Earlier this year ecommerce software maker Magento revealed an unusual tie up: Though many of its customers are dogged competitors with Amazon, it decided to offer a version of its software that runs in Amazon’s cloud, Amazon Web Services.

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It was a long journey to get there. When Magento was initially released in 2008, it was open-source software meant to run on-premise, on the user’s own servers. Eventually it also offered an enterprise version, again on-premise, for larger and more sophisticated customers.

Magento later created a multi-tenant SaaS version of itself known as Magento Go. That version allowed users to work with the software with little more than a web browser. But it also meant that it was not very easy for them to customise the software to their needs because customers could not change the raw code like they could with the on-premise version. Magento Go was discontinued last year.

Mark Lavelle, CEO Magento
Mark Lavelle, CEO, Magento

“I think we learned who we were. What we are is not a multi-tenant SaaS company trying to build a single application that a lot of tenants can come and join. What we are is a software company that allows for a really unique ecosystem to take our product and build really creative things with it,” Magento CEO Mark Lavelle told Which-50.

The beta version of Magento Go was released before Magento was acquired by eBay in 2011. (It has since been spun out and is owned by a private equity investor.) Under eBay’s direction, Magento focused on distributing both the open source and enterprise software for clients to run it wherever they wanted.

“As it turned out, where they wanted to run it was in the cloud,” Lavelle said.

Users still wanted to be able to modify the software, but they did not want to manage the infrastructure themselves.

Magento noticed. It bundled together all the various pieces its customers were using in the cloud and decided to offer them as a managed service so that customers don’t even have to deal with setting things up in Amazon. It’s not quite SaaS, but it lets Magento’s customers use its software without having to deal with physical machines or even the sometimes tedious work of tuning up an Amazon account.

“It’s not just about building web sites. It’s about having that catalogue, your customer database, your inventory, and have that all be ready where your customer is, and then still control the checkout experience and fulfillment and complete that picture,” Lavelle said. “You can do that in your own environment. You can put servers up. [Or] you could do it in something like a Rackspace, or you could do it in a public cloud like Amazon. We are there to support you no matter what.”

The ability to customise the platform without having to worry about hosting is what convinced Alex Barbier, digital marketing director of Oliver Sweeney, to implement Magento’s cloud edition.

In July 2015 Barbier began searching for a new ecommerce platform for London-based footwear retailer Oliver Sweeney and was faced with a choice between two types of software — a SaaS platform or a more traditional platform — before settling on Magento’s cloud offering.

“I have the best of both worlds: the flexibility of the traditional platform and the infrastructure of the SaaS platform,” Barbier said during a presentation at MagentoLive in Sydney last week.

Both Saas and traditional solutions had their pros and cons, Barbier explained.

“If you look at SaaS it’s all great. You don’t think about infrastructure, you know the web site is running, as a merchant you can launch a promotion and have more traffic and the traffic will come and the web site will still be running. You don’t have to think about upgrading the code because the code is upgrading as you go,” he said.

“But, when we started talking to the SaaS providers we quickly found out that there was a big word I was going to have to accept if I was going down that route: compromise.”

Barbier said he wasn’t prepared to compromise. When you charge up to $500 for a pair of shoes you need to be able to deliver on the customer experience.

A more traditional platform, which allows for a higher degree of customisation, has a different problem: as soon as you finish re-platforming you begin to start thinking about when you need to re-platform again, Barbier said.

For Oliver Sweeney’s three-person ecommerce team, “every minute we spend on replatforming is a minute we spend on not driving sales.”

Since launching the new Magento site, Barbier said both the conversion rate and traffic are higher.

“In my opinion it is the best of both worlds because I’ve got an infrastructure that is up and running, I know the web site will cope with high traffic volume. On the upside I have all the flexibility of a traditional platform where I can do bespoke development,” he said.


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