Magento 2: The Story
As a Magento Gold Solutions partner, we first heard Magento 2 mentioned in 2010. At that time, the release was slated for the end of 2011; ultimately, that didn’t happen, due to some major goings-on behind the scenes. The parent company eBay bought 49% of Magento in early 2011, and then the rest of Magento later that year.
Under eBay’s direction, the company turned their focus away from Magento 2 in favor of concentrating on the Order Management piece of their business. They made a half-hearted effort at creating an ecosystem called “X.Commerce,” which quickly flopped. Conjecture around the two camps suggests that eBay all but shelved Magento 2 in favor of other projects while they owned the company.
Work must have continued though, however slowly, because the Magento 2.0 Release Candidate (RC) debuted to the Magento developer community on November 17, 2014. The reviews were mixed. Many of the most common issues with Magento 1 were solved, but Magento 2 came with its own set of problems. It was difficult to install. General product speeds were lacking. New training was needed for almost all parts of the platform, and extensions were harder to port over. The consensus seemed to be that developers were unimpressed, particularly considering that the product was launched 4 years after its first mention.
But again, wider forces were at work and big changes were in store. In mid-2015 after a public divorce between eBay and PayPal, eBay sold Magento to a group of investors who in turn, relaunched Magento as an independent business.
They got down to business quickly. Late last year, the production version of Magento 2.0 was finally released. While version 2.0 had a long gestation period and a not-so-easy entry to the eCommerce world, as an independent entity again Magento has worked hard to get feedback and resolve developer concerns. Earlier this spring at the Imagine 2016 conference, leadership made huge steps to ensure that merchants will have a great experience.
Magento 1: The Context
Magento 1 was released many moons ago, way back in 2008. Originally introduced as an open source platform, Magento set its sights on small and medium-sized businesses, or SMBs, right out of the gate. Their careful aim paid off; over the past 8 years, the platform took firm control of the SMB eCommerce industry. Now more than 25% of worldwide eCommerce shops run on some version of Magento.
With three editions now in use—Magento 1 Community Edition (CE), Magento 1 Enterprise Edition (EE), and the newly-minted Magento 2—this platform offers almost infinite levels of scalability and control. Its open source foundation has allowed for the rise of a entire community of developers and dev shops that continue to build innovative extensions, themes, and other features. Magento filled a hole in the market by catering to businesses that wanted a solution they could control, one they could customize to their specific needs and even host themselves if they wanted. It’s safe to say that Magento 1 carved out an amazing niche for itself.
**Features here are a mix of Community and Enterprise edition. Some features are only found in Enterprise and some are coming soon.
At Ecomfoster we were initially hesitant to have our merchants consider Magento 2; call it “No one wants to be first to the party” syndrome. As I pointed out earlier, Magento owes a good part of its success to its flexibility and customization capabilities, and until recently, the extension marketplace for 2.0 was still woefully lacking. Even with its improvements over Magento 1, the product didn’t wholly suit our clients’ needs out of the box. Costs would have been immense to recreate features that were easily provided by simple extensions in Magento 1.
Well, the release of Magento 2.1 has changed that. Hot on the heels of Magento 2.0, Magento’s head of product management, Paul Boisvert, announced this newest version during Imagine in March. This release aims to fix some core bugs, provide security updates and patches, and add new features for merchant use.
While Magento devs and partners heaved a sigh of relief, this announcement also uncovered another interesting shift: these new features, including Elastic Search, Content Staging, and in-site PayPal/Braintree payments (so the customer never has to leave your site), will only be available for the Magento Enterprise version. In an attempt to monetize its most sought after features, they’ve split the feature sets to drive more merchants toward this new, improved Magento Enterprise 2.1.
The pricing for Enterprise has been a hot topic for the last 8 months. With the release of 2.0, Magento ditched the per-license pricing model that proved so popular with Magento 1, in favor of implementing a new, revenue-based model instead.
The new pricing structure is based on tiers of gross merchandise volume (GMV). This strategy is extremely beneficial for larger brands managing around high-volume sales periods and spikes in site traffic. With this new structure, merchants aren’t penalized for spinning up new servers to handle this “Shark Tank”-type load; they pay one fee.
Lots has been said already about this new pricing structure, which carries some fairly weighty pros and cons. Perhaps the most important thing for merchants to keep in mind is this: Merchants who tie multiple web properties (think B2B & B2C sites, Web Portals, etc.) into one installation could be looking at a pretty large fee for their Magento Enterprise license. Still, Magento 2 has been touted for increasing speed to market (via certified development partners like Ecomfoster Interactive), which will ultimately lower costs for merchants over the long haul.
With its improvements to native functionality and the availability of over 350+ extensions, we are now recommending Magento 2.1 for many of our eCommerce-only and multi-channel retailer clients. Magento 2 is a great option for SMBs looking to take the next step in the Magento ecosystem. If you have a dedicated team of 1-3 employees and can sustain $2 million or up, Magento 2 is a valuable solution. And if you’re a merchant currently on Magento 1.0 who fits that bill, you should start thinking about migrating to Magento 2 within the next 18 months. Magento has stated that they’ll continue supporting version 1 editions for an additional 3 years.
Our only remaining concern surrounds third-party integrations with ERPs and CRMs. But by presenting a listening posture and releasing 2.1 so quickly, Magento has proven its drive to hear out and then address partner concerns. They’ve already begun taking steps to address this problem for merchants who need this centralized data functionality. I can’t reveal too much about the overall future of Magento, but I do know Magento leadership has strongly hinted at huge B2B offerings, world-class eCommerce feature sets, and innovation at a rate that would make any retailer’s head spin. Altogether we’re optimistic, and still proud to be a certified Magento partner.
We’re not the only ones. Magento 2 can already boast 240k downloads of Magento 2 Community and Enterprise editions, 800+ active eCommerce stores, and 100+ trained solutions partners. (And of course, Ecomfoster Interactive is Magento 2 Certified). As a merchant who is using Magento, or even one who’s considering it, you can be sure that Ecomfoster and other partners will be here to support your business.
Questions or opinions about Magento 2? Let us hear them in the comments!