You’re in the market for a car and you have three options: 1) a free car 2) a new, luxury car, or 3) a new, luxury car with tons of horsepower with an extended warranty and the highest safety rating.
Which one do you go for?
Merchants looking at Magento as a potential platform to build their store have the same dilemma. In this article, we will cover Magento costs across the three different Magento versions: Open Source (the “free” car), Commerce (the luxury vehicle), and Commerce Cloud (the more powerful, stable, and secure luxury vehicle).
You’re probably thinking — what dilemma?! Free is free, so Magento Open Source is the obvious choice. Well, it’s not that simple.
Another obvious response is — it depends on how much money you currently have. But there are a few big BUTs:
Enough with the car talk, let’s look at Magento license costs!
The Magento software cost for the Open Source version is $0. You can download it for free, modify it, edit any files, and code all you want, and host it absolutely anywhere.
Open Source has tons of features, some that aren’t included in more pricey competitor offerings. But as we will see later, the total cost of ownership may be higher compared to the premium Commerce and Commerce Cloud options.
Magento Commerce, formerly known as Magento Enterprise Edition is one of the leading ecommerce enterprise platforms on the market.
Most ecommerce agencies and sources state that Magento Commerce costs a minimum of $22,000 per year ($1,833 per month). This number is prone to increase depending on two factors: Gross Merchandise Value (GMV) and Average Order Value (AOV).
Here are the definitions of both values directly from Magento:
“Gross Merchandise Value” or “GMV” means the total value of all transactions processed through a Site during any given Contract Year, excluding (a) any shipping, handling and customs costs charged to End Users; (b) any taxes Customer collects from End Users as part of any Transaction; (c) any financing charges and interest for installments charged to End Users.
“Average Order Value” or “AOV” means the quotient of (a) the GMV for any given Contract Year; (b) the number of transactions during the same Contract Year.
Hint: quotient means dividing (GMV divided by the number of transactions). The easiest way to think of this is the average amount of money a customer spends on your site.
As stated in the Magento Commerce Software License Agreement, the Magento license subscription fees are based on the GMV and AOV thresholds provided by the merchant. These fees are subject to change if the GMV for a given year is higher than the threshold.
So to get the exact cost for the platform, you’ll need to contact a Magento sales representative.
Magento Commerce Cloud is the ultimate Magento experience.
You get all the features that come with Magento Commerce: advanced content creation with Page Builder, Magento’s B2B and Business Intelligence tools, Progressive Web App Studio, and much more.
Plus, you get all the benefits of the cloud — lower maintenance and support costs, a fast and stable website, and shared security responsibilities between Magento, Amazon, and your team.
Many sources state that Commerce Cloud starts from $40,000 per year ($3,333 per month) and increases in price depending on the same factors (GMV and AOV).
The table below emphasizes why the free Open Source version is more expensive when it comes to the total cost of ownership.
|Magento Monthly Cost||Magento Open Source||Magento Commerce|
|Maintenance||Higher||Lower (especially on cloud)|
|Infrastructure||Higher||Lower (especially on cloud)|
|Tools and Plugins||Higher||Lower|
|Vendor Management||Higher (if multiple developers, infrastructure and support providers)||Lower (one vendor)|
To reiterate, if you want to know the exact price of Magento Commerce and Commerce Cloud, contact Magento or, if you want, we can help fast-track the process and put you through to a Magento sales rep.