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Your platform choice affects not only your front-end sales capabilities, but also everything happening behind the curtain. Let’s consider the general categories that all of these solutions fall into.
Further Reading:
First, your platform has to be hosted somewhere. Your choice of eCommerce platform will typically determine your hosting environment, which is either:
- On-premise, self-hosted
- Cloud-hosted
Your hosted eCommerce platform will likely fall into one of these categories:
- Open Source (self-hosted or cloud-hosted)
- SaaS (software as a service, cloud-hosted by third-party)
- PaaS (platform as a service, hardware/software available over the internet)
- IaaS (infrastructure as a service, cloud-based, pay-as-you-services)
We’ll be predominantly looking at open source and SaaS eCommerce here.
You can also classify platforms by their underlying architectures:
- Traditional, monolith
- Headless or CaaS (Commerce as a Service)
On-Premise
One option for enterprise eCommerce software are those hosted on-premise. This requires you to self-host the software. The software will usually be open source. Open-source software means you can modify all aspects of the code. Until recently, this was the de facto choice for enterprise-level businesses. By self-hosting on-premise, you maintain server and software control. That said, you will also have great responsibilities which come with increased IT staff needs to maintain hardware, manual patches and updates, and security.
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Cloud
The alternative to hosting on-premise is cloud-hosting. Open source or SaaS platforms (see below) can be hosted on the cloud, i.e. stored off-site. It is only within the last few years that many enterprise businesses have started turning to cloud-hosted options for eCommerce software.
Open Source
An open source eCommerce platform is one the company usually owns, and on which they can modify all of the code. The advantages of these platforms are server and software control. However, these platforms usually have a higher initial cost. They also require a lot of responsibilities which fall on the business to manage including security (PCI compliance), hardware, IT staff to manage, hosting, and manual integrations.
SaaS
SaaS solutions provide an alternative to open source and have grown in popularity in recent years. As an industry, cloud SaaS has tripled in global market size in the last five years and continues to grow. According to data from Statista, SaaS currently accounts for nearly $90 billion in annual revenue, which is expected to increase to over $100 billion by 2023. Why are more enterprise companies looking to SaaS? SaaS platforms allow businesses to essentially rent the platform. In many cases, the total cost of ownership is lower when everything (cloud hosting, SSL, security, platform maintenance, etc.) is factored in. They are version less and outsource the responsibility of IT management, PCI compliance, etc. The disadvantage, depending on your business needs, is that you have less backend and code-level control. While previously many enterprise level businesses tended to default to on-premise solutions, recently there have been far more viable options for enterprise level SaaS. Some of these come from providers known for their on-premise ecommerce platforms newly offering SaaS solutions including
- SAP Commerce Cloud
- Oracle Commerce Cloud
- Salesforce Commerce Cloud
Magento Commerce Cloud Edition also offers a PaaS solution. Meanwhile, players who originated as SaaS providers have now moved into the enterprise space with new offerings to meet the complex business needs of clients with high volume sales.
These include BigCommerce and Shopify Plus, both of which have been growing and adopted by more established enterprise retail brands. By choosing to rent instead of own, businesses are able to shift their financial and human resources from maintenance and integration to building relationships with customers and improving customer experiences. This white paper shares more about why enterprise brands are making the shift to SaaS.
Headless
For many businesses, the digital experience you’re creating is just as important as the product you’re selling. This is especially true in highly competitive industries. What is your business doing to create a positive experience for customers that sets you apart from the competition?
Headless commerce is an exciting innovation in SaaS eCommerce platforms that adopts a loosely de-coupled micro service architecture. Unlike in a monolith architecture where the frontend and backend are tightly coupled, a headless approach separates the front-end user interface layer (the “head”) from the underlying backend service layer. These two layers are connected through APIs or web services. Headless is a micro-services approach, as it decouples one element of the system instead of relying on one interdependent system. Decoupled approaches like headless are a potential advantage to enterprise businesses because they allow for greater freedom and control. You can develop some elements of your system to operate independently from each other instead of having everything be fully joined together.
Henna Caravan shared the advantages they found in moving from an on-premise solution with Magento to a headless SaaS option with BigCommerce:
“We needed a platform that would be able to host both an eCommerce site, as well as a robust content site that would allow us to educate the market. BigCommerce was the only eCommerce platform for a business of our size that allowed for product variant customization in a complex way, and that contained both an eCommerce solution as well as content pages that could serve as a CMS.” – Jessica McQueen, Founder of Henna Caravan
A headless eCommerce platform will still provide important functions like PCI compliance, security, fraud management, and inventory management to larger key infrastructure points such as a CMS, ERPs, PIMs, OMS, and POS. But at the same time, it gives more freedom to create unique customer experiences with the frontend content management system. Popular eCommerce platforms like BigCommerce, Elastic Path, Moltin, and commercetools offer headless, micro-service and API-driven options.
Final thoughts
An enterprise eCommerce platform is a software system (either self-hosted or on-premise) that serves the complex requirements of a large business. Enterprise-level systems are scaled to your business size and growth roadmap. A good platform should be able to not only meet your needs now, but also grow with your future sales volumes.
By Chris Clifford
Chief Strategy Officer. Chris founded his first technology startup at the age of 17 out of his dorm room and has gone on to co-found, advise and angel invest in a number of technology and CPG companies.