great reputation for scalability. Their weakness is in their reporting and difficulty to upgrade. Since Hybris doesn’t have open architecture, they only have a limited selection of extensions and they don’t have a community to support them.

Again Magento is definitely the more agile solution and the number of modules and integrations available makes a big difference. Magento is again likely to be more cost-effective too, as licensing and agencies are a lot more affordable.

Pricing

Despite the recent change in pricing structure (moving to tiered pricing based on turnover), Magento Enterprise is still likely to be a lot cheaper. I’ve got rough figures on the new pricing structure – but I don’t believe they’ve been officially announced yet (I’ll update when I’m told it’s official), but they appear to work out ‘relatively’ similar to an average site at each bracket (as in larger sites would pay a ‘similar’ amount because of the number of servers they use – it won’t be a HUGE increase). Magento are also apparently willing to be flexible with existing merchants.

Hybris has different types of licensing, starting from around $54,000 per year, but includes pricing options like pay-per-use, long-term licensing, and revenue share. Demandware charges fees based on the merchant’s sales, and the license can run between $200,000 and $700,000 a year, with an additional $250,000 to $600,000 a year for other services.

Magento as a Long-Term Solution

Magento is a great long-term solution for three main reasons: scalability, modular architecture and the robust community. Magento Enterprise Edition 2.0 has been architected with growth in mind and Magento has promised to consistently add improvements to their roadmap as new technologies intersect with retail. It’s modular, integration-friendly architecture, will also help merchants easily and quickly add and remove features as needed, and to customize as they see fit.

Finally, with such an involved and growing community, merchants will have many options for ongoing support, for years to come.

 

 

Paul is an experienced eCommerce Consultant, specialising in working with the Magento platform. Paul works with online retailers and product companies from all over the world and is focused mainly on helping merchants get more from the Magento platform and growing stores (customer acquisition, customer experience, strategy etc).

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