Immediately after making the decision to start an online business or incorporate an eCommerce add-on to your brick and mortar shop, you have to decide which eCommerce software to use and possibly how to host it. Good decisions are founded on sound information, which is what we provide on this site. Today we take a close, hard look at the differences between SaaS and self-hosted eCommerce platforms.
What exactly is SaaS eCommerce?
SaaS is a term taken from cloud computing. It means software as a service. In this case, it is eCommerce software that is being provided as a service. When an entrepreneur uses a SaaS eStore, it simply involves signing up with a provider such BigCommerce or Shopify via their website. The provider then provides a basic eStore that the entrepreneur builds into his or her store by customizing the look and adding merchandise and information.
What is self-hosted eCommerce?
E-commerce software, typically open source, is sometimes available for download. After downloading software such as Magento, entrepreneurs can host the eStore on their own servers, which could be on-premises, virtual, or cloud hosted. Here you can read a more detailed comparison on BigCommerce vs Magento.
Top five differences
Pricing: In a nutshell, self-hosted eCommerce software can be downloaded free while SaaS has fixed monthly prices. Most SaaS platforms have different pricing tiers with the more expensive tiers having more features, more support and increased flexibility for customization. However, saying that self-hosted platforms are free is not really true as is explained below.
Costs: Why costs and prices? Self-hosted eCommerce software download is free. However, the application has to be customized and hosted, both of which are not free. Typically, the developers will make money by providing these services at a fee. For entrepreneurs who don’t have programming skills, the costs of consultancy could easily translate to savings on SaaS charges. Moreover, the costs are typically not known upfront, making it difficult to budget. When hosting charges are factored in, self-hosted solutions become more expensive.
Reliability: The biggest advantage of an online store is to have your products on sale globally, all day every day. Reliability is the measure of how often your eStore is open for business. It is reduced by the store’s unavailability due to server or software issues, and when customers cannot complete transactions due to payment or cart issues. While it is possible to have high reliability for self-hosted eStores, only big budget ventures can match the reliability of SaaS eCommerce.
Security: It is common to read news about the breaching of big eCommerce websites and consequent aquisition of customer information by hackers. Small eStores are not exempt from hacking, it’s just that they don’t make the news. Besides reliability, high security for self-hosted eCommerce requires big bucks. For most entrepreneurs, it is best to go with SaaS solutions.
Support: Remember Michelin’s ‘Power is nothing without control’ ad? Software is as good as support. Great software with lousy support is just bad software. Self-hosted platforms require the entrepreneur to stay informed with platform news in order to run patches, updates and upgrades as they become available. This information is available via platform news feeds (RSS), Wikis and platform website. On the other hand, SaaS support is usually automated as it is the responsibility of the provider to keep the platform secure, up to date and available.