Saas vs Open Source eCommerce
Updated · Mar 06, 2023
Setting up an ecommerce business has many moving parts, but there are a few things you can do to start off on the correct foot.
Of course, you must research the industry and find a niche you can target. Then, set up a functional website with compelling content that will attract visitors.
That site-building step is often the part that’s most challenging.
It’s easy to focus on the products and the marketing, but what about the structure that underpins it all?
What about the things that put the “e” in ecommerce? We’re talking about the mechanics on an online store.
Join us as we discuss SaaS vs open source ecommerce platforms, taking a look at both in order to help you find your best fit.
Let’s start off with the definitions.
Open Source Definition
Open source software is software with its source code available, under license, for all users to freely study and modify.
Open source software is usually developed as a community effort, with programmers improving upon the code and sharing their changes with everyone else.
This approach has led to the creation of some of the most popular and widely used programs, such as the Linux operating system (which powers basically every supercomputer on the planet) and the Firefox web browser.
While open source website software is often free, the user licensing agreements typically place some restrictions on users.
For example, it is customary that any improvements made to the code must be shared with the community.
WooCommerce and Magento are two of the biggest open source ecommerce solutions.
SaaS is “software as a service”.
It is software offered by providers on the web. Clients can access the software, usually through a web browser, or app, while the vendor manages everything from the infrastructure to security.
SaaS has become a popular delivery model for many business applications, such as customer relationship management (CRM) and human resources (HR).
SaaS solutions are usually proprietary, so users can’t see the source code or modify it. There have been instances where source code has leaked, posing a problem for these platforms.
Shopify is one of the best-known SaaS platforms for ecommerce, operating in 175 countries.
SaaS vs Open Source eCommerce—How to Choose
So there you have the basic definition of the two types of ecommerce.
To sum it up, open source is a DIY approach, while SaaS is having it done for you.
Next, let’s dig deeper and see what this means for you practically.
The amount of effort needed by you varies greatly between SaaS ecommerce and open source.
With open source, you or the developers you hire will have to do everything to set up and manage the platform. From installing and linking everything to configuring the servers, and creating a payment gateway.
Arguably, this is the most time-consuming part of the process, as getting to know the software takes time.
On the plus side, once you are familiar with it, sky is the limit, as most quality ecommerce platforms are extremely potent.
You’ll also have to find a good hosting deal, but luckily there are hosts that offer both WooCommerce hosting and Magento hosting to support these open source ecommerce platforms.
With SaaS, most of the work is done for you.
SaaS platforms have everything set up already, including the hosting of your store.
You’ll still have to do some work, but it’s usually nothing beyond what one person could manage and requires minimal foreknowledge. Typically, you can use a drag-and-drop site builder to flesh out your store, without delving into any coding or complex configurations.
Ultimately, SAAS requires much less effort.
When it comes to security, there are a few key differences between open source and SaaS.
First of all, with open source, the code is freely available for anybody to analyze. This means that there are more potential "eyes" on the code, which can help to identify vulnerabilities.
However, it also means that there are more opportunities for malicious actors to find and exploit weaknesses.
With SaaS ecommerce, the code is kept hidden, owned, and managed by a single entity. This can make it more difficult for attackers to gain access, but it also means that vulnerabilities are more likely to go undetected.
On this front, the two types are about equal.
When considering security, you’ll need to look at the track record of the specific solution you’re thinking of going with, and its parent company, if applicable.
When it comes to customization, open source is certainly the winner.
Open source ecommerce solutions like Magento and WooCommerce give store owners complete control over their code, making it easy to customize the look, feel, and functionality of their site.
Of course, this also means that open source platforms require more technical knowledge to set up and maintain.
SaaS platforms like Shopify and BigCommerce offer turn-key solutions that are easy to use out of the box. However, this also means that SaaS platforms are less flexible when it comes to customization.
With SaaS you’ll have control over the look of a site, but you won’t be offering any functionality that thousands of others aren’t. You’re also stuck with any fixtures you don’t like.
Pound for pound, an open source ecommerce platform offers better customization, but the trade-off is the amount of effort required.
SaaS platforms are easier to maintain, as they are hosted by the service provider, and updated automatically.
This can be a big advantage for businesses that don’t have the resources to dedicate to maintaining their own platform.
In contrast, open source ecommerce software needs constant monitoring and maintenance by you or someone you’ve hired.
If something goes wrong, it can be particularly painful for smaller businesses, or businesses running a heavy tech stack.
One way to guard against any big disruptions, whether you're open source or SaaS, is to shift towards a headless ecommerce model.
SaaS platforms offer a lot of support. Many boast 24/7 support, with teams spread out across the globe, usually with ticketing and live chat.
Unlike with a SaaS ecommerce platform, with open source, you’re basically on your own.
Open source communities will be your go-to for assistance, and most are very passionate and eager to assist, but the help will be advice and guidance.
Your dev team will still have to do the dirty work.
The good news is that specialized ecommerce hosting providers have highly-trained support teams that can provide adequate and timely help. On the balance, the leading web hosts have better support than most SaaS platforms.
Now, to the costs, something every business must keep a keen eye on.
Open source software is free, but the hosting isn’t.
That’s one cost.
You’ll also have to pay developers if you lack technical knowledge.
As an ecommerce store, you’ll also have to be PCI compliant. An audit for PCI compliance can run into thousands of dollars.
You also need to consider the cost of your open source storefront tech stack. While the base platform may be free, you might need to incorporate other tools, each with its own cost.
The cost of having a domain is another consideration.
SaaS is all-inclusive. As stated, SaaS platforms usually come with hosting. They’re also PCI compliant and often offer a free domain with certain plans.
There are sometimes hidden costs though. Certain SaaS plugins may carry an additional fee. Additionally, a handful of solutions charge a percentage of each transaction.
Open source can be cheaper, but you’ll have to budget well, or your costs can add up quickly.
eCommerce SaaS might be more expensive, but the price is all-inclusive, and you can know what to expect to pay month to month.
This will make planning easier.
A Note on Vendor Lock-in
Vendor lock-in occurs when a company gets all, or most, of its tools from a single vendor, which becomes the foundation of its operation.
This makes it impossible for the company to migrate, without incurring great damages or costs.
They are, therefore “locked in” to the vendor. This is one of the main reasons big operations opt for open source. eCommerce SaaS solutions could spike their prices unexpectedly, be bought off, or even go under.
Or better tech could come along, and your SaaS vendor may not support it.
Anything can happen in the lightning-fast world of ecommerce, as tech speeds up.
When it comes to SaaS vs open source ecommerce, there are clear pros and cons to both. It ultimately boils down to what you want.
SaaS is much more convenient, and offers support and maintenance, but lacks deep customizability.
Open source will let you create whatever you desire, but it’s considerably harder to implement. The costs of both vary.
If you’re a smaller to a medium retailer, SaaS is probably your best bet.
If you’re a big player, open source is worth the investment.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.