By now, most Magento 1 merchants out there will be aware of the platform’s upcoming end-of-life. Many may even already be in the process of undergoing a replatform to Magento 2.

But for those yet to take the leap, is it worth taking a step back and assessing the alternatives and considering a hosted ecommerce platform? 

Magento 1’s end-of-life has been in the pipeline for a while now, and even though Magento recently set back the eventual end-of-life date from November 2018, most merchants will eventually have to update their store.

After the end-of-life date, Magento will release no further security patches for the platform, meaning there’s no guarantee Magento 1 will remain secure and stable. Magento 1 merchants will have to replatform to either Magento 2, or replatform to another ecommerce platform altogether. Risking staying on an unsupported Magento 1 is almost certainly not a good idea given the security risks this poses for companies and consumers.

While opting to switch to Magento 2 may seem like the obvious option, this still involves a full replatforming project rather than just a simple upgrade. This is where hosted ecommerce comes in as a possible alternative. 

To improve your own skills in this area, check out Econsultancy's range of ecommerce training courses.

So why hosted ecommerce?

A hosted ecommerce platform differs from self-hosted platforms like Magento in that everything from hosting to security updates are taken care of by the platform, and is usually bundled together in a monthly subscription package. 

Hosted ecommerce platforms have developed in leaps and bounds over recent years which has prompted a significant increase in their adoption amongst growing online brands, with platforms like Shopify, Salesforce Commerce Cloud (formerly Demandware) and BigCommerce growing their market share.

ecom market share

Ecommerce technology usage statistics (Source: BuiltWith) 

So why would you choose hosted ecommerce over Magento?

Automatic Updates

Merchants on self-hosted platforms may be familiar with the risks that accompany updates and patches. With a hosted platform, all updates occur automatically and are applied by the platform, often simultaneously to all stores.

A hosted platform means there’s significantly lower risk of your store’s functionality breaking with each update.

Scalability

The advantage of a monthly subscription package is that scaling your store up as you grow is usually as simple as upgrading your package. Hosted platforms will also automatically scale up your hosting to deal with demand, removing worries over coping with spikes. 

Flash sales and key seasonal events like Black Friday are a key part of today’s online retailing environment, but this can place pressure and expense on IT and hosting teams to ensure sites remain available during such high periods of demand.  

Hosted ecommerce can take away this burden, allowing brands to focus more on sales and marketing. Shopify, for example, handles the huge traffic spikes of reality star Kylie Jenner’s cosmetics brand without a problem.

Scaling up your store used to be a complex task, but a hosted platform puts advanced features and capabilities just a click away.

Security

Security is one of the biggest concerns for every ecommerce store owner. A data breach is disastrous from both a legal and brand reputation perspective. Just as hosted platforms take care of hosting, they also take care of a high proportion of security considerations. 

A hosted ecommerce package usually includes an SSL certificate and is usually level-1 PCI DSS compliant, taking any worries about security out of your hands. You don’t need to worry about the security of your customers’ card data with hosted ecommerce.

Not only that, but the previously mentioned automatic updates mean every store stays secure, with the latest patches applied as soon as they’ve been developed. 

Reliability

Magento 2 is a new platform. While new platforms do make improvements in reliability and stability as they become more popular, there is a period of time before they’re fully stable. Existing hosted platforms have the advantage of having been established for many years already.

Popular hosted platforms are now tried, tested and more than capable of dealing with stresses like demand spikes.

Access to the latest features

Really want to add a cutting edge feature like Apple Pay to your store? You’ll find that hosted ecommerce platforms make these kind of features available to every single one of their merchants very quickly.

While implementing the latest features can be complicated and expensive on a platform like Magento, with a hosted ecommerce platform you could find access to the latest technologies much more readily accessible.  

Assessing the options

So if you’re seriously considering a hosted ecommerce platform as an alternative to your Magento replatform, what options are out there?

Since Magento 1 originally launched in 2008, hosted platforms have come from nothing to being some of the most popular choices among ecommerce businesses both large and small. There are plenty of hosted ecommerce providers available, but here are three of the most popular. 

shopify

Shopify is one of the market leaders when it comes to hosted ecommerce, with 35% of the market share. The platform powers over 500,000 businesses worldwide, and has gone from being the go-to option for small businesses to the powerhouse platform of choice for major brands from Tesla to Kylie Jenner. 

A recent survey of merchants by Fuel showed that 35% of the highest performing merchants used Shopify, and rapid innovation has made it a powerful choice for merchants large and small. 

Shopify subscriptions run from $29 to $299 per month depending on your need for advanced features, with unlimited products and storage provided on every package. For high growth stores, the enterprise level option, Shopify Plus, is also gaining a lot of momentum, attracting big brands and celebrities like Red Bull and Adele. 

Pros of Shopify

One of Shopify’s key advantages is its app ecosystem. Just as Magento stores can be enhanced with extensions, a Shopify store can add extra functionality through apps. The difference is that every app in the Shopify app store has been checked and approved by Shopify, meaning it should work seamlessly with any site. 

Shopify makes adding everything from a loyalty scheme to an integrated Instagram feed simple.

Another virtue of Shopify is its user interface. This simple interface is part of the reason Shopify was originally so popular with small businesses, but it still retains the same ease of use for larger and enterprise level merchants as well. 

Shopify’s huge user base also means there’s a vast community of merchants and developers ready to tackle any issues you may have, all backed up by Shopify’s own 24/7 support team.

Finally, Shopify offers great flexibility when it comes to design, offering a wide selection of high quality themes for lower budgets, or the option to design a custom store from scratch for those willing to use the services of a developer. 

Cons of Shopify

As of writing, Shopify’s shipping rate customisation and delivery options can be limited, unless you’re on one of its higher packages with the real-time shipping calculator functionality. 

While the ability to create discounts and offers is available to every merchant out of the box, the flexibility of the discounts you can create can be limited. Merchants looking for the option to create more complex discounts, particularly automated discounting, will probably have to opt for an app or upgrade to Shopify Plus which provides much greater flexibility.

Shopify’s checkout process has limited levels of configuration, something that some brands may be averse to – but again, this is solved through the Shopify Plus option which offers a fully customised checkout experience. 

salesforce commerce cloud

Salesforce Commerce Cloud (formerly Demandware) has been a popular hosted ecommerce choice for years now. Big brands like LUSH and Adidas can be found here thanks to the platform’s scalability and proficiency in handling high volume stores across the globe.

Salesforce Commerce Cloud is targeted at high growth and high volume merchants, putting it in direct competition with Magento Enterprise as a viable hosted alternative.

Pros of Salesforce Commerce Cloud

Where Salesforce Commerce Cloud really comes into its own is speed to market and scalability on a global scale. This is not just a hosted solution, but one that enables retailers to actively trade through machine learning personalisation. The platform comes equipped with “Predictive Intelligence” and “Active Merchandising” features that focus on customer behaviour which creates highly targeted customer journeys. 

While other platforms like Shopify and BigCommerce can also offer these features through integrations, Salesforce Commerce Cloud offers them in one packaged solution.

With eight to 10 seamless platform releases a year, Salesforce Commerce Cloud constantly enhances the solution on not just performance, but on customer behaviour and conversion.

Salesforce Commerce Cloud also makes for a tested and reliable platform when it comes to dealing with high volumes of traffic. Demandware has proven to be scalable and sturdy over the years, and you’ll also find 24/7 support from their dedicated service team.

Cons of Salesforce Commerce Cloud

As mentioned, Salesforce Commerce Cloud is focused on scaling businesses rapidly to a global scale, so smaller merchants in their early stages of ecommerce would not be a suitable fit. 

Salesforce Commerce Cloud also has a much smaller community of developers than Shopify has, for example, meaning finding a developer may be more difficult.  

bigcommerce logo

Like Shopify, BigCommerce has also come into its own over recent years. It now supports stores as diverse as Avery Dennison and the Carolina Panthers.

BigCommerce has processed over $8bn in revenue from its merchants, making it a well tested and stable hosted platform. BigCommerce has become a popular choice for brands, and a great alternative to Shopify. 

Similar to Shopify’s pricing, a BigCommerce store will cost between $29.95 to $249.99 per month, with an enterprise level tier also available. 

Pros of BigCommerce

BigCommerce offers some more great functionality out of the box. Features like built-in real-time shipping rates and basic email marketing are available as standard for BigCommerce merchants, something that may be attractive to smaller businesses. 

It also allows a greater level of customisation without having to resort to using apps. Something that the more technically capable store owner may prefer. While Shopify tends to rely more on apps to enhance the functionality of stores, BigCommerce focuses slightly more on customising the core storefront.

BigCommerce also offers automatic inventory syncing between your store and marketplaces like Amazon and eBay, making selling across multiple locations a little easier for BigCommerce merchants out of the box.

Like Shopify, BigCommerce also comes equipped with an app store that should give store owners every opportunity to extend their store with everything from advanced inventory management to upselling tools.

Cons of BigCommerce

While there may be greater customisation options, BigCommerce’s smaller app store means there are fewer integration options and fewer possibilities for extending your store.

You’ll also find a smaller selection of themes and a few less options when it comes to design. BigCommerce doesn’t quite have the same high quality themes available for those who don’t have the budget to design a totally custom store.

Enterprise Scalability

As I’ve mentioned above, Salesforce Commerce Cloud is an enterprise-level platform for retailers generating significant revenue, working with brands such as Bonmarche. As such it’s well placed to meet the demands of brands that are scaling their business for growth. 

Beyond their standard packages, both Shopify and BigCommerce also offer enterprise level solutions for larger stores, and unlike switching to Magento Enterprise, upgrading to a hosted enterprise platform is as simple as the click of a button and perhaps a 10-minute waiting time.

Moving up to Shopify Plus or BigCommerce Enterprise also gives store owners access to even greater customisation, as well as enterprise level security and hosting. In the case of Shopify, you’ll also be provided with a dedicated account manager tasked with advising and helping to grow your business.

A hosted platform like Shopify or BigCommerce makes scaling a growing ecommerce business much simpler, and one excellent illustration of this is the story of Gymshark…

The Gymshark Story

Gymshark is a £26m ecommerce business that operates on Shopify Plus. The business started out on Shopify’s standard platform, but with no enterprise level variant at the time, it outgrew the platform and decided to move to Magento. This site took 6-8 months and hundreds of thousands of dollars to build, leaving Gymshark with a finished Magento site the business had already outgrown. 

gymshark 

The worst though, was yet to come. Gymshark’s new Magento store failed when the pressure was really on. The site was down for eight hours on Black Friday 2015, costing the company over £100,000 and significant reputational damage. 

Ten months after moving to Magento, Gymshark switched back to Shopify.

Gymshark thought what many fast growing merchants think, that a flexible self hosted platform is the best option. In reality, a hosted platform ended up being the more scalable, flexible and stable choice for this particular brand.

When should you act?

Whether you prefer the benefits of choosing a hosted ecommerce platform over a Magento 2 replatform or not, the time to act is undoubtedly now.

The closer we get towards Magento 1’s end-of-life, the more difficult it will become to find a great developer for your replatforming project – their calendars will fill up quickly. Avoiding key trading periods like Christmas is also an important consideration if you’re to make the switch away from Magento 1. 

Now that there’s no definitive date for Magento 1’s end-of-life, waiting will only lead to uncertainty so it’s much better to make a decision now, whatever that decision may be.

Of course, switching to Magento 2 will be the right option for some businesses, but certainly not for all. Take time to look at the alternatives out there and see if one may be a better fit for your ecommerce business.

Hosted platforms like Shopify, Salesforce Commerce Cloud and BigCommerce are powerful, reliable and modern. Choosing hosted ecommerce could make a real difference, both in terms of cost but also in terms of enabling merchants to focus on sales and growth, rather than IT and infrastructure.

For more on this topic, see:

Dan Conboy

Published 28 September, 2017 by Dan Conboy

Dan Conboy is the Managing Director of Statement, a Shopify Plus eCommerce agency with offices across the North of England. You can follow Dan on Twitter, LinkedIn and Instagram

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Comments (5)

Pete Austin

Pete Austin, CINO at Fresh Relevance

If you're thinking about changing platform and have customers in the EU, then it's high time to make sure about GDPR support.

The GDPR is not just about data protection, but all the new Individual rights such as "the right to restrict processing", "the right to rectification" and "the right to data portability", which could be difficult to retro-fit to a platform unless there's support. (We implemented these rights a full year in advance in the Fresh Relevance marketing system btw)
https://ico.org.uk/for-organisations/data-protection-reform/overview-of-the-gdpr/individuals-rights/

So whichever platform you prefer, I suggest you go to their home page or blog and search for "GDPR" to make sure it's supported. Not to pick on Shopify - I only chose them because their logo is first in the article, but seems they need to put up some info ASAP...
https://help.shopify.com/search?stq=GDPR&stp=1

BYW checking on how ecommerce platforms support the GDPR would make an excellent follow-up article

about 1 month ago

Tamara Warren

Tamara Warren, Co-founder at ALTA Digital GmbH

You've missed one of the newer interesting hosted ecommerce platforms - Zoey. I discovered it while assessing what the best B2C CMS platform for a UK retail client would be, and I think they use Magento open source. I tested both Zoey and Shopify and found Zoey to be so much easier to use than Shopify. We went with Zoey and the client has been very happy. I definitely think it's one to watch. https://www.zoey.com

about 1 month ago

Kevin Murray

Kevin Murray, CTO at Greenlight

Good overview but it is also worth looking at what the independent analysts say. Both Forrester and Gartner see Salesforce Commerce Cloud as truly enterprise grade with some of the platforms here not making the list as they were considered not an appropriate scale yet or “niche players”. The list of pros for Salesforce Commerce Cloud is so much bigger. There are many other factors that need to be considered such as diversity in product and category sets, and true total cost of ownership. Also, a major consideration has to be given to support for multi-channel and providing consistent experiences with physical store estates, POS and mobile apps.
 
While I think the Gymshark story about a failed Magento project is an interesting one, we all know that project failures are not necessarily down to the technology and can be a lot down to the project implementation (and I state this not being much of a Magneto fan).
 
Finally, I think there are other hosted cloud options, such as private hosted cloud, for platforms like SAP Hybris that make the feature comparison, hosting offering and total cost of ownership very compelling.

about 1 month ago

Alexander Levashov

Alexander Levashov, Director at Magenable

A good article overall, but while I may be a bit biased, because mainly work with Magento, I think that several important points are missed.

1. Magento 1.X End Of Life is postponed significantly, to at least 2020, so while retailers on Magento should think about new platform there is no rush in migration any more.
2. Magento now offers Magento 2 Cloud (rebranded Enterprise Edition) with hosting at AWS from $2K/month. Important to note that it is PaaS rather than SaaS like Shopify though. That means that you as a merchant has access to source code and can modify it. Magento Cloud (despite the name) is also still available to be hosted on own premises.
3. While SaaS solutions definitely provides number of benefits, there are more risks associated with them, not only lower flexibility. Such risks include higher level of lock-in, pricing that punishes success (more you earn through platform more you pay usually). For those who wonder to learn more I wrote an article comparing 2 the most popular paradigms in software open-source and SaaS in eCommerce context - https://magenable.com.au/magento-ecommerce/ecommerce-platform-selection-open-source-vs-cloud-saas-shopping-carts/

about 1 month ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Hi Dan,
Thanks for an interesting article.
Having worked on lots of replatforms, my advice to client teams is to think very carefully about what their commercial goals, critical business requirements and tech principles are before looking at platforms.
As you and others flag, the infrastructure, capability and cost model varies significantly, so if you know what you need as a business, it's much simpler to do a platform comparison.
If you start looking at platforms before doing this, it's like disappearing down the rabbit hole.
A good example is with hosted vs. on premise. Some IT teams still prefer direct management, accepting the added cost and responsibility. Others don't have the internal tech skill or don't want to pay an agency to provide the application support & maintenance, so a fully hosted cloud solution is preferable.
It's essential that client teams build out a 3-5 year total cost of ownership model to plot how capex and opex costs flow for each platform, as then you get a true cost picture and can evaluate based on what's a realistic budget. For example, with the PaaS solutions like Salesforce, there are different cost models depending on your sales targets and how you structure payments, so you've got to get into the detail. Sometime the 'best fit' platform isn't affordable, so you then need to weigh up pros and cons of an alternative by doing risk analysis.
Out of interest, which resources do you recommend for understanding Shopify + under the hood? So something that gets into the detail on its architecture and enterprise capability, not just a list of 'it can do this'.
Thanks
james

about 1 month ago

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