After making the initial decision of venturing into the online shopping world merchants often hesitate in choosing between a Hosted (self-managed solution) or a SaaS based ecommerce solution. The correctness of the choice completely depends on the Merchants organizational constraints and capabilities.
Before deciding on the platform you should primarily evaluate your business on the following terms:
- Technology resources and their competency
- Focus on Core business or Technology
- Organizational maturity
- Financial capacity
Apart from knowing your business from the above mentioned aspects you should also have a knowledge of the benefits and concerns of hosted and SaaS based ecommerce solutions.
What follows is a brief evaluation of the two technologies based on some facts:
Hosted (self-managed Solutions) –
Benefits:
- Independence
Complete freedom to do whatever you wish to do with your online store. No limitations in terms of expanding features.
- Complete control
You would have your destiny in your hands as you would be having maximum control over your system.
Concerns:
- Technical Empowerment
If you have a limited understanding of technology this solution will not be able to serve your purpose. It would be like buying a smart phone but you use it only to listen to radio. As a result you will not be receiving the value for money.
- Maintenance
In the absence of technologically sound and competent resources it will be difficult for you to manage the powerful platform. Then to cope up with the situation you will be inevitably outsourcing all your maintenance and support needs to another organization which would be extremely costly.
- Migration
Finally you would almost be forever bound with the platform, as with the huge invest you would have already made into it, you would never be able to conclude migrating to another platform.
- Dependency on Hosting service provider
The hosting service provider has to be chosen wisely .Your ecommerce performance and user experience would substantially depend on the hosting provider.
SaaS based ecommerce Solution –
Benefits:
- Cost
Low cost is one of the primary points in favor of SaaS based solutions as no CAPEX is involved which will give you some cushion in your balance sheet.
- Focus
Instead of being stuck with technological responsibilities you can focus on your business. As all the technological hassles would be looked after by the service provider.
- Time to market :
SaaS based solutions can get you started in no time. You can launch your shop within hours or maximum a month compared to other options where it take several months before going live.
- Best practices :
SaaS based solutions as used by many e-businesses in your domain will incorporate the business best practices which otherwise to implement would involve several bad experience.
Concerns:
- Customization
Yes, surely you will have customization options but you would not have complete flexibility as in the case of a hosted solution. Capabilities would be limited. But since you directly cannot modify the features the provider can quote you on his own terms and rates which can be very high at times.
- Security
Although there are several driving factors yet security has always been a common question raised by merchants. Since your store would be sharing a common platform with other businesses as well you would always have a feeling that your data is getting compromised.
Our suggestion is, if you are small business in the nascent state and you do not have enough funding and resources, going for a SaaS based eCommerce is an agreeable choice. You would be able to focus on your core business and its growth instead of spending your valuable time and effort on technological aspects. Once you reach a level of maturity in terms of products, customers and revenue you can always shift to a self-managed platform and get a dedicated IT team.
