Shopify Plus and Magento are the two leading digital commerce platforms poised to dominate the next decade of buying and selling online. Organizations faced with the decision of which platform to invest in when migrating to a new commerce platform or launching a new buying and selling experience will often find themselves overwhelmed by a long list of options, prices, uncertainty about what the commerce landscape will look like in five years, and questions about which platform will provide the best long term investment.
The Digital Commerce Platform Landscape in 2018
Salesforce Commerce Cloud (née Demandware)
Notable niche players:
SquareSpace Online Stores
Shopify Plus is the enterprise version of the wildly-popular, cloud-based SaaS platform Shopify. Shopify Plus is unique in its dramatically-reduced implementation budget (most or all backend development is unnecessary), ability to scale almost infinitely without any user effort or investment, and its plug-and-play app ecosystem.
Magento Enterprise is the proprietary version of Magento, an open-source, PHP-based commerce platform. Magento is software you have to download and install on a server infrastructure you design, build, and maintain (though Magento recently launched a managed cloud offering). Originally an independent company, eBay purchased Magento in 2011 only to spin it out as its own company in 2015. While not a cloud solution, Magento does offer full code control, so you can extend the tool in any way you might want (though whether that is advisable depends on the use case).
WooCommerce is well positioned to continue its stellar multiyear run in 2018, but it’s not the best long-term bet. Built as an extension to the widely-popular content management system (CMS) Wordpress, WooComerce is an easy way to add commerce capabilities to an existing WordPress site. While the installation base is very large, the realities of the digital commerce ecosystem today make Woo’s long-term prospects rather dim, and its ultimate decline and demise likely.
While WooCommerce benefits from giving users full code control and a dead-simple way to extend Wordpress into commerce, it can never rival Shopify in scale or scope of features. Because it runs within a Wordpress site, WooCommerce’s ability to scale is tied directly to the hardware that is built and maintained for the site. The second fatal flaw is in the app ecosystem. Compared to Magento, the app ecosystem for WooCommerce is tiny. The ease of the Shopify setup coupled with the head start Magento has with extensions will make it impossible for WooCommerce to win on either of its competitive advantages over time. With Woo, you trade ease of set up for a stunted extension landscape and an inability to scale easily.
The next five years will probably be stable for WooCommerce, but beyond that, the outlook is decidedly uncertain.
Salesforce acquired Demandware in 2017 and renamed it Commerce Cloud. Commerce Cloud continues to be a strong platform for fashion-driven commerce experiences. While Commerce Cloud is a product of Salesforce, it’s too new of an acquisition to see any benefits of increased ease of integration with other Salesforce products. Acquisitions can also cause enormous internal challenges, like changing priorities, overhead from new compliance and procedures from corporate, execution issues caused by inevitable staff turnover, and the shifting of internal leadership focus from managing the product to managing new owners.
Given these challenges, outside of a fashion use case, Salesforce Commerce Cloud is not a strong option for a digital commerce platform.
What about the niche players?
While the focus of this article is on the major players in digital commerce, there are several notable issues to consider regarding smaller players. Drupal Commerce, the digital commerce cartridge for the popular open-source enterprise CMS Drupal, is in terminal decline. The IBM WebSphere team is in complete disarray: During a project with a major household consumer packaged goods company in 2017, the IBM team managed to share an internal chat dialogue showing that members of the IBM team conspired to hide known defects with the build from the client so that they could launch the site on time. (They knew launching a stable release on time was impossible.) But it gets worse: During that same project, the IBM team accidently showed pornography during a client meeting screenshare. (As my mother likes to say, you can’t make this shit up.)
SAP Hybris is an expensive solution (licenses start at $500,000 and implementation budgets can easily be several times that) that works very well for business to business (b2b) commerce. Its greatest benefit over cloud options—having full code control—is provided more cheaply by Magento, a solution with an even greater app ecosystem and rapidly-expanding support for b2b commerce. Given its limitations on the experience layer, tiny extension ecosystem compared to other players in the space, and the high cost of implementation, Hybris will remain a notable but niche player, with an uncertain long-term future.
BigCommerce is the niche player that is most similar to Shopify. It’s an SaaS platform with many of the same benefits offered by Shopify Plus. However, it continues to struggle to differentiate itself in the market and, over time, may fail to become a greater threat to Shopify Plus.