Differences between PaaS, SaaS, Modular, and Self-Hosted Open Source
What are the pros and cons of the different ecommerce website delivery methods? Let's look at SaaS, PaaS, modular, and self-hosted open source.
If you're weighing the options on different ecommerce platform hosting and delivery methods, you've come to the right place.
Choosing your ecommerce platform is a substantial commitment, one that you will hesitate to change for several years at least. There are many things to consider when comparing the platforms in terms of price, features, functionality, and support, but one of the less obvious considerations is how the platform is delivered and hosted.
This difference in delivery will directly impact your options for development and the total cost of ownership.
In this post, we’ll define the four categories that most ecommerce platforms fall within: Platform as a Service (PaaS), Software as a Service (SaaS), modular, and self-hosted open source.
SaaS: Software as a Service
A Software as a Service (SaaS) ecommerce platform comes with all of the basic necessities of a web store — hosting, secure payment gateways, catalog management, and content management.
SaaS platforms offer the easiest entry points for small merchants. You can spin up a basic storefront in a single afternoon. They also allow for integrations or functionality extensions through apps, and the ability to customize the theme. The big advantage for merchants is the lower development costs and lower cost of ownership. You often don’t have the ability to write custom code — which means you don’t have to pay to write or maintain that work.
A SaaS ecommerce platform does not provide the development team any access to the servers, infrastructure, codebase, or database. They can be modified using specialized languages, integrated through APIs, or externally hosted applications. As an example, when you add an app into a Shopify store, the data that the app needs (say for its settings) is not stored in the Shopify database, it is instead stored externally by the app developer.
Businesses that are not looking for typical commerce features will find a SaaS platform limited, or unadaptable to some customization. Once you need to customize the UX functionality, administrative layout, or create a unique integration, you’ll find yourself hitting the SaaS ceiling.
However, the SaaS platforms have been quickly gaining market share, as many commerce business needs are similar, and light customization is preferred.
Leading SaaS Platforms
Why Choose Shopify?
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PaaS: Platform as a Service
Platform as a Service (PaaS) ecommerce platforms are growing in popularity. PaaS comes from cloud computing where a third-party provider delivers hardware and software tools, which can then be used for application development. The PaaS provider hosts the hardware and software and manages the hosting infrastructure. As an example, consider Adobe Commerce, which runs on AWS and Azure platforms that Adobe manages.
This means you don’t have to set up and maintain hosting, web operations infrastructure, server system upgrades, and server security. So it’s a lot like SaaS, but with one important distinction. The ecommerce application code is maintained by your development team. This gives you direct control of the application and the ability to adapt the code as needed to suit your needs.
This brings flexibility to you and your business. You can implement custom integrations, highly custom themes, custom extensions — anything you need to make the ecommerce application suit the way you do business.
Since your development team has access to the entire codebase of the application, you have as much control of your website as you would over an open-source website. This extends to custom system integrations as well, allowing you to connect systems where and how you want instead of depending on the API/app model you’re limited to with a SaaS. This is especially important for larger businesses that have specific ways they need their website to interact with their ERP or CRM.
Leading PaaS Platforms
- Adobe Commerce (Magento)
- Oracle Commerce
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Modular Ecommerce Platforms
This is a relatively new category, which is really sort of a SaaS offering. These companies provide modular components that merchants might need, so rather than buying an all-in-one platform like Adobe Commerce or Shopify, they can put together the LEGOs that make sense for your business.
For example, a catalog merchant with a community aspect (think Cotopaxi) might need an ecommerce storefront, product information management for the catalog, and membership for the community. With a modular platform, you assemble the parts you need. This is similar to the HubSpot CRM software model where there is a Sales Hub, Marketing Hub, and Operations Hub — all of which can work together or independently depending on your needs.
The other advantage is they tend to be “headless,” meaning the front-end theme development is done independently from the application commerce software. This lets you manage and change the front end of your website to build highly-custom user experiences independent of the back-end application. It frees up your designers and developers to build UX and applications that are not inside the ecommerce application (think like a mobile app that has integrated commerce).
Leading Modular Platforms
- (Shopify, BigCommerce & Adobe Commerce all also support Headless, but are not Modular)
Self-Hosted Open Source: Complete Ownership
Open-source applications simply give you the source code and the hosting/delivery is left to the merchant and their developers to piece together. They require complete ownership: initial development and design to create the website, ongoing development to maintain the website, a monitored server to securely host, and a team to run and manage the day-to-day.
Open-source applications can be appealing to merchants (often the source code is free), but hosting, customization, security, and all maintenance fall to the merchant, so the total cost of ownership (TCO) is high. In addition, these systems cannot be ignored or they are sitting ducks for security issues — so while they were popular a decade ago, more managed platform solutions are taking over.
Leading Open Source Platforms
- Magento Open Source
Building for the present with the future in mind
There isn’t one category of ecommerce platform that’s inherently best. It’s highly likely that as a new merchant, you’ll start out on a SaaS platform, someday migrating to a PaaS, or go modular once your business grows enough to support it.
When choosing between the options, we recommend that you pay attention to the now, but anticipate and plan for the future knowing that the platform you’re on this year may not be the platform best suited for your business in three years.