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Open Source eCommerce vs. SaaS eCommerce: Which is the Best Fit for your eCommerce business?

An eCommerce platform is the core piece of the puzzle when it comes to the success or failure of an online business. An eCommerce platform allows business owners to manage their products, sales, and other operations with little or no knowledge/experience of programming. This, in turn, helps them create a seamless shopping experience for the customers, leading to increased brand loyalty. 

With the increase in online shoppers- no thanks given to the pandemic- it is of utmost importance that your eCommerce store stands out from the rest of the competition in the market. In 2020, 2 billion+ consumers purchased goods or services online, and during the same year, e-retail sales surpassed 4.2+ trillion U.S. dollars worldwide (Source) . This trend of buying almost everything online will continue to persist even after things "go back to normal" after the pandemic. Therefore, this is the right time to consider launching your eCommerce store with a platform suitable to your business needs.

Choosing an eCommerce platform for your online business involves comparing their architecture, functionalities, price, scalability and many other features. This article will focus on two different software architectures- open source versus Software as a Service (SaaS) - to help you decide which type of solution better fits your business needs. 

Difference between SaaS eCommerce vs. Open Source eCommerce

difference-between-saas-eCommerce

First, let's start by understanding the meaning of SaaS eCommerce and Open Source eCommerce.

Software as a Service

  • This is a software licensing and delivery model in which the software is licensed on a subscription basis. 

  • SaaS software isn't bought or installed on individual computers. It is hosted and maintained on the cloud by a third party. This is also referred to as web-based or hosted software which is licensed out to merchants to use.

  • You may access these applications via web browsers and pay a monthly subscription rate depending on the level of service and number of users.

  • Since the eCommerce provider builds, hosts and maintains the software on their own servers, users are limited in their ability to edit or change the software's source code.

Open Source eCommerce

  • Open-source software is developed in a publicly collaborative way and can be downloaded from communities like GitHub

  • Open-source software allows its users to view, change, and distribute its source code for their own purpose.

  • Merchants have full access to the software's source code, and hence if there's functionality missing, your business can leverage coders to build it. 

Comparison of Open Source eCommerce and SaaS eCommerce

comparison-of-open-source-ecommerce-and-saas-ecommerce

Let's differentiate the two eCommerce platforms based on the following critical parameters:

Parameter Open Source eCommerce SaaS eCommerce
Go-to-Market Time Even though the open-source eCommerce platform is free to download, these platforms have a good amount of work and coding needed to get your eCommerce store up and running. Additional time needs to be invested in getting hosting, security, and theme building. SaaS platforms have user-friendly UIs and pre-built themes to help you set up your online store- with little to minimal coding knowledge. No additional time is invested in hosting and security.
Security / PCI Compliance Open source platforms leave PCI compliance to their users. Your business will have to maintain PCI compliance standards and stay updated with any patches or bug fixes for security firewalls. Additionally, they do not have a dedicated support team. In case of an issue or bug, your technical team would have to solve it by themselves. You may leverage the support from large communities of developers who use this platform for advice and assistance when needed. SaaS software providers will take care of security and PCI compliance so that your business never faces compliance or regulatory issues.
Customization The cost involved in setting up an Open Source eCommerce platform are:
  • Free eCommerce framework

  • Licensing fees

  • Hosting provider fees (increases with bandwidth requirements for increases in traffic volume)

  • Web developer or agency fees to build on a unique feature (if used)

  • Bug fixes, Security patches in software updates

  • Security and PCI compliance costs

  • Apps or extensions

  • Integration into other systems

The cost involved in setting up a SaaS eCommerce platform are:
  • Monthly subscription rate (ranging from $0 to $5,000 per month

  • Web developer or agency fees to build on a unique feature (if used)

  • Apps or extensions

  • Integration into other systems

Scalability and customization Open-source platforms exceed in customization and scalability. As mentioned above, your technical team can simply build the features needed. You can also adjust various aspects of your store (for example, the payment process) and make it more in sync to your specific audience. SaaS platforms' restricted access to the source code makes both customization and scalability a bit tricky. When looking for a specific feature, you will have to choose the one that best fits your needs.
Examples Magento, Open Cart Shopify, Squarespace

Advantages of SaaS eCommerce Platform

  • SaaS eCommerce platforms host and maintain thousands of sites. They can even offer businesses lower costs over time. The monthly subscription rate is also less as compared to the capital invested in licensing, hosting, maintaining and supporting the site yourself! 

  • SaaS ecommerce platforms will help you set up your online store in a matter of a few days. They provide smart and effective build-up based on innovative and unconventional functionalities.

  • Extensive app support is provided to extend functionalities like email marketing, cart abandonment, loyalty programs and more.

  • SaaS is always on the latest software version. As a business, you can immediately benefit from the new upgrades if you have a SaaS e-commerce solution.

  • SaaS upgrades and updates are done continuously and automatically, which means easier maintenance, saving your business time and money involved in this process. Additionally, your SaaS web store will always be up to date and protected against vulnerabilities like downtime, data loss, and cyber-attacks with relevant security measures and patches

  • SaaS-based eCommerce platforms provide expansion of data storage as per your business requirement. This is contrary to on-premise eCommerce platforms.

  • SaaS solutions are compatible across different devices and versions of operating systems.

  • SaaS also allows for the easy onboarding of new users and/ or products on the existing system, thereby facilitating easy integration. 

Which one to choose for your business?

Which-one-to-Choose

The clear winner here is the SaaS eCommerce platform with its range of benefits like low cost, easy setup and great support, which will help your business thrive and flourish. 

To sum up, a SaaS solution is "off-the-shelf," meaning the effort of developing the product is already in place, thereby reducing its cost significantly. This makes them an ideal choice for businesses without strong IT knowledge, who just want to start an eCommerce store as soon as possible and without all the associated fuss.

What's more? With a SaaS-based platform, there is no need for someone to physically be near the main server to access data and valuable information of the eCommerce Store. Since all the data is stored on a cloud database, access can be granted to anyone with the required credentials, from anywhere, anytime!

Looking for a leading development agency to help you drive success across the eCommerce domain? Biz4Group is one of the most trusted development companies when it comes to eCommerce. Get in touch with our experts to book a free consultation session today .


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