Many companies evaluating open source software for the first time have a hard time differentiating between free or ‘Community Edition’ versions of products vs. commercially licensed versions such as ‘Magento Enterprise Edition’. For many would be buyers, open source automatically equates with free software. This is certainly true with Magento. About 2 to 3 times a month, I find myself helping an organization that is looking at using Magento as the backbone for its ecommerce store differentiate and justify the value of Enterprise Edition vs. Community Edition. These discussions stem from the initial emotional reaction that the company has around the idea that there is a piece of software that they can download, install and run their multimillion dollar business on that is free. It’s natural for these organizations to want to find some way to do this, even though the cost of Magento Enterprise is a very small fraction of what traditional Enterprise class ecommerce software costs and the differences between Community Edition (CE) and Enterprise Edition (EE) are so significant. They’re looking to save every dollar possible and this seems like the best place to start. But what many of these merchants have learned is that the long term costs of using Community Edition far exceed the costs of Enterprise Edition Licensing.
As a result, I decided it was worth sharing a few of the key differentiators that I believe by themselves, should rule out Community Edition for any serious merchant who is driving more than $500,000 per year in online business. Does that mean that if you are doing less than that you should use CE? Not necessarily, but I would agree that the software cost is more material when you are running a smaller online business. If you are smaller, and you have or expect a strong growth rate, you should still opt for Magento Enterprise because you will quickly hit your tipping point where Community Edition because a limiting factor in your growth.
The items below are not a complete list of differentiators. The complete list is too large to detail for a blog like this. But these items are absolutely difference makers for growing organizations, let alone merchants who are running larger and more active online stores.
Key Item #1
Feature Functionality is Superior in Magento Enterprise
Magento has a pretty good starter’s list of feature functionality differences between the versions at http://www.magentocommerce.com/product/overview-compare?utm_source=magentocommerce&utm_medium=topnav. Of this list though, there are several items that are dramatically better in Enterprise Edition and which are used in nearly all online stores (the improved functionality has broad applicability).
Customer segmentation and targeting, Private Sales, Price and Promotion Rules are all features included to help drive conversion and increase dollars captured per visit.
Reward Points, Store Credits, RMA Support, Gift Registry and Gifting Options all help drive customer loyalty and increase value per customer account.
The CMS engine is a great tool for adding and expanding your sites overall content beyond just the product catalog. It allows you to more effectively manage static content, images, ads, and other content driven elements of your site without requiring programmatic changes. It’s a tool that drives self-sufficiency.
Call center assisted shopping, Minimum Advertised Pricing and Customer Groups can all help drive different levels of clients to higher levels of cart conversion and account value. They also allow you to offer an inside sales model and toolset based on a single application so that inventory and orders don’t have to be tracked across multiple applications. These items dramatically impact both top line growth and bottom line costs. And if you are an organization that also has a business to business (B2B) model that you want to incorporate into your site, you absolutely have to have these elements.
No B2B firm, regardless of size, should be using Magento Community Edition, period.
While there are other functionality differences, the few items I’ve listed are elements that if you were to try to build reasonable functionality into community edition, you’d spend dramatically more on services than you would have on the original commercial software (likely 10 times more in the first year alone).
But can’t one use extensions to mimic these items? Not really. Some extensions are better than others, but most have very narrowly defined uses and most will still require a fair amount of custom development if you want to approach what Magento Enterprise offers natively. In addition, that development cost (both custom and extension modification) you incur is not a one-time cost. Every time you want to upgrade, every time you want to make any substantive change to the site, you’re going to have to revisit those changes and re-invest to bring them up to date or to test and validate your modifications don’t conflict with the extensions. If you are worried about total cost of ownership, Magento Enterprise is a more effective solution.
Key Item #2
Architectural Improvements and Ability to Scale Efficiently To Support Growth
One of the most valuable elements of Magento Enterprise Edition is its performance tuning elements and architectural advances beyond Community Edition, such as full page caching. We’ll be releasing another blog on this subject in the near future, but suffice to say, this change alone can reduce page load time by several seconds and is a great driver of horizontal scale as your site takes on more and more traffic.
These features will save you money in terms of hardware costs and will reduce opportunity costs realized when users have poor experiences with your site and abandon it because of longer page load times.
Key Item #3
Support and Product Releases, the Common Core Architecture
Because Magento Enterprise Edition includes so much more native functionality, and because you will use fewer extensions and make fewer, if any, core file modifications, your upgrades will be dramatically easier. This is important because Magento makes substantive releases and updates to its product each year. You don’t want to be boxed into an older version because you had to hack it up and modify its core to poorly mimic functionality in the commercial version. Nearly every Community Edition customer we speak to who is using version 1.5.0 or earlier is incapable of upgrading their Community Edition site. To move to even the newest version of Community Edition, they basically have to start over.
When you look at these 3 key items, and the ongoing costs of having to programmatically update your Community Edition site every time you want to make a change of any material note, you are financially much better off using Magento Enterprise. The software cost is very small, and for organizations with a million dollars or more of online business, you will save yourself a minimum of 3 times the cost of software in reduced programming time or services by leveraging the better platform. This cost saving is expected each year, not just in year 1.
To learn more about Magento Enterprise, or to get information on converting your Magento Community Edition site to Magento Enterprise, please contact Levementum using our Contact Us Form.
Levementum is a certified Magento Gold Partner.
