Why Magento Go Failed

Magento Go‘s failure was inevitable, and merchants need to understand why to minimise their pain in the future.

eBay recently announced that they’ll pull the plug on Magento Go & ProStores, their SaaS e-commerce solutions. 10,000 merchants will need to find a new house by 1st Feb 2015.

eBay partnered with Bigcommerce to migrate those clients. However, the migration can be disruptive for small merchants with limited resources available. Think of the impact on SEO ranking, learning a new platform, bespoke configurations, investments on API-based integrations, to mention a few. It will be frustrating in the short term to say the least.

Why did that happen? Even eBay needs to focus on key products. They’ll continue their investment and support of the Magento Community and Enterprise Editions, which is used by over 220,000 merchants and growing. The Magento Community feels that Magento Go was a distraction from the core platform. This sentiment is amplified by a long overdue version 2 of Magento. A well regarded Magento Partner Agency said “They’ve never focused on Go for a single minute, I don’t believe it’ll make them better by removing it”.

When eBay acquired Magento in 2011, I thought they would replace the infamous ProStores with Magento Go and tightly integrate it with eBay / PayPal. Magento was at the core of the eBay’s X.commerce strategy, which was a flop. But that is not the reason why Magento Go failed.

Here is why Magento Go failed.

First, Magento gave online retailers freedom! Freedom to own a powerful e-commerce platform and to customise it the way they want with the help of a vibrant eco-system. SaaS platforms such as TicTail, Shopify and Bigcommerce for smaller retailers, Venda, Demandware and Hybris for larger ones, provide a compelling solution with predictable costs, by removing headaches typically associated with running an e-commerce platform. With SaaS you rent a platform, you’ll be constrained by the level of customisation allowed and be locked-in. Magento Go did not provide the freedom that made Magento so popular and did not hold true to the principles of open source.

Second, Magento Go was too complex for someone wanting a simple shop, and too limiting for someone who really wanted control over their retail presence.

Third, running a SaaS business is different from running a product-led one. SAP is the best example, for years they struggled to make the switch to SaaS.

SaaS e-commerce can be a dead end for growing retailers, but the leap from SaaS to DIY is impossibly large. The Freedom and ownership provided by the DIY approach comes with a high price tag attached and lots of headaches.

Is there a better way?

Of course there is! Look at the Content Management System (CMS) industry to find a thriving and better served market. For years AcquiaWP Engine and VIP by Automattic, have provided easy to use, cloud-based solutions to manage open source platforms Drupal and WordPress, which worked extremely well.

At Akoova we recognised that the e-commerce industry has missed the opportunity of providing the best of both worlds, SaaS and DIY, the flexibility and control online retailers need to drive revenue, with the simplicity of deployment and management that “as-a-Service” delivers. We believe there is much more to be done to fully harness the power of Open Source.

Disclosure: Osvaldo Spadano is co-founder, former CTO and share holder at Venda.

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