Magento 2 Commerce vs Open Source: Which Edition to Choose?

You have finally narrowed down your ecommerce platform search to Magento. But even here you face the dilemma of which edition to choose: Magento 2 Commerce or Magento Open Source? Or maybe Magento Commerce Cloud?

Being 10+ years on the market and working on dozens of Magento projects, at Elogic we know the platform inside out. And we will break it to you right away: neither Magento edition is really any better or worse than the other. They just address different merchant’s needs.

What Magento 2 Commerce vs Open Source have to offer, what are the functionalities of the two, and which one is best for businesses of different scales — read more in this article.

Magento 2 Commerce vs Open Source General Overview

Magento Open Source edition (formerly Community Edition — CE) is a free self-hosted version of the platform with basic ecommerce features. It is oftentimes associated with SMBs for its affordable, easy-to-scale nature, although many enterprises successfully run on this edition too. For instance, one of our clients — a famous American activewear retailer Carbon38 — started out on Magento Open Source and developed many customised solutions on top of it.

Magento 2 Commerce (formerly Enterprise Edition — EE) is the platform for the enterprise-level stores. It is an exclusive paid version of Magento with premium features aiming at larger organizations and enterprises. In comparison with Magento Open Source, Magento Commerce has a number of native features that justify its $24,000 per year fee and add a lot of value for retailers (like page builder, B2B functionality, 24/7 email support, etc). For this reason, retailers continue using this edition even after Magento migration, which was the case with our fashion client Roller Rabbit.

Magento 2 Commerce vs Open Source in Details

There are some key differences between Magento Open Source and Commerce, which are not limited only to license costs. Here we analyze the main features of Magento 2 Commerce vs Open Source based on their functionalities. 

Read more: Adobe AEM Magento Integration: A Tandem of CMS and Ecommerce

Business Scalability

Magento Open Source has limited database scalability. So if your website outgrows the platform in terms of sales or traffic, you’ll most likely need to upgrade to Magento Commerce or migrate to another ecommerce platform. Magento Open Source also has more limited multilingual functionality, so you’ll need to install extra extensions and language packs if you plan to sell products internationally.

Magento Commerce offers a split database performance solution, which leads to more possibilities to scale. More specifically, this edition uses three separate master databases to manage different functional areas of the Magento store, like website checkouts, order management activities, merchandising, etc. depending on your needs. Since each database independently takes the load of your store’s functional tasks, your website performance and speed don’t suffer as you upscale. The speed of the checkout process remains at <2 seconds on average (after using caching or minification), and the hardware can handle 3.5M page views and 250,000 orders per hour. 

It’s also worth mentioning that Magento 2 Commerce supports multiple language and currency packages out of the box, so it will be easier for you to expand your business overseas.

Features

Magento 2 Open Source has basic features an ecommerce merchant might need. The main capabilities allow an e-retailer to get acquainted with Magento — as well as with the ecommerce website architecture for that matter — and include:

• Catalog Management;
• Marketing, Promotions and Conversion Tools (including integrated dotdigital marketing automation software);
• Customer Accounts;
• Integrated Checkout, Payment, and Shipping;
• Instant Purchase Checkout;
• Magento Global Shipping;
• Advanced Reporting powered by Magento Business Intelligence;

• Analytics and Reporting;
• Improved indexing, cart, and cache operations;
• Full Page Cache.

Magento 2 Commerce builds up of the aforementioned feature set and offers some more exclusive ones, like:

• Page Builder (formerly Bluefoot CMS) that allows for drag-and-drop content management;
• Advanced marketing tools, like custom promotions, customer segmentation and merchandising, email reminders, rewards points, store credits, etc.;
• Content staging, preview, and scheduling;
• Product Recommendations powered by Adobe Sensei to personalize offers based on customers’ behavior;
• Business Intelligence dashboards with 100+ ready-made reports;
• B2B functionality with price quoting and negotiation, customer-specific pricing and payment options, credit limits, and quick checkout, among others.

On top of that, Magento 2 Commerce comes with 24/7 support and an account manager to prevent technical emergencies and oversee your Magento Commerce store performance.

See more Magento 2 Commerce features here.

Even though the core features of the two editions are the same, Magento Commerce brings much more power and flexibility to the store. Magento 2 Open Source can surely be a perfect alternative for those who seek a basic feature set and can add extra functionality with extensions. But the enterprise-level performance and reporting of Magento Commerce allow an online business to scale more dynamically and take advantage of some unique features Open Source doesn’t have.

Hosting

Magento Open Source is a self-hosting solution. You can choose to host it on-premise or rent a server at a hosting provider. Hosting services, like HostGator or Nexcess, are a particularly popular option since you don’t have to worry about server maintenance and support, and the ecommerce hosting cost is quite low. On-premise hosting might pose a risk to your business scalability, though; you should consider memory limit and any other server configuration while choosing a hosting provider for a Magento Open Source.

Magento Commerce has two hosting options: on-premise and cloud-based. And the latter presents promising perspectives for upscaling. Magento Commerce Cloud is hosted by Magento on their AWS stack and can handle traffic spikes during high seasons. Cloud hosting is a favorite choice of all e-retailers who look to grow their businesses.

Pricing

Magento cost is what most retail companies look at when they are trying to make a choice between the two editions. And here comes the most convincing factor for many merchants: Magento Open Source is available free of charge. Magento 2 Commerce edition price is fairly high and ranges from $22,000 to $125,000 per year (the price depends on the additional features included).

The cost for Magento Commerce Cloud ranges from $40,000 to $190,000. Higher costs come with additional functionalities your business might need while growing and scaling. The cost for Magento Commerce Cloud also includes expenses on infrastructure. Check out the table below to compare Magento project estimation in numbers:

Security

Ever since merchants started experiencing issues with Magento 1 security, the platform vendor got extremely serious about patches and updates. All merchants turning to Magento 1 to Magento 2 migration services faced a difficult decision: whether they should secure Magento Open Source themselves or go with an advanced.

Magento Open Source includes basic security features present in all Magento editions. You can add a CAPTCHA protection, two-factor authentication, and strong password requirements; but that’s basically it. It’s not PCI compliant, so you will have to adopt either a third-party payment method that redirects you to another site to make the transaction (like PayPal, Authorize.net) or a SaaS PCI compliant payment method (CRE Secure). In any case, Magento Open Source requires an IT team for Magento support and maintenance.

Meanwhile, Magento 2 Commerce has more advanced out-of-the-box security protection. Magento Commerce seems like a more secure solution because

1. it’s PCI compliant, meaning that all credit card information is transmitted and stored in a secure environment. Magento Secure Payment Bridge and Payment Application Data Security Stand (PA-DSS) support ensure top security of the platform on both ends.
2. action logs keep a record of every change made in your store. The logged information lists the name of the user, the action, and its outcome, and the IP address and date of change.
3. file system ownership will allow you to grant the appropriate permission levels to users building your store.
4. user data is thoroughly encrypted thanks to AES-256 and SHA-256 hashing.
5. 24/7 technical support and an account manager constantly monitor Magento Commerce websites for possible attacks and online frauds.

If bought as Magento Commerce Cloud (a subdivision of Magento Commerce), it offers an extra layer of security thanks to a shared responsibility security model, Fastly WAF that prevents malicious traffic from entering your network, and DDoS services. 

Increased security of Magento Commerce (and Commerce Cloud for that matter) is a convincing option for those merchants who have too many business operations to streamline and too many customers to handle. This mighty system will help you withstand any hacking attacks and protect your business, partners, and clients from online frauds.

Magento Open Source, on the other hand, will need more manual maintenance and support on the part of a Magento development agency.

B2B functionality

B2B functionality is the most significant characteristic that differentiates Magento 2 Commerce from Open Source.

Magento Open Source has no B2B functionality. Period. Full stop.

You can use a Marketplace extension and convert your store into a marketplace, but Magento Open Source is primarily a B2C ecommerce platform.

Meanwhile, Magento Commerce has developed a breakthrough B2B & wholesale suite for complicated commercial processes and elevated customer care. This B2B functionality was actually so successful that it turned the whole Magento platform into a leader in 2020 Gartner Magic Quadrant for Digital Commerce Platforms:

Processes in Magento Commerce can be managed straight from the Admin panel:

1. You can easily view, edit, create multiple invoices, manage quote requests, and negotiate pricing with customers.
2. You can personalize price lists and control which customer groups can access certain areas of your product catalogs.
3. Instant purchase function will ensure fast, frictionless ordering & reordering for common purchases.
4. A merchant can create customizable emails for account updates, password resets, email notifications, and RSS feeds with order status at ease.
5. There is a “Contact Us” form straight from the box, so the merchant can stay in touch with the customer at all times.

If you’re running a B2C business, Magento Open Source is your pick. If your business is B2B, consider Magento Commerce to streamline your operations.

Which Magento Edition Is Right for Your Business?

The choice of Magento 2 Commerce vs Open Source depends on your budget and plans.

The ideal merchant of Magento 2 Open Source is a small to medium-sized business (SMB), a startup, or a small store which 

• is not planning to scale in the nearest future; 
• requires the basic ecommerce features to streamline business operations;
• will appreciate an opportunity to integrate third-party systems or modules, if needed;
• has a limited budget but seeks a flexible, easy-to-customize ecommerce platform.

Magento 2 Commerce suits B2B businesses and large market players who

• plan to sell internationally (or are already doing it);
• experience high-load traffic and high sales turnover;
• require advanced marketing and promotion functionality (with wish lists, rewards, discounts, subscriptions, gift cards, and private sales);
• want to ensure higher online security — both for their business and for the customers;
• seek a flexible option to adjust pricing, issue invoices, and manage complex shipping for business customers.

Overall, Magento Open Source is a good platform for ecommerce tryouts. It will allow you to run your store with the bare-bone functionalities, customize it to your likings if needed, and see if you should invest in something more advanced like Magento Commerce. Apparently, you can expect much more from Magento 2 Commerce in terms of functionality and security. It will ensure a faster growth for your online business operations, which you’ll have to pay a fair price. 

By and lange, each Magento edition can satisfy ecommerce needs of all retailers and manufacturers. Choosing Magento itself means you’re investing in a flexible, customizable platform that will last over the long haul. Your choice of a Magento edition, in the meantime, should be guided by your present business plan and scale.