Cloud and self-hosted solutions
The main cloud eCommerce platforms are:
Self-hosted eCommerce solutions come in many forms and with different features and price points. There are free eCommerce plugins for WordPress websites like WooCommerce that can be installed and set up by any tech savvy business owner or manager. There are fully featured eCommerce platform like MagentoEnterprise Edition that may cost a low five figure sum for a licence and require software developers to configure, customise and deploy.
Cloud solutions offer most of the basic features needed for a customer to find and pay for a product online and for a business owner with minimum technical know-how to run an online store.
Cloud solutions come with different features but also have their limitations. For example, cloud eCommerce plans offer a fixed number of design templates to suit branding and page layout requirements. They may limit the number of products that can be sold or cap the number of payment methods offered. There may also be limits to the amount of traffic the site can handle in any given subscription period.
A self-hosted solution may not have as many restrictions. The only limits with a self-hosted solution are the terms of your eCommerce software licence, your technical ability or development budget ,your hosting resources and the agreement you have with your Internet Service Provider (ISP). Self-hosted solutions can be upgraded or scaled to offer extra features or functionality in a way that may not be possible with a cloud solution.
Enterprise level eCommerce solutions, which are likely to have the most sophisticated functionality, may allow access to the computer code behind the “out-of-the-box” software. This allows software developers to build a customised experience for customers with advanced functions for administrators, but this may come at a cost that only larger companies can afford.
For many smaller businesses, cloud eCommerce solutions may provide a good starting point for eCommerce with enough basic features. For other businesses, the limits placed on the website design and web traffic or the need for very specific features not offered by a generic hosted shopping cart may lead them to choose a self-hosted solution from the start.
Cloud eCommerce pros and cons
The pros of cloud eCommerce are:
- No capital expenditure as cloud eCommerce is subscription based
- Most sites can be set up by an individual who is a little tech savvy so there is no need to pay for a developer or eCommerce specialist
- Technical support is generally of a very high standard
- No upgrade fees or maintenance charges, as the provider upgrades the software in the background with no interruption to the service
- Cloud eCommerce solutions are secure as all the security features are handled by the provider. SSL security certificate and industry standard processing of payment cards (PCI-DSS compliance) are included in the subscription fee
- Many cloud service providers can handle peaks in traffic caused by seasonal traffic or special promotions
The cons of cloud eCommerce are:
- Cloud eCommerce solutions do not support very customised websites with unique branding and advanced functionality
- They may not scale to meet the growth you plan for your business over the long term
- If a cloud solution provider goes out of business or removes a feature that your business depends on, there is nothing that you can do about it and it may devalue your investment in eCommerce
Self-hosted eCommerce pros and cons
The pros of self-hosted eCommerce are:
- You have the flexibility to create a customised web store with unique branding and advanced functionality
- Solutions are scalable and can grow with your business to handle large volumes of products and transactions from a growing customer base
- New features can be added “off-the-shelf” through the various “extensions”
The cons are:
- Costs, which can run to as much as several thousand euro a year for some providers
- Potential security issues if you use an open source or ‘free’ shopping cart. You need to be vigilant that the software is well maintained by the developer, in widespread use and has no security issues
- You will need to find a hosting solution which will involve additional costs, depending on which type of hosting is needed for the chosen eCommerce solution. Unlike a cloud solution, the self-hosting solution you choose may not deal always with seasonal peaks in traffic if you do not explicitly specify these when buying your plan
- Most businesses will need the services of a web developer to create a branded website, choose extensions and implement required features, as well as test and deploy the eCommerce website in its hosting environment. This may be more costly than the cloud solution
- You will need to buy a maintenance plan from your developer to make sure that the eCommerce software on your site is secure and up-to-date. You may also need to upgrade the software from time to time. This could result in downtime for your site
- There are extra costs associated with taking personal information and processing payments with a self-hosted site. Most online shoppers will expect you to comply with the security standards offered by other eCommerce websites.
For a self-hosted site, some of the key cost considerations are as follows:
- Design and development: you may need a developer to:
o Customise the visual layout and design
o Help you choose features, plugins and extensions
o Integrate payment gateways into the site
o Integrate the site with back office systems line order management and CRM systems
o Setup and manage the website hosting environment. This may be expensive, depending on the hourly rate charged by the developer and the amount of time involved
- Cost of licensing: even though you may choose a free eCommerce plugin like WooCommerce, the features you might want to add may involve installing commercial extensions that cost money and need updating and maintenance.
- Security: you may need to add additional security features to your site. For example, an SSL certificate is a small data file which adds the secure layer to communications between your eCommerce server and the customer and is normally indicated by a padlock in the address bar next to the website address. SSL certificate costs can vary depending on the level of security required and number of domains covered.
- Hosting requirements: choosing the right hosting plan for your eCommerce site is essential to ensuring that the hosting has the capacity to deal with your customers. In order to make the right choice, you may need to estimate how much traffic your site will have, both peaks and troughs.
- Maintenance costs: Keeping your website up-to-date and secure may mean that you have to enter into an annual maintenance agreement with your developer.