The pros and cons of each type of eCommerce platform

We regularly meet with new and current clients and mentor them through the process of selecting the right eCommerce platform for their project.  We specialise in these services and find it hard to keep abreast of each player so we feel their pain.  The eCommerce platform space is forever evolving through new features and functionality and the very regular acquisition.  The following blog talks to the different types of eCommerce platforms available and the pro’s and con’s of each type of solution.

Proprietary platforms

Pro’s

  • Enterprise tends to lead to greater capability and larger functionality in this type of solution.  Enterprise-focused eCommerce platforms are traditionally for larger and more affluent companies and therefore can offer a level of certification, engagement, support and partner programs more tailored for the Enterprise client, but this comes at a cost – e.g. license cost / professional services.
  • Some Enterprise platforms have experienced rapid growth in features and function via acquisition and bolting-on. This can have its own drawbacks, such as resulting in a truncated and clunky UX.

Cons:

  • Purchasers of Enterprise platforms can be caught out by the ‘shiny’ parts of the platform without realizing the costs vs. redundant platform capabilities. This often results in overspending before the capabilities of the platform can be utilised or realised. Therefore, this tends to lead to poor ROI and a lot of explaining to the Board or Shareholders.
  • The costs in rolling out a larger platform, don’t naturally lead to comparative levels of sales and profit growth. A lot of other investments need to be considered i.e. Logistics, Marketing, etc… to ensure over-reaching or over-expectation is not experienced by all parties.
  • License costs for enterprise-focused platforms can be expensive especially when structured on an ongoing licensing and professional service basis.
  • There is a greater reliance on internal development teams for enhancements. So you’ll want a company that has significant R&D budget and a communicable road map to ensure you stay up to date with features, functionality and market trends.
  • Security and patching can be reliant on a development team identifying problems and then the patching accordingly = costs. Identifying issues and patching in a timely fashion are critical for security leading to a higher reliability on 24/7 resources = costs.
  • Tends to have less flexibility for customisations compared to open source in the way of ‘Speed to Market’.
  • Higher employment costs for Java and .Net human resources. Java resources in APAC are particularly expensive due to a smaller pool of experienced resources. A major lack of talent on-shore supplies pushes up demand and therefore salaries.
  • New platforms in the APAC region have slick sales but ensure they also have strong local support as well with training capabilities.

Open source platforms

Pro’s:

  • Open source community is engaged and actively contributing to the product road-map, major releases, modules and extensions.
  • It’s easier to extend the platform as the code base is open and accessible for enhancements.
  • The ability for ‘Speed to market’ and flexibility tends to lead to increase possibilities, especially around marketing.
  • Development costs are often less as many more resources, talent and ‘digital’ agencies available.
  • Ability for retailers to create their ‘own’ modules (usually with a development partner) and have these tested by battle hardened people – there’s a world of contributors out there.
  • Business users are often more engaged with the platform more than a proprietary one, as documentation and research is better developed (and much more easily accessible) with a larger community of users.
  • Easier to scale up (or down) to match the opportunities for the retailer. As the investment generally is lower than an Enterprise one, the retailer can be making money to re-invest back into eCommerce and the supporting business infrastructure for better execution and experience at the retail level.

Con’s:

  • Perception has held back Open Source platform adoption at the major retail level. There are some legacy viewpoints that Open Source isn’t suitable for an Enterprise solution.
    Open source means code base is open and therefore inexperienced partners have a lower barrier to entry. This can cause knock on effects if developing using poor coding practices such as ‘hacking the core’ when not understanding the correct processes.
  • Requires a completely different mindset to traditional proprietary platforms – there are more releases, more security updates, more options – there is the need to be agile to handle it. It is worthwhile to have an asset in a trusted retail on-line consultancy partner or an internal resource to entertain ideas and understand how these can come to fruition.

Cloud-based/hosted/SaaS

Pros:

  • Reduced complexity from a hosting and managed services perspective as this is baked into your subscription cost.
  • Some Vendors have quite flexible licensing models e.g. reduction in license costs with a profit share or clip of the ticket model. The possible shared’ goal’ ensures that there can be a push by the vendor as well as the retailer side to push for better results.
  • Patches and security updates ‘just happen’.
  • Hosting is traditionally highly available and scalable and this is backed as this is baked into your subscription cost.
  • There are generally regular roll-outs of new features and functionality available for use.
  • The suppliers we have dealt with have generally an established sales, support and certifications to engage.

Con’s:

  • Ongoing licenses costs can add up. Ensure you have a good vision of your likely growth and understand the best license model to accommodate this growth.
    Can have shared infrastructure with other retailers, pending on the size and value as a retailer. Therefore the front-end / back-end performance of your website can suffer if other co-tenants are running big and larger traffic campaigns.
  • The vendor may restrict the ability for a developer to make front-end vs. back-end development changes in order to ensure unforeseen knock on effects to server uptime. ‘Speed to market’ and flexibility can suffer because of this, especially around marketing.
  • Can have a reduced set of extensions / modules available to you for extending or integrating with external systems. This is highlighted when the retailer wants to do or create something ‘now’.
  • The ability to ‘grab data’ in and out can be restricted. This is dependent on the supplier and the agreements/contracts in place.

Licensed/on premise?

Pro’s:

  • A level of comfort for the legacy IT Manager as they can more than likely touch and feel the servers as they reside under their desk next to their AS400.
  • More immediate controls in regards to data security, though this means you’re now relying on your resources for server security 100%.

Cons:

  • The ability to scale quickly due to traffic growth or promotional spike.
  • The Ability to keep infrastructure current and up to date can be heavily restricted.
  • The Reliance on IT teams that can be silos from the rest of the business. Can reduce capabilities and flexibility.

Its a confusing space, but one we love and we’re more than happy to help you make an informed decision.

Feel free to contact us on hello@playhousedigital.com if you would like to discuss this article or require any more information.

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