written by Alain Veuve MD, Switzerland
Will Shopware replace Magento in the small enterprise sector?
Will Shopware replace Magento in the small enterprise sector?
October 16, 2015 | Categories: E-Commerce
About author Alain Veuve Alain Veuve MD, Switzerland

In the past four years Magento was the dominating shop system. In Europe, and especially in Germany, many small agencies have specialized in Magento and TYPO3. Their solutions often include both products and offer customers a broad-based, mature functionality at a relatively low price.

More and more agencies are switching to Shopware

What I’ve learned during recent months in conversations with owners of smaller agencies is that more and more of these agencies are turning away from Magento and working with Shopware. For one, implementing and integrating Magento is far more costly and difficult for this teams that, as a rule, are usually smaller. This complexity is mainly inherent in Magento itself. On the other hand, Shopware can be implemented with far less effort, leading to cheaper prices for the merchants.

Costs as an important factor for SMBs

Costs have always been and will continue to remain an important factor in the SMB market. Whereas large companies set budgets within the framework of an investment calculation based on the expected return, the budget of smaller customers usually depends on many more items: Comparing investments in similar areas (where “similar” can already be something like an internal mail server), the current “gut feeling” of the person responsible, an investment calculation – of course, or simply the statement of a sponsor at the C-level (yes, exactly the same sponsor who can implement the entire corporate website using WordPress in four languages for eight countries in just two days).

Enterprise! Enterprise!

In the past years, Magento has made strong inroads in the enterprise sector. And it worked – though many didn’t think it would at first. At AOE we regularly win large E-Commerce platform projects with Magento Enterprise. Magento’s competition consists of the traditional enterprise E-Commerce solution such as Hybris, Websphere, Demandware, etc. The acceptance by large companies for Magento has never been higher. The main reason for this is that, compared to the competition, many issues can be solved more elegantly and simply. But, another deciding factor is that the license costs for Magento are lower.

Forgetting where you come from

While positioning itself in the enterprise corner in the past years, Magento sometimes forgot that it has its roots in the SMB sector, which made the rocket-like ascent of Magento possible in the first place. The large SMBs were the first companies to buy the Enterprise Edition and product innovation was chiefly driven by thousands of small merchants. The fact that Magento zeroed in on Enterprise – both commercially as well as in all communication efforts – alone created the breeding ground for other solutions such as Oxid or Shopware. This might not apply to the US, but definitely to DACH. In the meantime Magento once again has initiatives that are dedicated to the SMB sector – e.g. the entire SMB Sector with blog.

SMB, who cares?

Now, Magento could be rather indifferent about all of this. After all, there isn’t a lot to be gained in licensing fees in the SMB sector – and yes, this might be true. But this point of view is far too shortsighted. Why? Because it is exactly this large base of small customers that drives product innovation. And, something I’ve often experienced, a customer that starts small might grow rapidly and later on develop into a full-sized, mature enterprise client.

Large customer base as product driver number 1

A large customer base generally ensures more product innovation. Provided, of course, that one listens to the customers and heeds their advice. Varien followed this principle to a tee, Magento followed this path as well, albeit on a smaller scale, eBay is at least trying.

How difficult such processes are can be observed in particular with the large enterprise vendors. Without a large customer base most feature sets are over-designed. Or small – but important – functionality is missing. In competitive pitches it is exactly these “minor” details, among others, that help to win against Hybris and Co.

Shopware

I don’t begrudge Shopware these successes. I think that they’re doing a really good job. And there really is enough space at the table for everyone. That the Shopware Community Day had 1,500 visitors and was elevated into the status of a revival experience of sorts by some participants shows that something big is afoot. Especially where marketing is concerned – on occasion the picture of a “total savior” is drawn (motto: “Emotional Shopping on any Device”). Until now, however, Shopware hasn’t been able to meet expectations in the enterprise area.

I repeatedly hear from some customers (and agencies) that the typical international projects (many languages, many localized country versions, product overlap) can’t be implemented without a lot of effort. Others deny this vehemently! In my opinion it was exactly this strength in excellent concepts and solutions for just these sorts of requirements that even enabled the rise of Magento into the enterprise sector. But maybe it is exactly this weakness that is preventing Shopware from losing touch with its base. We will see.