E-commerce is the one of the fastest growing business sector in India, with online business volume expected to grow by a fantastic 18.3% i.e. to USD 1.8 Trillion in 2016. With the e-commerce environment in India maturing, it is critical for businesses to assess the best possible route for access and adoption of software products in order to boost their bottom-line. Technology is at the centre of bringing your products online. Among three major options available today (SaaS, Open Source, & Licensed Software), which to choose? Letâ€™s compare all three and help you make that decision!
Before we begin with comparing all three options, let us define what each of them mean.
- SaaS as eCommerce solution
Â Software as a Service (SaaS) is now making significant inroads into the affordable software space for small online enterprises. SaaS implies purchasing the right to use a software, as opposed to purchasing the software outright. It is a cloud based service and through SaaS, generic e-commerce tasks such as invoicing and sales can simply be deployed on a web portal. For example, Shopify, Purple Stores, Kartrocket are few players in this regard.
- Â Licensed Software as eCommerce solution
This is a means of acquiring software, i.e. you have to purchase a license to use the particular software, either by installing it on one or more (depending on the type of license granted) system or through third party vendors. For example, IBM Web Sphere, SAP Hybris, Demandware etc are licensed software for ecommerce that can be bought online
- Open Source Platform as eCommerce Solution
Which Is Best For Ecommerce: SaaS, Licensed, or Open Source Software?
To evaluate which of the three work better for your business, we list hereon the advantages and disadvantages of all three.
SaaS eCommerce- Pros and Cons
Advantages of SaaS
- Manageable by non-techie – The best part of employing SaaS in the business is that, it can be easily managed by a non technical person. SaaS applications are easy to install, operate and manage. Â Companies like Purple Stores train their clients from uploading products to making sales for online ecommerce venture.
- Cheaper and faster â€“ SaaS based applications require no hardware and can be set up in a few hours and the applications are ready to use as soon as you subscribe. Additionally, an e-commerce vendor pays only for what they use, so even operational cost is kept optimum. A feature rich Saas platform will start ranging from Rs 1000-1800 per month.
- Usage is scalable – for instance if you need to add storage or additional services on your e-commerce portal, such as a wish list widget, you can access these on demand without needing to install new software or hardware;
- Automated Updates – whenever there is an update, it is available online to existing customers, often free of charge. Â
- Cross Device Compatibility – SaaS applications can be accessed via any internet enabled device, which makes it ideal for e-commerce vendors to target their mobile target market, and those who donâ€™t always use the same computer;
- Accessibility from any location â€“ As an e-commerce entrepreneur, you can access and manage your online store from virtually anywhere, and so can your customers;
- Applications can be customized and white-labelled â€“ some SaaS applications allow you to customize it to suit your branding needs for the your business;
Disadvantages of SaaS
- Security – As SaaS applications work through the cloud, the data for your e-commerce business is stored on the cloud as well, and if security precautions are not taken, may become an issue;
- Transaction Time Lag â€“ Since SaaS is cloud based, for transactions to reflect, it may take more time as compared to the traditional approach. If your e-commerce business depends on response times in milliseconds, SaaS may not be the answer;
- Switching between SaaS vendors may be time consuming â€“ If you intend to change the SaaS vendor, it may be a time consuming process, which is out of your control. This may cause down time for your e-commerce portal.
Licensed eCommerce-Pros and Cons
Advantages of Licensed/ Installed Software
- Flexible â€“ As it is installed on your system, licensed software allows for stronger and more in-depth integration with other IT and operational systems. For example, IBM WebSphere Commerce offers complete enterprise level solution for ecommerce businesses, and is greatly customizable based on your requirement;
- Control â€“ Licensed e-commerce software allows a higher degree of control, and would work well for businesses needing very specific features and tasks from their software application. Additionally, having direct control of the software allows safer transactions.
Disadvantages of Installed Software
- Expensive â€“ Licensed software generally is quite expensive. IBMâ€™s WebSphere for example may cost upwards of USD 30,000, and may not be viable for ecommerce SMEs.
- Hidden Costs â€“ Costs like maintenance fees, installation and configuration, hardware, and employment of IT personnel are not factored into the software cost, and generally add up to make licensed software quite expensive for small ecommerce businesses;
- Complicated â€“ Licensed software is not as easy to use, operate and manage as the plug-and-play SaaS applications. Unless the entrepreneur is tech-savvy, installing licensed software will require you to hire an IT professional or an IT team to manage the software.
- Longer installation time â€“ Once you have bought the software, getting it to work as you envision takes time. This will affect the start-up time for new ecommerce ventures.
Open Source eCommerce- Pros and Cons
Advantages of open source
- Free â€“ Open source is free and freely available. So as an ecommerce vendor starting an online business, open source reduces the initial software cost to zero;
- Flexibility & Compatibility â€“ Open source software can easily be modified to suit the e-commerce requirement and this flexibility makes it compatible with SaaS based and licensed software that the ecommerce website may be using for a specific purpose. For example, AgoraCart is an open source ecommerce shopping cart which can easily be customized to run on an ecommerce website;
- Large Knowledge base â€“ As open source software is free, choosing a popular one will allow the entrepreneur access to a large knowledgeable community which the entrepreneur can have access to troubleshoot issues or learn how to customize the software to their liking;
Disadvantages of open source
- Not easy to use â€“ Since its free, its not simple to use and often ecommerce entrepreneurs who are not tech savvy will need help to customize, install and operate such software;
- No Support â€“ While there is a large knowledgeable community, since the software is free, the entrepreneur will often have to seek paid professional assistance to navigate any issues the software develops;
- Time Consuming â€“ since there are a lot of open source software, an ecommerce entrepreneur will have to spend considerable time to ascertain which one he/she wants to implement;
- Require Customization â€“ Open source software generally is not made for one specific purpose in mind, and therefore will require the entrepreneur to customize it to the specific purpose which might dig your pockets.
And The Winner Isâ€¦
So which model is right for you? It really depends on your needs. How important are the following: time to market, customization, security, short and long-term costs and remote access? That being said, in general terms of cost effectiveness, dynamism and access, SaaS clearly comes out on top as there are no setup costs with SaaS, as there often are with other applications. It is scalable with upgrades available on demand and is compatible across all internet enabled devices.
For your new e-commerce venture, SaaS is the way to go! SaaS companies likeÂ Purple stores give you a convenient yet affordable platform, guidance and consulting to sell your business online and to be a part of this new changed world.
For any query on taking your business online, give usÂ buzz atÂ firstname.lastname@example.orgÂ or ring us at 09990117888.