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Magento Open Source vs Commerce: Similarities, Differences, and Our Recommendations

 

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You know Magento is the right platform for you, but which version should you choose for your site?

Magento is a powerful platform, but there is a lot of confusion around the different versions available to eCommerce stores. “Should my site use Magento Commerce or Open Source?” “Should I host my Magento store on-premises or in the cloud?” “My site is currently on Open Source, do I need to upgrade to Commerce?”

As a Magento Solutions Partner, I’ve walked many eCommerce merchants through the options on Magento Open Source vs Commerce and can do the same for you.

This resource is designed to demystify your options by breaking down the differences and providing general recommendations based on the size and focus of your eCommerce store.

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Ben Chafetz

CHIEF EXECUTIVE OFFICER

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Recommendations

We’ll start off with laying out some general recommendations for choosing between Magento Open Source or Commerce based on eCommerce store type. The below information is intended to help guide you in making this decision, while bearing in mind that every business is unique and varies in customers, catalog, orders and of course, custom functionality.

Small eCommerce Start-up– we recommend Magento Open Source for a small start up as it provides a solid eCommerce platform for a business with limited funds. It’s important to note that the main consideration for choosing Open Source over Commerce would be just that- immediate funds. The free version of Magento will give you a financially sound starting point for your new eCommerce business.  But additional customizations or services that you may need or want down the line will cost more, and as your business grows you may find that it will outgrow Open Source. 

Single-product eCommerce Store– we also recommend Magento Open Source for a single-product eCommerce store. If your business consists of selling one or just a few products that offer little to no customization options, then Open Source will likely serve your needs. The main point here is that this business model is simple and straightforward- all you really need is an online store to sell your goods.  

SMB & Enterprise eCommerce Store– our overall recommendation for SMB and Enterprise stores is to go with Magento Commerce. It will give you access to advanced features that will better automate, streamline and scale your business. That’s not to say that Open Source cannot do the same, but it would require heavy custom coding and a myriad of extensions to elevate an Open Source store to the level needed for a larger business.  See features section below for more details. 

B2B eCommerce Store- we recommend Magento Commerce for any B2B store as Commerce comes loaded with B2B functionality that Open Source does not offer. 

Multiple eCommerce Sites- if your business is hosting multiple URL’s, then we highly recommend Magento Commerce. With Commerce you are able to simplify the management of multiple stores with one unified backend. Something that you will not be able to do with Open Source.

Complex Business Structure- if your business consists of complicated systems (e.g. shipping rules, retail store integration, BOPIS), multiple warehouses, or any number of complex models, we recommend Commerce as it can integrate seamlessly with existing infrastructures.

Definitions

In 2017, Magento rebranded many of its products creating some confusion. Here is the definitive list of Magento eCommerce platform names and the purpose of each: 

What is Magento Open Source? – Originally Magento Community Edition or CE. 

Magento Open Source, formerly known as Community Edition, is free for anyone to download and use to build an online store. That sounds great, however, it does mean you’re putting in a lot of legwork on your end to get things up and running, which means it’s going to be far from free when you’re all said and done.

What is Magento Commerce? – Previously known as Magento Enterprise Edition (EE)

Magento Commerce is the paid version of Magento that allows for many more advanced features, more customization opportunities, and includes updates and support from Adobe, who owns Magento. 

What is Magento Commerce On-Premise? – This is Magento Commerce that is managed and hosted internally. As an online merchant, you would pay a fee for the Magento Commerce license and the rest will be up to you. This includes additional costs for hosting, development, and site security.  

What is Magento Commerce Cloud? Magento Commerce Cloud offers the option for merchants to purchase a Magento Commerce license along with hosting services. You will not be responsible for hosting your own site.

Features and Functionality Comparisons

Magento Open Source and Magento Commerce share many features. Here’s a list of the features that are available to you for both Open Source and Commerce:

  • Integrated checkout, payment, and shipping- multiple payment sources are available for greater flexibility.
  • Instant purchase- gives returning customers a faster checkout experience by automatically inputting personal information that is saved in their account.
  • Full-page caching- quickly displays category, product, and CMS pages. This improves response time and reduces the load on the server.
  • Global selling- allows for transactions from multiple countries and currencies as well as provides access to international shipping providers.
  • Catalog management- manages your content across simple, configurable, bundled, and customer-personalized products.
  • Extended functionality from the app marketplace- access to thousands of extensions that will enhance the capability of your store.
  • Site search (available with Open Source 2.3)- Elasticsearch delivers quality search results to help increase conversion rates. 
  • Marketing and promotion tools- basic SEO boosting functions are included such as meta descriptions, tags, and custom URL’s.
  • Customer accounts- provides customers with the ability to create either a personal or company account. Customers with accounts can checkout quicker and access order information.
  • Advanced reporting- generates multiple analytical reports based on your store’s data. Reports are delivered and accessible via a personalized dashboard.
  • Page Builder (formerly Bluefoot CMS)- allows you to create pages in minutes without a single line of code. Add new products, content or catalog pages and edit existing pages with a simple drag-and-drop interface. Page builders WYSIWYG editor gives you the ability to see the edits/additions in real-time. (available for Open Source users with the Magento 2.4.3 edition)
  • Code Base: Support technology stacks include:
    • Web servers
    • PHP
    • Varnish 6.x
    • MySQL 5.6, 5.7
    • RabbitMQ
    • Redis

Magento Open Source and Commerce Functionality Differences

The features listed above are available for both Open Source and Commerce. If you’re wondering what you get with Magento Commerce that you miss out on with Magento Open Source, here is a list of those features:

  • B2B features- Commerce comes with a powerful, native B2B suite with a deep stack of features including:
    • Shared catalogs
    • Company credit
    • Company accounts
    • Quick orders by SKU or product name
    • Payment on account
    • Quoting
    • Credit lines
    • Requisition lists
    • Customer-specific pricing and catalogs
    • Customer-specific purchasing limits and thresholds
  • Content staging, preview, and scheduling- Easily create, preview, and schedule content and promotional updates without involving IT. Updates are automatically published and removed at scheduled times, so you can “set it, and forget it.” You can view your site, with all future content updates in place, in real-time, all the way through checkout to confirm all promotions are working as expected. It’s like browsing your website exactly as it would appear and function at a future date. For example, you know you’re going to have a Christmas Sale with a custom homepage and banners. You can create it, schedule it and browse the site in May, EXACTLY as it will appear when your promotion is launched.
  • Visual merchandising- allows you to sort your products visually. Just drag and drop your products exactly how you want them to appear on the page. Products are displayed in Visual Merchandiser exactly how your customers see them on the front end. What you see, is what the customer sees.
  • Customer loyalty tools:
    • Rewards points
    • Gift registry
    • Multiple wishlists
    • Store credit
    • Private sales and events
    • Order archives
  • Advanced marketing tools:
    • Advanced segmentation for personalized shopping experiences
    • Abandoned cart emails
    • Customer attributes and segments
    • Promotions (banners, related product rules)
    • Personalized product recommendations using AI to marry customer behavior with catalog data.
  • Inventory- manage multiple warehouses and define rules for fulfilling orders from each location.
  • Return merchandise authorization (RMA)- customers can request to return any order for a full refund or exchange.
  • Multiple stores– manage multiples sites from one admin.
  • Business intelligence tools- allows your team to easily access data from multiple sources and pull them together into comprehensive reports that lead to new marketing insights.
  • Database clustering- you can “split” each of your major databases into separate entities. This means you could have separate databases for every different part of your website, including:
    • Checkout 
    • Product information
    • Blogging and content hosting
    • Customer logins

This allows you to optimize each database for speed and update them or maintain them separately, leading to better overall scalability and ease-of-administration.

  • Magento support- gives you 24/7 access to Magento customer service, and your site is guaranteed to be up and running 99.99% of the time. You get your own Technical Account Manager who you can contact if you have any issues.

But even more important to consider- Magento patches core bugs found on Commerce quickly and constantly. Open Source is freeware, so core bugs are not patched ASAP. Ask yourself: do you want to run your business on unsupported freeware? Who will fix core bugs?

Hosting Your Magento Store- Commerce Cloud or On-Premise

Part of the process in picking which Magento version to go with is then deciding on hosting.

Below we lay out the various hosting options available and our recommendations.

Magento Commerce Hosting Options 

  • Magento Commerce Cloud (recommended) – is a Magento Commerce license that includes Magento’s PaSS (platform as a service). Your site will be hosted on a cloud environment that is created and maintained by Magento.
  • Magento Commerce On-Premise– is a Magento Commerce license that does not include hosting, CDN, and New Relic monitoring. You have two options for hosting your Commerce site:
    • In-house– your company will manage all hosting infrastructure and administration internally.
    • Managed hosting– hosting that is provided by a third-party service. There are many hosting companies, we recommend Jetrails, Lexiconn, and Nexcess.

Magento Open Source Hosting Options

  • In-house– your company will manage all hosting infrastructure and administration internally.
  • Managed hostinghosting that is provided by a third-party service. There are many hosting companies, we recommend Jetrails, Lexiconn, and Nexcess.

Pros of Magento Commerce Cloud (for Magento Commerce Stores Only)

  • The deployment and development process of Cloud requires that you follow their procedural guidelines, which prevent modifying the core. It ensures that all extensions and modifications are done in the proper extension layer. This protects you from bad developers wandering into somewhere they shouldn’t be and causing serious damage to your site- protection you won’t have with on-premise hosting.
  • Content delivery network for faster page loading- Fastly CDN helps speed up overall page loading time, and also provides powerful DDoS protection. If a DDoS attack is detected, a CDN like Fastly can automatically redistribute traffic to prevent your main server from going down.
  • Performance monitoring tools- New Relic comes with Cloud and is a must-have for your site. It provides tools for monitoring the performance of your webpages, ensuring you can always offer a speedy and responsive shopping experience to your customers. 
  • Enhanced security- Commerce Cloud uses the latest security best practices to protect your data and information. Each customer has a separate, isolated server environment, and the core Magento Commerce application is regularly tested to check for security issues & vulnerabilities.
  • PCI compliance- with Commerce Cloud, your site will run on encrypted, powerful enterprise-grade servers, and be optimized for Magento – without requiring you to do the legwork of setting up a PCI-compliant database or exposing yourself to legal risks due to accidental noncompliance or data theft.

You can expect automatic PCI compliance with powerful, cloud-hosted servers. As well as advanced protection from hacks and DDoS (Distributed Denial of Service) attacks and the Fastly Web Application Firewall (WAF), which protects against common vectors like injection, HTTP protocol violations, and cross-site scripting.

  • Source control management (GIT)
  • Optimized cloud environment for Magento
  • Global availability
  • 99.99% cloud availability
  • Easy deployment
  • Comes with SystemWide Analysis Tool (SWAT) which monitors your site 24/7 and provides real-time reports and recommendations. 
  • Option to pay the license fee in monthly installments, as opposed to Commerce which requires one upfront fee

Cons of Magento Commerce Cloud (for Magento Commerce Stores Only)

  • The initial setup for Cloud requires rigor, and if you have not had previous experience with Cloud or are working with a developer who is having issues with this, it may seem overwhelming.  And if your developer is having difficulty with this, maybe it’s time to switch to a developer who knows Commerce Cloud inside and out (hint, hint).

Pros of Managed Hosting (for Open Source and Commerce Stores)

  • If you are someone who enjoys dealing with the details of managed hosting at a micro-level, managed hosting is the way to go.
  • Choose your preferred cloud hosting infrastructure – You can choose between a wide variety of backend cloud hosting providers, including AWS, as well as other third-party cloud partners. This provides you with more choice when selecting your preferred hosting provider.
  • Compare prices between providers – You can compare the prices offered by a variety of different cloud hosting companies 

Cons of Managed Hosting (for Open Source and Commerce Stores)

  • Scalability may be lacking – Magento Commerce can power stores of any size, and Magento Cloud Hosting has unlimited scalability, with a model that ensures you only pay for the resources and bandwidth you use.

If you choose a third-party managed hosting service, you may find that you run into limitations on store scalability, particularly if you run a very large and complex Magento store. And given the complexity and difficulty of migrating to a new hosting service, this can put you between a rock and a hard place.

  • Every provider offers different services – When comparing different managed hosting providers, you’ll find that each one offers different services. Some offer CDNs for free. Others charge for a CDN. Some may provide firewalls as part of their package, while others require you to handle network security on your own. Some managed hosting providers offer 24/7 support, while others may have more limited support options.

It may be difficult to find a managed hosting provider that offers the same features as Magento Cloud Hosting, and even if you do, you may find that you don’t get the same level of performance and reliability.

  • Optimization issues – Many managed hosting providers don’t just offer Magento hosting, but also servers for websites built on other platforms like WordPress, Drupal, and so on.

This means that, in many cases, your managed hosting provider is not offering the best possible performance for your Magento store. 

  • Managed hosting involves a third party. Generally speaking, it’s best practice to keep operations of your site in as few hands as possible. This ensures everything runs as it should and allows for quick and accurate troubleshooting.

Do I Need to Upgrade to Magento Commerce?

We’ve laid out the difference in features between Open Source and Commerce, as well as options for hosting. But you may be asking yourself- if I am currently on Open Source do I need to upgrade to Commerce?

The answer is largely dependent on the specifics of your store and business. It would be difficult to advise on this without a deep understanding of the particulars of your site. However, there are a couple of points to keep in mind:

  • If you are experiencing difficulties with site speed, performance, or functionalities, these issues will likely be resolved by upgrading to Commerce
  • The features included with Commerce are specifically designed to both increase your revenue growth and decrease your spending costs
  • Growth of your eCommerce business will be achieved quicker and easier on Commerce as opposed to Open Source
  • If you anticipate requiring more advanced functionalities in the future, it’s a good idea to upgrade now. It’s easier, faster, and less disruptive to prepare for future improvements rather than to wait until the need presents itself. 
  • if you’re at a point where your store requires multiple servers, Commerce is made just for that
  • And lastly, the total cost of Open Source tends to be higher than Commerce, as we explore further below

Pricing and Total Cost of Ownership (TCO)- Open Source vs. Commerce

  • Open Source: no license fee
  • Magento Commerce License: list price starts at $30,000+ for sites making 1 million per year, and then tiers up (there are always discounts to be had 🙂 

At this point, you may be wondering what the actual value difference is between Open Source and Commerce. At a glance, it probably seems like Open Source, being free, is the better investment for your company. In terms of immediate upfront costs, it can be the less costly option. But, the truth is, the TCO for Open Source will be higher than Commerce. In other words, Open Source will cost more as you develop the specifics of your site and as your website grows.

Open Source ends up requiring more hours of development and ongoing maintenance than Commerce. Because Open Source is lacking in features that come native with Commerce, it demands more backend customizing. And you also have to factor in hosting and 3rd party fees for Open Source which are included in a Commerce license.

Every eCommerce site comes with its own list of functionalities and needs. But alot of features that greatly enhance a site’s design, and basic usability as well as security, will cost more to add to an Open Source site.

We have seen this time and again with our past clients, current clients, and those we’ve rescued from other agencies. Open Source ends up costing 3X more than Commerce Cloud. 

Here’s a breakdown of additional costs you should expect with an Open Source site:

When you factor in hosting, CDN Fastly, New Relic, a metric analytics provider, and any 3rd party services (B2B, personalization) which would come native with Commerce, the cost of development and maintenance for your Open Source site will absolutely be higher than a Commerce Cloud site. It’s worth repeating- Open Source maintenance costs as much as 3X more than Commerce Cloud maintenance.

If you’re still unsure as to the difference in cost, I would be happy to give you a line-by-line breakdown for your site. We’ve done it hundreds of times already.

Summing It All Up

Magento Open Source and Magento Commerce are both great options for an eCommerce site. But thought should be put into which version is right for your business. You should consider the features and functionality’s offered as well as the total overall cost.

I hope the information provided above is helpful. If you would like to further discuss which Magento version is best for your store, please feel free to contact me.

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