5 Things to Know About Magento Open Source, Commerce, and Cloud Editions

The Magento ecommerce platform has been empowering merchants for years with robust features and scalability. With versions suited to small, medium and enterprise-level businesses, Magento’s infrastructure is engineered to help companies grow.

If considering Magento for your ecommerce business, step 1 is to identify which edition is right for your business. Here we explain and compare the three platforms – Open Source, Commerce On-Premise, and Commerce Cloud – to help you decide. While all have the same core features and functionality, the Commerce versions come with more native tools than the Open Source version.

Rebranding in Process: The name Magento is becoming Adobe Commerce, Powered by Magento.

1. Magento Open Source: A Great Choice for SMBs

Open Source is the free edition of Magento that’s popular among SMBs (small- to mid-sized businesses). It’s packed with many native features and high extensibility including a wealth of third-party solutions. In fact, Open Source meets the needs of some enterprises that have built custom solutions on top of native functionality.

In our team’s experience, Open Source offers everything a business needs to build a successful and scalable store. You can easily modify the storefront, add extensions, and accomplish deeper customizations with the right development team (ideally a Magento Certified Partner). While the Open Source software is free, there are costs associated with customization and maintenance.

Magento 2 Open Source Notable Features

  • Basic Storefront Functionality includes catalog and product management, customer account functionality, integrated checkout and shipping options, extensions and integrations, and some reporting and marketing tools.
  • Full-Page Caching improves page loading time, reduces the load on the server, and improves indexing speed and search engine optimization (SEO) results.
  • Mobile Responsiveness means customers can easily complete orders on their computers, tablets, or phones.
  • Updated Technology Stack includes PHP, Apache Composer, MySQL, HTML5, and jQuery, for improved performance.

2. Magento (Adobe) Commerce – On-Premise: Enterprise Software with Third-Party Hosting

For businesses needing more advanced features, Magento Commerce (aka Adobe Commerce, Powered by Magento) is a paid edition including all features available in Open Source plus many advanced tools. It’s designed to help merchants enhance the user’s experience (leading to increased revenue) and streamline website management (enabling improved efficiency). This platform is ideal for B2Bs or businesses with more significant or complex eCommerce needs. Magento Commerce allows vast creative freedom to customize stores, add user portals, and much more.

Magento (Adobe) Commerce Features

  • Page Builder lets you create website pages without any coding. Using templates and predefined elements, you simply drag and drop features of the page into place.
  • B2B Module lets you organize your store into permission-based hierarchies, and it introduces new ways to buy, such as personal catalogs, negotiations, company credit systems, and requisition lists.
  • Improved Marketing Tools give you more detailed reports on customer activities and customer segmentation so you can divide your clients into more precise groups. You can also use email reminders and an abandoned cart function to encourage customers to return to check out.
  • Customer Engagement Features such as gift registries, gift cards, reward points, returns, and store credit give new ways to engage with customers and keep them coming back.
  • Advanced Payment Integration options, such as Braintree and PayPal, expand user options at checkout, and integrations with CyberSource and Worldpay enhance transaction security.
  • Content Staging lets you preview content changes and schedule a wide range of content updates from the admin panel.
  • Improved Import/Export features address the more limited data management available in Open Source. For example, Commerce allows scheduled imports and exports so you can complete data transfers daily, weekly, or monthly.

On-Premise Hosting Options

Magento Commerce is available with various hosting options. “On-Premise” means that hosting is provided in one of three ways, giving the merchant and their development partner flexibility with where and how the site is hosted:

1. Hosted by the developer so all site work is handled by one team. This typically allows for quicker response times, faster updates, easier customizations, and better optimization.

2. Hosted by the business, for those companies that have internal IT and hosting resources. This may be dictated by company leadership, who want hosting to be in-house.

3. Hosted by a third-party hosting company. This is for companies wanting hosting decoupled from development. Depending on the host and level of service provided, there could be cost savings.

In our experience providing on-prem Managed Hosting through Amazon Web Services (AWS), we’ve found distinct benefits for clients – it’s easier to customize, faster to update, and in many cases, less costly in the long run. We continually optimize our hosting environment to provide top-tier performance and reliability.

3. Magento (Adobe) Commerce Cloud: Software & Hosting from One Entity for Medium-Large Businesses

In addition to the On-Prem version, there’s a Cloud hosting edition of Magento (Adobe) Commerce, where hosting is provided by Adobe along with the software leasing. Commerce Cloud is ideal for businesses wanting the ecommerce software and hosting under the Adobe umbrella, for a level of stability and convenience that suits their needs.

Adobe Commerce Cloud’s Hosting Features

  • AWS Hosting: Commerce Cloud uses Amazon Web Services (AWS) and its cloud infrastructure to keep your store performing at peak efficiency – even during heavy spikes in traffic.
  • Fastly Integration replaces native full-page caching to enhance web and mobile performance, deliver near-instant inventory and pricing updates, optimize images for higher conversion, and maintain great speeds even during traffic spikes.
  • ECE-Tools Package simplifies common Commerce Cloud processes by leveraging new deployment scripts and tools. These processes include managing crons, verifying project configuration, deploying a Docker environment, and applying Magento patches.
  • Gib-Hub Integration lets developers manage your store from the GitHub repository, automatically syncing content in GitHub with your Adobe Commerce environment.

4. Magento Open Source vs. Commerce

While Open Source and Commerce editions are built on the same codebase with the same basic functionality, there are significant differences in terms of capabilities. As mentioned above, Open Source is a powerful and flexible platform for SMBs, while Commerce addresses the more nuanced needs of B2B, larger, and more complex businesses. An Open Source store will have a strong ecommerce foundation while Commerce stores have premier features available, including Page Builder, B2B/wholesale functionality i.e., Requisition Lists, and enhanced marketing & engagement capabilities.

Magento Open Source is free to use but there are maintenance and development fees. The added functionality of Magento Commerce comes at a price — the license fee starts around $24,000 annually. If your business doesn’t yet have the capital for this edition, Open Source is a great option. Both of these options will require separate hosting costs.

5. Magento Commerce On-Premise vs. Commerce Cloud

Magento (Adobe) Commerce On-Premise and Magento Commerce Cloud both offer advanced, world-class ecommerce functionality due to “baked in” functionality, cohesion with third-party extensions, and ability to customize. As covered above, the key difference between On-Prem and Cloud is how they’re hosted — the On-Premise edition is hosted by the merchant, a developer such as Harris Web Works, or a separate hosting company, while Cloud is hosted on Magento’s AWS stack.

So which is better for your business?

  • Commerce Cloud is for those who want hosting and maintenance from a single-service PAAS (platform as a service). This edition uses AWS hosting, with all the power behind it providing enhanced security, minimal downtime, and unparalleled scalability.
  • Commerce On-Premise enables faster turn-around time for deployment and updates, and more nuanced hosting optimizations. If the On-Prem setup uses AWS (as we do), safety and reliability can be comparable to Commerce Cloud.
  • Licensing for Commerce On-Premise starts at around $24,000 annually while Commerce Cloud starts at around $40,000 annually. It’s quite possible that On-Prem hosting can cost less than incremental cost for Commerce Cloud (in this example, $16,000), so the base fee of software + hosting may be less with Commerce On-Prem.

Other Considerations: Cost, Reliability, Speed of Updates

Ultimately, choosing the right Magento edition for your business will depend on your business’ needs and budget. Open Source is an incredibly powerful and flexible platform, and as your business grows, you can scale into Commerce On-Prem or Commerce Cloud for additional functionality. Commerce On-Prem is efficient for those wanting the software platform to be separate from hosting while Commerce Cloud is ideal for those wanting software and hosting from the same PAAS company.

  • Open Source costs – Software licensing $0. Hosting is by third-party (the business itself, the developer, or a hosting company).
  • Commerce On-Premise costs – Software licensing starts around $24,000. Hosting is separate, costs vary based on set-up and resources needed.
  • Commerce Cloud costs – Software licensing + hosting starts around $40,000 but could cost upward of $300,000 depending on tier.

Advantages of Working with a Magento Partner Such As Varato

Becoming a certified Magento Business Solution Partner means that a website development agency has advanced proficiency using the software to build, maintain, and upgrade ecommerce sites. Years ago, Harris Web Works completed the rigorous testing and qualifying process to earn certification. In addition, we have our own AWS server environment that we’ve optimized for Magento (Adobe) use, enabling comparable (or better!) performance than other options.

It’s our mission to help businesses grow in the digital era by providing strategic guidance, technical implementation, integrations with ERP and other third-party systems, managed hosting, ongoing site support, content creation, and marketing implementation.