The main lesson to learn is that although the cloud is useful, in case it sets limits to the use of a platform that has been famous for its freedom, failure is also on the horizon.
Magento Go struggled with several problems, and even though Magento launched the cloud based service again in 2016, it was justifiable to focus rather on their two main products instead. Let’s review it in detail how it started, what the concept was, and why the story ended like the way it did.
We’re going to go through the following topics:
- History of Magento Go
- Why did Magento Go fail?
- The pricing of Magento
- Solution for bigger enterprises: Enterprise Cloud
- Solution for smaller companies: Zoey
- Why hosting your own Magento may be better than SaaS?
History of Magento Go
The original concept was that Magento would offer merchants an online shop system to which cloud-based hosting service is also provided – thus facilitating the lives of the merchants.
The platform was launched in February 2011, and by the middle of 2014 it became obvious that the experiment had failed, and that eBay, the owner of Magento, would soon discontinue the service. In the end, the total cessation of the operation took place in February 2015.
In order not to abandon the users – almost 10 thousand people used the cloud-based system at the time – Magento partnered up with BigCommerce and that’s where they were migrated. The majority of them have been using this service ever since.
According to the official communication, the platform was terminated because eBay wanted to concentrate on the main products instead, the Magento Community and Enterprise systems – and of course, on the development of the then long delayed (since then released) Magento 2. Some partner agencies say, as a matter of fact, they never have actually focused on the Magento Go system.
Why did Magento Go fail?
First of all: the biggest strength of Magento is that it provided almost complete freedom to the merchants. There’s no other platform on the market that is so effectively shapable, transformable to personal needs like Magento, which is exactly why over 250,000 ecommerce stores are keen on using it – from the smallest enterprises to the biggest multinational brands.
Even though its development, modification is a task that requires a real professional, and it’s not nearly so simple as for instance in case of a WordPress based system, this flexibility is well worth the investment. (If you want to read more about this, check out our articles on CMS comparison published earlier, and also this article.)
Magento Go wanted to make the job of merchants easier among others with making the installation of the system unnecessary to be able to use it, since it ran as part of a cloud-based service.
On the other hand, this also took most of the control out of the hands of the users. Magento Go was the least customizable version of Magento that ever existed. Predictability worked against the success of the system in this case, as it was exactly the biggest advantage that has been sacrificed.
Consequently, on the one hand, it was too simple, it offered too little for those who wanted to have a complex solution – on the other hand, it was still Magento, which means that for those smaller ecommerce stores that wanted to have an easily manageable, problem-free online shop, in which they don’t really need to be “experts”, it represented a too complicated solution.
It also caused problems that eBay didn’t manage to reach the target market that it wanted. It can’t be said that Magento Go was a specifically unpopular solution, but it had to face too many competitors, systems that have already gained a stable foothold on the market, like BigCommerce or Shopify, and also companies like Yahoo and Amazon.
And the smaller enterprises wanting to have the Magento system rather chose the Community version – the use of this is completely free, and even though hosting is not included, due to its customizability, this was more worthwhile for the majority of the users.
If significant priority had been given to Magento Go, Community would have been damaged at the same time, which is the most important product of the company – so it seems a justifiable decision that the experiment was considered to be unsuccessful after having taken all this into consideration.
The pricing of Magento
Alongside the free of charge Community edition, the other product of the company is the Enterprise edition – this is not at all the league of the smaller players, significant amounts are paid for the system by the most demanding companies.
In the previous system, before the launch of Magento 2, the pricing started at a fixed 18 thousand dollar annual fee – in exchange for which companies were provided with a corporate level service package, not just with the system but also with its background and continuous support as well.
However, they have switched to a revenue-based model since the release of version 2: it depends on the income of the given ecommerce store how much the licence costs in the given year.
The online shops with a turnover of less than 1 million dollars thus pay 22 thousand dollars for a year, however, those generating an income of 10-25 million dollars have to pay 75 thousand dollars for the Magento EE annually.
Costs of Magento Go were insignificant compared to that. It was available in different packages, which means that the monthly fee varied based on what kind of support, how many servers, how many admins, how many languages, what bandwidth the user requested. The cheapest construction cost 15 dollars, the most expensive version cost 125 dollars per month.
Solution for bigger enterprises: Enterprise Cloud
It came to light recently that Magento decided it had already got over the failure and it would give another go to the introduction of the cloud-based service – only, they would have a smarter approach to it this time than what they had in case of Magento Go.
It was revealed in July 2016 that a new Enterprise Cloud service is being prepared, targeting specifically large companies this time. Particularly those among them who are thinking big but who don’t have their own infrastructure to ensure hosting and they don’t even intend to establish one.
Magento promised that Enterprise would be easily integrated with the different systems, and that they would keep all the flexibility that makes Magento Magento, which means that the ecommerce stores (and the service) is completely customizable to the clients’ needs.
Solution for smaller companies: Zoey
Zoey is not exactly a Magento product, but it’s compatible with it: it was released in 2014 and it was built on Magento Community Edition 1.9. Zoey is actually the first real Magento SaaS (Service as a Software) solution, which, although it’s a platform independent from the Magento Community edition, is absolutely compatible with its ecosystem, therefore it works with several Magento extensions.
Alongside Magento, Zoey is also a partner of PayPal, thanks to which the PayPal payment process is built in by default. Zoey offered in various packages in a monthly fee payment construction, with a free trial period of 14 days.
Why is hosting your own Magento (CE, EE) more advantageous than that of SaaS based platforms?
The answer is simple: because it puts bigger control in the hands of the user. In case some sort of development, modification, integration is necessary, in case the owner has his own Magento, the only thing he needs to do is to look for a reliably working Magento developer.
As a consequence, optimization and modification of an online shop is a job that will certainly need to be done. In case of Magento, with individual hosting, complete customizability will ensure that you can do that properly. On the other hand, in case of SaaS solutions, even if freedom remains, the process will definitely be more complicated and thus slower as well, since intermediary stages will be included in it.