Finding a Unique eCommerce Solution for Your Business
Although cloud-based eCommerce has been around for the last decade, only recently it actually became widely available across retailers and a mainstream term in our vocabulary. In this article, we will revisit some basic terminology and explain the benefits of cloud-based or SaaS eCommerce which make them such a popular option.
SaaS: A Definition
What does “cloud” or “SaaS” eCommerce mean? Starting from the “eCommerce” term refers to electronic commerce or internet commerce and is, simply put, online shopping. More elaborately, eCommerce is defined as the activity of purchasing or providing goods and/or services in an online store for a set (or sometimes negotiable) price. eCommerce does not only refer to B2C commerce (clients buying from businesses), but it can also refer to B2B (B2B eCommerce definition: businesses buying products or services from other businesses).
Similarly, eCommerce does not only refer to direct retail services, but it also includes online auctions (think about e-Bay) and online markets (where buyers and suppliers can interact and trade with each other).
The Importance of Cloud-Based Platforms for eCommerce
“Cloud” and “SaaS” eCommerce refer to novel ways of conducting online shopping. It might sound trivial, but it is not so straightforward.
Before the introduction of clouds, online shopping was conducted via on-premise storage, meaning that a company would buy a server with specific storage space, place it in their headquarters, and hope that it would a) be enough to support the business needs and b) not break down, nor need technical support. This server would host all the data and develop eCommerce websites and shopping features and everything would be run by this one unit.
However, with increased traffic the need for storage space increased as well, meaning that the on-premise storage options would not be sustainable, not only from a maintenance cost perspective but also with regard to storage scalability and performance speed. Hence, other options needed to be developed, and data storage on a cloud was born. Cloud storage is a remote storage “facility”, run by a third-party provider, where online business owners can buy storage space and bandwidth, and sometimes data access.
Besides being used for eCommerce, cloud platforms have found vast applications in organizations handling large volumes of data, such as universities and research facilities. Also, nowadays, everyone can get their own “little cloud” when signing up for a Google account.
Is SaaS Different from "the Cloud?"
“SaaS” stands for “Software as a Service” and, with regards to eCommerce, it refers to eCommerce software licensing options that allow easy access to data stored on the cloud. What it really means, is that companies can subscribe to a package offered by SaaS providers and they do not have to worry about server maintenance, storage issues, software glitches, backups, and other common tech problems, as the third-party owner is responsible for the maintenance of the cloud and the eCommerce software.
It can be argued that investing in a SaaS platform is like a one-stop-shop, where with one click the retailer can have their online store set up, in a hassle-free manner. The majority of providers offer highly customizable and variable products, ensuring that the needs of the customers are met through frequently updated plugins, extensions, and new applications.
Examples of Cloud-Based and SaaS eCommerce Platforms
Now that we explained what a cloud-based or SaaS eCommerce platform is, we shall provide some examples of widely used providers, to give context to the theory. Until recently, the most widely used and reliable providers for eCommerce platforms were Shopify and BigCommerce. Emerging candidates have entered the cloud arena fighting for a piece of the pie to provide onlines stores.
Brands such as Magento Go, NetSuite, Demandware, Big Cartel, Volusion, Venda, Goodsie, and others are offering their services, to a great variety of customers. Each platform tries to differentiate from the others, by offering services relevant to a specific clientele, for example, Big Cartel is usually behind artistic ventures, whereas Demandware is preferred among large and established companies.
Top Benefits of Cloud-Based and SaaS eCommerce Platforms
There are several other benefits to the cloud and SaaS eCommerce platforms other than larger data allowance than on-premise platforms.
As it was mentioned earlier, cloud platforms offer remote access to a server owned by a third-party company. This means that the customers of this company, which are the businesses in need of a platform, do not have to care for the mundane chore of maintaining the server and the eCommerce software, fixing bugs, caring for updates, or anything other related. This is especially true if the online business is looking into signing up with an eCommerce platform does not have a strong IT team with knowledge of the sector, so it's better to opt out for a provider which will do all of the “housekeeping.”
Ready-to-Go eCommerce Solution
The role of platform providers is to provide products already developed and ready to go, saving time and money for the customer. The majority of offered products are highly customizable and easy to functionalize, so customers can build the platform they always dreamt of at the click of their fingers. While usually building an eCommerce platform could take months, using those “Lego” eCommerce solutions a final product can be put together much faster.
Another important benefit of cloud and platforms compared to on-premise options is scalability. The idea that led to the birth of the cloud was the need for more storage on the go, which was not possible with in-house servers. However, using a cloud server allows for on-demand storage and bandwidth expansion, helping the eCommerce business deal with increased traffic on the go and expanded inventory management.
Security can be a bit of a catch-22, as security breaches can lead to major reputation and financial damage for a company, regardless of where the leak occurred. However, in the case of cloud and platforms, the platform provider bares the responsibility of data security and PCI compliance, not the customer company. The provider is responsible to keep updating their system and fixing bugs that could compromise security, a two-level trust: between them and the customer company, and between the customer company and their clients.
Cost of eCommerce Software
There are definitely some minimum costs when shopping for a SaaS platform, and the cost increases with add-ons or special features. However, the cost is generally lower compared to building an eCommerce platform from scratch, as it does not include development or maintenance costs.