SaaS vs. Open Source: Which Is Right For Your eCommerce Business?

There are two major options when it comes to picking an eCommerce platform for your business: Software-as-a-Service (SaaS) and open source. SaaS platforms are also referred to as hosted platforms by some merchants. 

Examples of SaaS platforms include Zoey, Shopify, BigCommerce and Volusion. Examples of open source platforms include Adobe Commerce (formerly Magento), PrestaShop, Open Cart and Zen Cart. 

There are a few big differences (and lots of small ones) between each type of platform, but in general, SaaS platforms manage the technical side of running an eCommerce business for you and open source platforms do not. 

To help you make the best decision possible let’s look a little more closely at the major differences between these two types of platforms. 

What is SaaS?

SaaS is a type of solution that bundles a number of needed components for managing an online solution into one manageable option.

For instance, SaaS code is hosted by the platform, so web hosting is included in the cost of the subscription. Software updates and security fixes are managed by the solution, and are included in the cost of the subscription.

In return, you pay that monthly subscription fee, which includes a license to use the platform, hosting, software updates and security. Outage management is also managed by the SaaS provider, so you do not have to take action when an issue occurs; they will resolve it on your behalf.

What is Open Source?

Open source solutions allow you to download the code, usually free of charge (although there can be paid versions that incorporate additional capabilities).

Hosting is paid for separately as its own bill, managed by the company using that solution, or someone who works for them on their behalf to manage it.

While the Open Source solution may release software updates, it’s up to the business using them to deploy those software updates to their copy of the software, or use a third party to manage that for them.

SaaS vs. Open Source eCommerce Platforms

While both SaaS and Open Source eCommerce options can get you to the finish line, there are some definite differences in approach, and that can lead to other differences such as the expense of building and maintaining a site on that solution type.

So let’s dive deeper into how things differ between the two approaches.

Cost

One of the first things merchants notice about open source eCommerce platforms is that they’re free to download and start using. For a small business, this is extremely attractive, but price of the software doesn’t tell the whole story.

With open source eCommerce platforms, there are a lot of technical details to manage that require the specialized knowledge of a web developer. Unless you are one yourself, that means hiring a developer to build your site for you. You’ll also need to think about design. Most platforms will have a collection of free themes you can use, but depending on how popular the platform is, these free themes could be very outdated looking. As an alternative, you can buy themes from a marketplace like Theme Forest.

The downside to themes is that unless you customize the theme by modifying the underlying code, you’ll end up with an online store that looks like hundreds if not thousands of others. This is less than ideal in the highly competitive world of eCommerce where building a unique and memorable brand is key to your long-term success. So while they seem like a good way to save some money, themes can actually end up working against you. 

You can also opt for a completely custom design. Some developers also offer design services, but if you want a truly unique and professional design, you’re better off working with an experienced graphic designer. Once you settle on a final design, you can hire a developer to build it for you. 

The final big cost to consider is your monthly hosting cost. For some platforms like PrestaShop, you can get away with a cheaper hosting plan, but more robust platforms like Magento Community Edition are resource intensive and require specialized hosting plans that are more expensive.  

After all is said and done, it’s not uncommon for a merchant to spend $3,000 – $15,000 (more if you’re using Adobe Commerce) on the initial design and development of an eCommerce site using an open source platform. Add to that a hosting bill that’s anywhere from $20 up to thousands of dollars a month depending on how much traffic you’re expecting and an ongoing retainer contract for your developer to make any updates to your site, and you just went from free to very expensive and you haven’t even made your first sale yet. 

In general, SaaS eCommerce platforms take a different approach. For a monthly subscription fee, merchants end up with a fully functional eCommerce platform that tends to be less technically complex than an open source eCommerce platform. This allows non-technical merchants to do the ongoing management of the store themselves, eliminating the need for development retainer contracts. 

Like open source platforms, SaaS platforms also rely on themes for the front end design. Most platforms offer a mix of free and paid themes that you can usually install in just a few clicks. Some parts of the theme like colors or fonts will be easy to edit with built-in tools, but larger customizations will require a developer to edit the theme’s front-end code.

An alternative to this approach is Zoey’s design tools. All of our themes are free to use and we have developed drag-and-drop design tools that allow anyone to customize their theme without writing any code.

As with open source platforms, there’s always the option to hire a designer and developer to put together a totally custom design for your business. 

With SaaS platforms hosting fees are included in the monthly subscription fee. 

Technical Complexity

One of the major pitfalls of open source platforms is the sheer amount of technical work required from the merchant. As we covered in the cost section, this results in most merchants hiring a developer to build their store and also perform maintenance on an as-needed basis. Just a few examples of this technical work include: 

  • Hosting – Identifying the right hosting provider and plan for your business needs, installing the open source platform on the hosting server and troubleshooting any issues that arise with site uptime
  • Security – Ensuring that your hosting provider is PCI Compliant, monitoring for security updates released by the platform developer and installing them
  • Software Updates – Installing updates to the eCommerce platform and ensuring that this doesn’t break any integrations with third-party modules or other core functionality of the site
  • Ongoing Management – In general, open source platforms are built with developers in mind, which means the backend interface is usually more technical in nature. This means that relatively simple tasks like adding new products to your catalog or integrating a third-party service will be complicated and time-consuming.

One of the major benefits of working with a SaaS platform is that almost all of the technical work is managed for you. When you build your online store on a SaaS platform, you don’t need to worry about hosting, security or installing updates. Since SaaS platforms tend to be designed for non-technical users, the ongoing management of your store will be something that most people can easily handle.

Continued Innovation

Most of the open source platforms out there have been around for a very long time and are not as well supported as they used to be. More and more merchants are making the switch to SaaS and that means there’s less incentive for open source developers to spend time improving their platforms.

Open source development is very often driven by the pure passion of the developer and they want merchants to use what they create. Spending time improving something that fewer and fewer people are using is not an enticing proposition so the platforms begin to languish. Bugs pile up, security patches go unfixed and integrations with necessary third-party services are not created. 

SaaS platforms dominate modern software. More and more merchants are using them every day. As the way people and businesses buy and sell continues to evolve, SaaS platforms will be at the forefront of that innovation. If you want to future-proof the technical side of your eCommerce business, SaaS platforms are where you want to be. 

Which is Right For You? 

Now that we’ve looked at the areas of concern when choosing between SaaS and open source, lets look at which one will be right for your business. 

Technical Resources 

If you are a developer, have a team of developers on your staff or have the resources to hire one, you could be successful with an open source eCommerce platform. 

If you don’t know how to code and don’t have the resources to hire a technical team, then you will be better served by a SaaS eCommerce platform. 

Cost 

As we explained above, there are a lot of hidden costs when working with an open source platform. If you have the financial resources to dedicate to the project, then you could be successful with a SaaS eCommerce platform. 

If you would rather spend less money on technology and instead invest in areas that will help you grow like marketing, then you should work with a SaaS eCommerce platform. 

Custom Needs 

One of the benefits of an open source platform is that they’re totally customizable. If your business has some kind of custom need that a SaaS platform can’t accommodate then you have little choice but to go with an open source eCommerce platform. 

By their nature, SaaS platforms are less customizable than open source ones. All stores share one unified code base which is how a SaaS platform can deliver updates to all customers, host every store on the same infrastructure and ensure that an integration with a third-party will work for every store. However, the lines are beginning to blur, especially now that open APIs are commonplace, making data accessibility a reality even for platforms where the code itself isn’t available for review.

Choosing the Right Platform

At the end of the day, the choice between SaaS and open source is really up to you and the requirements of your business. There are great options in both camps, but it pays to ask yourself some hard questions before going down one path too far.

Zoey makes the most of a SaaS structure while offering a powerful set of B2B eCommerce capabilities. If you’re ready to move to a mature, robust offering, Zoey’s hear to help you realize your potential. Initiate a conversation with our team to get started:

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