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Magento is a long-standing leader amongst mid-market and enterprise eCommerce platforms. However, deciding between Magento’s available software licenses can be challenging, even for experienced eCommerce insiders. 

What are the Magento software licensing options?

First, there’s the more popular Magento Open Source. This free version of Magento used to be known as Magento Community Edition (CE). Then, there’s Magento Commerce, the paid version of the platform, which was formerly known as Magento Enterprise Edition (EE). 

In 2018, Adobe acquired Magento and has since been hard at work to increase revenues.  This has led to their sales team, collateral, and partnerships focusing more heavily on the paid version of the software, while the free version remains more beloved and highly recommended across the Magento ecosystem. 

What are the Pros and Cons of Magento Commerce?

Magento Commerce Benefits

• Magento Commerce includes a wide range of additional modules, adding native features from a PageBuilder tool, to retail features like gift cards and reward points. There are even B2B features like requisition lists and custom quote requests.
• Magento Commerce users get early access to some releases, including standalone bug fixes and security patches.
• Ticket support is included with these licenses.
• You have the option of trying out Magento’s proprietary cloud hosting product.

Magento Commerce Cons

• Annual licensing fees in the tens of thousands of dollars. This can tie up vital dollars that could otherwise be used for website customization, marketing, and other growth opportunities.
• Support is known for being slow and generic. The Magento support team does not know the idiosyncrasies of your unique website. Most solutions will come from your developers and web host.
• Magento’s cloud hosting is minimally supported, and does not compete with the flexibility, scalability, or other benefits of a dedicated hosting provider. Many merchants and developers alike wished they’d pushed harder for the “Magento Commerce On-Prem” option instead of the “Magento Commerce Cloud” version so that they could choose their own hosting provider, and many simply migrate hosting as soon as their contract is up for renewal.
• If you decide that you’d like to downgrade to Magento Open Source, you’ll have to pay out your Magento Commerce license. Should you need more time to migrate off of Commerce, you’ll likely have to pay for another year of licensing.
• Many Magento Extensions cost more to purchase for use with Magento Commerce than Magento Open Source. Sometimes, the price is multiple times more.

Magento Open Source Pros

• No licensing fees or commitments.
• Instead of getting lots of bundled modules with Magento Commerce, some of which are not particularly robust, you can choose the handful of best-in-class Magento Extensions that you really want.
• There is no minimum or maximum size for using Magento Open Source, and no contract renegotiations to worry about as your business evolves. Magento Open Source is used by SMB and Enterprise users alike quite successfully.

Magento Open Source Cons

• If you’re truly going to use enough of the features and functionalities that come with Magento Commerce as-is, you can potentially save time and money when compared with purchasing, installing, and maintaining standalone extensions, or writing custom extensions.

How to choose between Magento Open Source and Magento Commerce?

It’s easy to get caught up in hype and sales pitches. However, if you pull in your finance experts to help and ask the right questions, it should be relatively easy to sort through.

First, consider how much you’ll spend in licensing fees over the years, including potential increases that may come up at renewal times. Include estimates for customizing Magento Commerce modules to meet your specific needs. 

Second, create a spreadsheet with all of the Magento Commerce features that you’re confident you’ll use. Create a column for the cost of a Magento Extension, customization, or other estimated costs for adding these features to Magento Open Source.

Now you’ll be able to more easily compare the cost of Magento Open Source vs. Magento Commerce. You can, of course, balance in support and any other benefits offered with Magento Commerce. 

The results of this exercise are often surprising. Some large merchants will find that for what would have cost them $300,000 in licensing over the course of 5 years, they could have met their needs for under $100,000 with some extensions and custom development. On the reverse side, there can be medium-sized businesses that find that they intend on using so much of the Magento Commerce functionality, that the license will easily pay for itself.

This decision should be logical and straightforward. Once you realize that over the lifetime of the license, you’re looking at a six-figure expenditure, it becomes easy to sit down and do the math to make sure you’re making the right choice. In some cases, the Magento Commerce sales team will even help prove the value of the license by participating in this activity. One of their primary roles is, of course, to prove the value of the Commerce offering to you. 

When in doubt, talk to a Magento agency, consultant, or other experts that specialize in both Magento Open Source and Magento Commerce, and don’t have a vested interest in which selection you make. Magento Marketing experts, like the team at Wizard Digital, can provide valuable insights as well since they’re accustomed to helping businesses like yours invest wisely into your long-term growth.