This will be the first blog post in a series of Magento related posts that will help inform and clarify our readers and customers about Magento solutions.
A question we get often from our current Shopify & Magento Open Source (formerly Magento Community Edition) clients is whether or not they should upgrade to Magento Commerce (formerly Magento Enterprise Edition) and what the price of this next tier software will cost them. The pricing model has changed over the years and with Adobe’s latest acquisition of Magento it seems to have changed once again.
The first item to note is that Magento Commerce & Magento Cloud are now bundled products, which means that if you’re interested in upgrading or moving over to Magento Commerce you will automatically receive Magento Cloud services as well. The great benefit of Magento Cloud services along with Magento Commerce is one source of accountability for the reliability of your website software. This solution is known as a PaaS (Platform as a Service) and differs from the SaaS (Software as a Service) that e-commerce providers like Shopify & BigCommerce offer. The main difference between PaaS and SaaS e-commerce software solutions is that the PaaS model offers access to the direct source code of the website, making it exceedingly more flexible and customizable as compared to SaaS model e-commerce services like Shopify. Magento actually attempted to enter the SaaS market back in 2011 when they launched their now defunct Magento Go product. This was launched as a direct competitor to Shopify and other similar platforms and was meant to be an all-in-one Magento hosted SaaS solution. The Magento Go product failed because those who were using Magento did not want a simple SaaS start-and-go solution like Shopify. The reason most merchants choose Magento is because of its complex capabilities and endlessly customizable user-interface and back-end capabilities. For this reason the Magento Go product was phased out in 2015 and Magento directed many of their Go users to switch to BigCommerce at that time.
PaaS vs SaaS Example
One great example of how PaaS and SaaS differ is in how Shopify handles the checkout process and how that same process can be handled using Magento Commerce. It doesn’t matter how large or extensively customized your Shopify store is, every single Shopify store goes through the same checkout process which you have probably seen before, it looks like this:
(screenshot taken from bulletproof.com 3-6-2019 3:38 pm EST)
Because Shopify does not allow access to their source code for the checkout process this same screen above is universal for all stores (including fonts, and styles) making the customization process very limited. This is just one example of the limits of using a SaaS e-commerce solution. With Magento Commerce and the Magento Cloud, although Magento is supporting the software, every single aspect of the website can be customized, which has many benefits for the store managers. Here are just some of the checkout process screens taken from prominent Magento stores:
(screenshot taken from HP.com 3-6-2019 4:24pm EST)
(screenshot taken from paulsmith.com 3-6-2019 4:25pm EST)
The ability to completely customize the checkout is just one of the many ways in which Magento differs from other SaaS solutions.
Magento Commerce Pricing & Magento Cloud Pricing
The old pricing was the same across the board for all merchants and was a simple yearly license cost. The new pricing is now a usage pricing model based on the following factors:
Online GMV + Average Order Value
Keep in mind as I stated earlier, Magento Commerce now comes bundled with Magento Cloud meaning that as long as you don’t have specific server requirements (such as HIPAA compliance for example), you won’t need to purchase an additional server to run Magento Commerce. With that said the pricing is all done now through the Magento sales team and will differ for every company. For companies with >$1 million a year in online revenue you can expect to pay an estimated amount of ~$24,000/year for the current Magento Commerce product and it will scale up from there, here’s some more price estimates (although actual pricing will depend on the Magento sales team and is always negotiable).
If you have any questions about the Magento series of products and how Lucid can help meet your goals contact our Magento Developer team today.
