E-Commerce Development: Microsoft vs. Magento & Shopify

Written on
June 30, 2020

Microsoft, Shopify, and Magento are all leading e-commerce solutions. How do the three e-commerce platforms compare? The short answer depends on the use case, and each system is a clear winner in different circumstances.

When it comes to e-Commerce development platforms, it's prudent to select software that matches your technical skills, business requirements, and budget. Analyzing solutions based on ease of use, available relevant apps, customization, scalability, payment processors, SEO, Security, and the cost is an effective way to determine the best platform for your store.

Popular eCommerce platforms (Source: Builtwith.com) APIs and Extensions

Ease of Use

Shopify's intuitive interface allows for quickest and easiest self-service options, to a large degree drag-and-drop development. Shopify Plus comes with a bigger feature set, so you're less reliant on third-party plugins to build your e-Commerce store.  Shopify is the only platform of the three, in which a technical beginner can fully set up a working e-commerce website with relative ease.

In comparison, both Magento 2.0 Open Source and its 2.0 for Enterprise are, although well documented, much more technical with steeper learning curves, with a certified partner recommended for implementation. With Microsoft, you can either develop your custom e-commerce website using tools offered by Microsoft Azure or select Dynamics 365 Commerce. Dynamics 365 Commerce comes with a rich e-commerce feature set (similar concept to Magento, Shopify, or any pre-built e-commerce platform). You will likely need to hire a Microsoft certified partner, such as TechFabric, to build and optimize your eCommerce store.  Concerning ease of use, usability will largely depend on the success of your implementation if you go the custom route. In contrast, Dynamics 365 Commerce is super user friendly out of the box.

Magento EE Admin Dashboard

Customization

Microsoft eCommerce offers a vast ecosystem of software, it’s a highly customizable. You can seek the services of TechFabric to integrate micro-services and apps with your e-commerce store to enhance customer experience. You're primarily limited to the collective vision and technological capability of your team in crafting a scalable, secure, integrated e-commerce application with Microsoft Azure and related products. TechFabric has extended development even to include specific fulfillment apps used to improve warehouse fulfillment times continuously. You also can tap into products such as Azure Cognitive Search, with built in AI capabilities, or have the flexibility to build your own AI applications.

Microsoft Dynamics 365 Backend Example

With Shopify Plus, you get access to over 60 pre-populated, mobile-optimized, and customizable themes, or you can develop a fully custom theme. However, Shopify is by far the most limited of the three platforms when it comes to customization. You are prevented from making backend customizations and are limited mainly to the available features or third-party applications. The benefit is that by not allowing customization of the backend, the system is harder to break and more stable in the hands of novice admins.

Shopify Plus Admin Dashboard

The Magento 2.0 EE and Magento 2 open source are much more customizable than Shopify, as developers can make both frontend and backend modifications.  As is the case with Microsoft, Magento allows developers to support complex business requirements and niche workflows.

Mobile-optimized eCommerce store is important (Source: paulsutton.co)

APIs and Extensions

The success of your e-Commerce store relies on the effectiveness of your APIs in enabling smooth integrations. Dynamics 365 offers several apps for operations like App Services, but most benefit comes from Microsoft e-commerce architecture that integrates with third-party APIs. TechFabric develops robust APIs that allow seamless integration with third-party apps. Shopify Plus includes enhanced API resources like Multipassand has over 2,400 apps while Magento Marketplace offers over 5,000 extensions.  It’s a good idea to map your needs in terms of integrations, analyze the integration path for any e-commerce platform under consideration, and be mindful of licensing costs for third-party connectors and integration services.

Payment Processing

Azure e-commerce architecture and Magento are integrated with multilingual payment processors and are the best choice if you aspire to expand your eCommerce store globally, there is no transaction fee. In comparison, Shopify allows you to use either Shopify Payments to transact for free or choose from 100 other payment gateways like PayPal and pay between 0.5% and 2% per transaction. If you struggle with integrations, TechFabric also offers API integration services.

Search Engine Optimization (SEO)

Building an SEO-friendly eCommerce is crucial since most online interactions start with a search engine. All three solutions are SEO friendly and capable of reaching a highly optimized state.  Again, in the hands of a novice, Shopify provides the most self-service tools to implement on-page SEO out of the box.  Magento is fairly SEO friendly out of the box, but you can also find lots of apps to enhance the systems SEO capability. With Microsoft, you can create the box, so the solution is as SEO optimized as the team makes it.  In any event, to get the most out of SEO functionalities, you need to leverage analytics. We develop and leverage analytics and data science solutions.

Cost

Standard Shopify pricing ranges from $9-$299 per month (plus applicable transaction fees), depending on the plan selected. Shopify Plus, branded as an enterprise platform with monthly base costs in the $2,000.00 per month range per domain. You must use Shopify payments to avoid additional transaction fees between 0.5-2%, which make up a substantial amount of the company earnings, neither Magento nor Microsoft charge transaction fees.  Given that Shopify is a software as a service (SaaS) platform, hosting is inclusive in all tiers of service.

Magento has three pricing models, a completely free open source version, which is an excellent option for small and medium-sized businesses looking to scale up to mid-market. Magento Enterprise Edition (EE) self-hosted, and Magento (EE) cloud version, are priced by the annual sales processed on the platform.  Magneto EE and Cloud start at $32,000.00 and $52,000.00 per year for transactions up to $5,000,000.00 annually, across up to 5 domains.  Licensing fees increase dramatically for high volume merchants; for example, Magento EE Cloud fees would be around $2,000,000.00 annually for a merchant doing $100,000,000.00 in annual sales.  Custom pricing and negotiation can come into play for both Shopify Plus and Magento Enterprise solutions.

Microsoft Azure uses a differentiated pricing model that allows you to only pay for what you need, and there are no transaction fees.  Using Microsoft’s WebApps web-hosting service, developers can build your e-commerce platform and deploy it on the Azure Cloud. An example is the Auto Refi Platform for iLending Direct, or retail e-commerce site K&L Wines.  That cost model is similar to an elasticity bill; you mainly pay for your respective Azure usage. Dynamics Commerce 365 rich feature set comes at a considerable cost of $5,000.00 per month plus $195 per month per admin user.

For mid-market and enterprise customers, Microsoft’s pricing model is a standout winner.  Microsoft’s exact pricing will depend on the precise setup of your e-commerce ecosystem and usage.  From our experience, as an estimation based on a merchant doing $100,000,000 in annual sales pays around $500,000.00 per year in Azure consumption and other associated software costs, potentially 50-75% less than Magento EE cloud version, or Shopify Plus.

Aside from licensing fees, one must consider development costs.  Shopify provides the lowest development costs by far as you are subscribing to a fully built hosted platform.  For a small business development costs could potentially be $0.00, simply not an option with Magento or Microsoft solutions.  There are too many dependencies to provide useful figures in terms of development build costs for Microsoft and Magento solutions; certified partners can provide estimates based on well-documented business requirements.  The most basic Magento and Microsoft e-commerce solutions start in the lower five figures and can go well into seven figures to build complex enterprise systems.

Scalability

Your website should handle a sudden increase in the number of customers and transactions. Microsoft e-Commerce infrastructure allows you to scale your online store application up, down, or horizontally. Shopify Plus offers higher scalability than Shopify. For instance, Shopify Plus will enable you to add unlimited staff accounts, but Shopify is limited. Also, Magento 2.0 EE is more scalable than Magento 2 Open Source. TechFabric builds highly scalable mobile and web apps as well as REST APIs for apps that serve millions of weekly users. With our expertise, your store can serve thousands of requests per second using horizontally scaled cloud infrastructure and have a scalable API architecture for long-term success.

At Tech Fabric, we have specialized in developing and optimizing e-commerce solutions. Our expert development teams create highly scalable e-commerce web and mobile apps, APIs, and analytical solutions. We also help organizations quickly create and deploy complex infrastructure to enhance omnichannel customer experiences, sales, and overall performance.  Contact our sales team to learn more.

Article written by
Adam Lilly
Chief Sales Officer

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