Open-Source vs SaaS eCommerce Platform: Pros and Cons (2023)

The question of which eCommerce platform to choose is very common among online businesses. There are so many solutions to pick from and so many aspects you need to consider before making the decision. Flexibility, functionality, security, cost – the list goes on. Knowing which type of platform better fits your business needs — open-source or SaaS eCommerce platform — will eliminate a lot of uncertainty and make the choice a lot easier.

What Is a SaaS Platform?

A SaaS (Software as a Service) platform is owned and supported by a third-party provider who licenses it to other businesses. With a SaaS platform, you get all the necessary features for your online store from the start, and you do not have to worry about hosting and maintenance. This helps businesses get a quick start and begin selling their products right away.

These types of platforms do not provide access to their source code and rely on the platform provider to support your business with the necessary tools and features.

In addition, SaaS platforms work on a subscription model, meaning that you have to pay regular subscription fees and, in some cases, additional charges (e.g. transaction fees).

Pros and Cons of SaaS

Let us start with the SaaS advantages:

  • Launch speed. SaaS platforms are characterized by high launch speed. Vendors usually offer guides, tutorials, and educational resources that help businesses quickly open online stores. The UI of SaaS ecommerce platforms includes a number of pre-built features that simplify the user path to launching the ecommerce business.
  • Intuitiveness. It’s true that not all SaaS platforms are intuitive. But if you choose a recognized vendor, you increase the chances to get a user-friendly solution. SaaS platforms are easy to use and maintain. Usually, it can be done by people having no tech background. However, the other side of this issue is narrowed opportunities for scaling.
  • Data security. If you use a SaaS platform, you won’t worry about security problems. The responsibility for your data protection is put on the vendor you choose. To be sure that you picked a secure option, choose among PCI-compliant solutions.
  • Client support (usually comes for free). SaaS teams provide their users with dedicated on-demand support. You can get in touch with the support team personally, and they will solve your issue. The quality and availability of customer support depend on the number of employees involved, the communication channels used for interaction, and the urgency of your problem.

Now, we discuss the SaaS cons.

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  • No flexibility. If you experience a tech difficulty or bug, you can’t fix it by yourself. Your team needs to wait for a provider to solve the problem. Suppose that your website or your management system is down under high traffic during the peak season. To fix the problem, you need to contact the support team. No one knows how much time it will take for them to recover your software. And each minute your solution does not work — you lose your prospective clients.
  • Harder to customize. The right to add new features or functionality is given only to a vendor. That is, you won’t be able to customize your ecommerce solution if your vendor doesn’t allow users to do so. And if you fail to offer a unique brand experience, you lower your competitive power. To get unlimited customization opportunities, choose open-source ecommerce platforms. When you use such a platform, your software engineering team gets control over the code and can adjust it to your needs.
  • Dependence on the vendor. When you use a SaaS ecommerce platform, you are limited in choice. The options you can choose from are defined by your vendor. If you want to improve some functionality and make it more user-friendly, you have to wait for the vendor to do it for you.

What Is an Open-Source Platform?

An open-source eCommerce platform, on the other hand, provides full access to its source code, allowing users to change, customize, and adapt it to their business needs. This brings a great deal of flexibility, which is especially important to growing businesses that require tailored solutions to fit their specific needs. Furthermore, they allow users to build completely custom tools (e.g. Product Information Management (PIM), inventory management, etc. without the need to rely on ready-made ones.

However, to take full advantage of the benefits of an open-source platform, you would have to acquire assistance from experienced developers with expertise in eCommerce development. Among the most popular open-source platforms are Magento, WooCommerce (a WordPress plugin), Open-Cart, and nopCommerce.

Open-Source vs SaaS eCommerce Platform: Pros and Cons (1)

Pros and Cons of Open-Source Platforms

If you think that the customization capacities of open-source ecommerce platforms are their one and only benefit, you should keep reading. Open-source platforms are good because they offer:

  • Complete awareness of what’s happening with your store. Open-source ecommerce platforms give you complete control over your store’s functioning and performance. If you plan to rapidly scale and introduce big changes to your solution, this type of software is exactly what you need.
  • Big and dedicated community. Open-source ecommerce solutions are targeted at a big audience. As a result, there are a lot of experts worldwide who specialize in particular ecommerce technology. They eagerly share their insights and achievements with the community on GitHub. Your ecommerce development team can make use of it and regularly improve the security, performance, and intuitiveness of the solution.
  • Flexibility. You can customize your store to give it a branded appearance and personalize the user experience. Compared to SaaS ecommerce platforms, open-source solutions give businesses more flexibility to choose how their stores will look and work.
  • Ecosystem freedom. It often happens that SaaS vendors try to lock clients in their business ecosystem. That is, a client purchases access to a solution. But it turns out that the solution lacks some essential functions. Also, it turns out that the vendors offer these functions in another piece of software. And clients have no choice but to invest in one more piece of software to keep their business operations consistent. This is not the case for open-source platforms. They give you the freedom to choose what solutions to integrate and what add-ons to select.

As for the disadvantages of open-source software, these include:

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  • Security gaps. Open-source platforms have open code, which can be viewed and changed by anyone. This is why there are lots of security vulnerabilities when it comes to this kind of software. Though, there’s a way out. Security plugins and third-party integrations can improve the protection of your solution.
  • Responsibility. All code modifications and changes are the responsibility of your team. The more you customize your website, the more complex code becomes. It may pose a challenge when you plan to introduce some changes or improvements.
  • Maintenance costs. Sure, some open-source platforms for ecommerce offer free plans. But sometimes, this is not enough for a growing business. As you scale up, you will need more functions and features. Adding them to your ecommerce webstore and maintaining high website performance will come at a cost.

Comparing the Features of Open-Source and SaaS Platforms

Scalability and customization

SaaS platforms have all the necessary features to quickly set up an online store and rely on their provider to develop and implement additional tools and features. However, restricted access to the source code makes both customization and scalability a bit tricky.

When looking for a specific feature, you have to choose the one that best fits your needs. Sometimes, the tool that you are looking for may be unavailable or non-existent. In such a case, there is not much you can do but hope that the platform provider eventually implements the feature you need – developing it yourself is not possible.

Open-source platforms, on the other hand, exceed in customization and scalability. You do not have to rely on the platform owner – your technical team can simply build the feature that will be tailored to your specific requirements whenever you need it.

More importantly, you can easily adjust various aspects of your store (for example, the checkout process) and make it more appealing to your specific audience. One of the best ways to ensure your customers complete their orders is by providing a convenient and memorable experience. It is well known that a happy customer is a repeat customer, so having the ability to appease your clients should not be underestimated.

When deciding which eCommerce platform to choose, it is important to think about the goals and the future of your business. Businesses with no aspirations for significant scaling or customization can get all they need from a SaaS platform. Developing businesses, however, may want to look towards open-source platforms that can provide a significant boost to their growth.

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Security, maintenance, and support

When it comes to cyberattacks, eCommerce is the second most attacked industry in the world. Therefore, the security of the personal data of your customers (e.g. payment information) should be of the utmost importance to all online merchants.

Open-Source vs SaaS eCommerce Platform: Pros and Cons (2)

Both types of platforms are more than capable of making an online store secure. The difference is that with SaaS solutions, ecommerce website security and maintenance are taken care of by the provider, while open-source users have to task their technical team to make their store secure and updated with the latest patches.

This may seem like a drawback but it is actually a blessing in disguise. It gives merchants full control over their store, allowing them to optimize it in a variety of ways: from increasing page load speed to improving their infrastructure. Something that is not possible with closed platforms.

Where closed platforms do exceed, however, is in offering reliable support. Platform providers take great care of their product to ensure that customers (i.e. eCommerce merchants) have a smooth experience and do not face any issues – their reputation is on the line, after all. By going with a third-party platform, you can be certain that if you experience any issues, your provider will be quick to solve them.

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Open-source platforms, on the other hand, do not have a dedicated support team. If an issue occurs – your technical team would have to solve it by themselves. Luckily, most open-source platforms have accumulated large communities of developers who can offer advice and assistance when needed.

Cost and set-up time

Most closed eCommerce platforms work on the subscription model – the user has to pay a monthly subscription fee to continue using the solution. Moreover, there are additional charges that you need to be aware of, like transaction fees. Shopify, for example, charges a transaction fee for each completed purchase in your store which, depending on your plan, ranges from 0.5% to 2%.

However, these types of platforms are quite easy to use and do not require additional assistance from developers to make them work. Therefore, you do not have to worry that your project will incur additional development costs. If you need to start selling your products quickly – a third-party solution will allow you to set up your store in no time.

An open-source eCommerce platform like Magento, on the other hand, is completely free. There are sometimes paid versions with additional benefits, (e.g. Magento CloudCommerce ) but everything you need for eCommerce store development is available in the free version as well.

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When it comes to additional charges like transaction fees, an open-source market is a bit of a mixed bag: some have them (WooCommerce, nopCommerce), and some do not (Magento). Therefore, you have to do some research to get the full picture before choosing the platform. However, in both cases, there are no subscription fees that you have to keep in mind.

What you do have to keep in mind is that these platforms, most of the time, require a bit more time and effort to truly shine. If you want to build something unique that will help your business in the long run, you have to be prepared to invest in a team of experienced developers who can help you.

Which eCommerce Platform to Choose?

Without exaggeration, choosing the eCommerce platform that fits your business needs can be the difference between success and failure. Hopefully, the information above has provided some clarity on the two types of solutions and will help you decide which type of solution better fits your business. If you require any additional assistance with your eCommerce project – feel free to reach out, our experts are always happy to help.


What is the advantage of open source e commerce platform compare to SaaS platform and vice versa? ›

Arguably one of the most significant differences between open source and SaaS, customization is a crucial aspect of building your online store. Since the user has full control over the source code, open-source software allows for complete customization, all the way from product pages to themes to check-out experiences.

What is the difference between open source and SaaS? ›

Open source can be expensive, especially if you need to hire an agency or developer to help you. SaaS, on the other hand, has a monthly subscription fee that is often less expensive in the long run (but costs more in the beginning). The best way to decide is to try out a few platforms and see which one you like best.

What is the difference between ecommerce and SaaS? ›

What is the difference between SaaS and ecommerce? Ecommerce (or electronic commerce) is the practice of selling goods or services online. SaaS—which stands for software as a service—refers to a software distribution model in which users pay a subscription fee to access software over the internet.

What is the main advantage of SaaS e commerce platforms? ›

SaaS ecommerce software provides the flexibility, scalability, and cost-effectiveness of a hosted system that is fully maintained off premise by a vendor. We'll get into specific benefits in a minute, but the key thing to understand about SaaS ecommerce is that it simplifies ecommerce for retailers and shoppers.

What are the pros and cons of adopting open source software? ›

Pros & Cons of Open Source in Business
LongevityOrphan Software
1 more row

What is an open source ecommerce? ›

Open-source ecommerce refers to any ecommerce software that provides users full access to its original source code, allowing them to modify and customize the ecommerce platform to meet your needs, and gives them control over your online store's design and functionality.

What is SaaS ecommerce platform? ›

A SaaS e-commerce platform is an e-commerce software delivered as a cloud-based system that can be accessed through all types of web browsers. SaaS e-commerce is typically sold on a subscription basis.

What is the main difference between open source software and free software? ›

Freeware vs. Open-Source Software: What's the Difference? While freeware is free software, it nevertheless maintains its copyright. Alternatively, open-source software is both free and publicly available to use, modify, repackage and redistribute with no limitations.

What are 3 disadvantages of SaaS? ›

Challenges of SaaS
  • Loss of Control: The vendor manages everything, making you dependent upon the vendor's capabilities.
  • Limited Customization: Most SaaS applications offer little in the way of customization from the vendor.
  • Slower Speed: SaaS solutions can have more latency than client/server apps.

What are the pros and cons of SaaS industry? ›

SaaS advantages
  • Lower up-front cost. SaaS is generally subscription-based and has no up-front licence fees resulting in lower initial costs. ...
  • Quick set up and deployment. ...
  • Easy upgrades. ...
  • Accessibility. ...
  • Scalability. ...
  • Lack of control. ...
  • Security and data concerns. ...
  • Limited range of applications.

What are the biggest risks for SaaS companies? ›

SaaS Security Risks & Concerns
  • Ransomware through SaaS.
  • Third Party Risk Management.
  • Saas Security Risk assessment.
  • Identity management issues.
  • Lack of Transparency.
  • Data Breaches.
  • Secure access to the cloud.
  • Disaster recovery.
Jan 3, 2023

What are the three types of e-commerce companies? ›

There are three main types of e-commerce: business-to-business (websites such as Shopify), business-to-consumer (websites such as Amazon), and consumer-to-consumer (websites such as eBay).

Can open source software be SaaS? ›

Some SaaS solutions are open source, while others are proprietary. Open source SaaS solutions are typically developed by a community of developers who collaborate to create the software. These solutions are often free to use, but there may be costs associated with hosting and maintaining the software.

What are the three major e-commerce business models? ›

What are the four traditional types of ecommerce? Some consider business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C), and consumer-to-business (C2B) the “four traditional” types of ecommerce.

What are 3 advantages of e commerce? ›

What are the advantages of e-commerce?
  • Reduced overhead costs. Running an e-commerce store is a lot more cost-effective than running a physical store. ...
  • No need for a physical storefront. ...
  • Ability to reach a broader audience. ...
  • Scalability. ...
  • Track logistics.

What is competitive advantage for SaaS business? ›

Competitive advantage in the SaaS business model comes from leveraging the customer-vendor network connection to reengineer business processes and service delivery, while building a large customer base to create economies-of-scale and network effects.

What are two advantages of e commerce for business? ›

When you sell on ecommerce marketplace you have lots to gain from. You have more customers, greater control, easier inventory management, easier returns and delivery systems. There are even ways to offer benefits to your buyers. You can set up your choice of payment modes.

What are 3 advantages of open source? ›

Open-source software (OSS) advantages include lower starting costs, faster project starts, faster iteration, more-flexible software development processes, robust community-driven support, and easier license management, without being contractually locked into work with a single name just a few.

What is the disadvantage of open source? ›

The main disadvantage of open-source software is not being straightforward to use. Open-source operating systems like Linux cannot be learned in a day. They require effort and possibly training from your side before you are able to master them.

What are 3 examples of open source? ›

10.4 Examples of Open Source Software
  • Firefox—a Web browser that competes with Internet Explorer.
  • OpenOffice—a competitor to Microsoft Office.
  • Gimp—a graphic tool with features found in Photoshop.
  • Alfresco—collaboration software that competes with Microsoft Sharepoint and EMC's Documentum.

What are 5 examples of open source? ›

  • GNU/Linux.
  • Mozilla Firefox.
  • VLC media player.
  • SugarCRM.
  • GIMP.
  • VNC.
  • Apache web server.
  • LibreOffice.

What is open source platform example? ›

Examples of open source programs

Android by Google. Open office. Firefox browser. VCL media player.

Is Shopify open source platform? ›

Not open-source

Shopify is a hosted platform and doesn't provide access to its source code. So, what does that mean? First, it means that you won't be able to modify the code side of your store and its design to your needs.

What are the two types of ecommerce platforms? ›

SaaS and PaaS platforms both deliver the e-commerce solutions through the internet.

Is Amazon a SaaS platform? ›

AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.

What is an example of a SaaS platform? ›

Examples of popular SaaS providers include: BigCommerce. Google Workspace, Salesforce. Dropbox.

What are the pros and cons of free and open source software? ›

The Pros and Cons of Open-source Tools
  • The Pros of Open-source Software.
  • Open-source software is cost-effective. ...
  • Constant improvements are a hallmark of open-source software. ...
  • The Cons of Open-source Software.
  • Open-source software might not stick around. ...
  • Support isn't always reliable. ...
  • Security becomes a major issue.

What is the biggest advantage of open-source software except for that it is free? ›


One of the fundamental advantages of open source is community involvement. Rather than writing an application and having to sustain it yourself, you can share the cost of maintaining and sustaining applications among multiple parties.

Is it better to use open-source software? ›

Some people prefer open source software because they consider it more secure and stable than proprietary software. Because anyone can view and modify open source software, someone might spot and correct errors or omissions that a program's original authors might have missed.

Why do most SaaS fail? ›

SaaS startups have a high failure rate due to a number of factors, including poor product adoption, poor scalability, lack of funding, lack of a unique value proposition, and inadequate marketing and sales efforts.

What are the 2 basic components of SaaS? ›

The essential SaaS components are: CRM system. Marketing automation.

Why do customers prefer SaaS? ›

Clients who may not have enough funds or expertise to build and maintain the application can rely on professionals to do it, which saves them money. The communal, multi-tenant environment of SaaS products means all customers share the cost of maintenance and updates, working together to pay for a high-quality product.

Why do companies prefer SaaS? ›

Why choose SaaS? Software-as-a-service reduces a business's IT budget by cutting or eliminating upfront cost for IT resources, configuration and implementation requirements, and maintenance costs. Companies that find a SaaS subscription plan that meets their needs can be fully operational quickly.

Why is SaaS good for small business? ›

Not only does SaaS, running on a web-based platform, eliminate the need for IT to manage and repair a new platform, but it also helps the company save on costs in not having to hire additional IT support.

Which are the 3 things which have a massive influence on your SaaS business success? ›

These three core elements establish the foundation of every SaaS growth strategy and help ensure your SaaS company can follow through on its expansion plans.
  • Market strategy. Understand your target market, and find the right way to reach them. ...
  • Product strategy. ...
  • Go-to-market strategy.
Sep 28, 2022

Is SaaS more secure? ›

With the right technology and best practices in place, SaaS can be far more secure than any other on-premise application. Businesses can retain control over the security infrastructure, such as encrypting customer data, and ensuring they meet necessary compliance standards.

What is risk management in SaaS? ›

Risk management software-as-a-service can provide the insight you need to monitor and lower your Total Cost of Risk (TCoR). Make informed decisions with real-time analytics by integrating all of your data from internal and external sources in one system while connecting risk mitigation activities across the business.

What are the 4 types of e-commerce? ›

The Most Common Types of Ecommerce Business Models
  • B2C (Business-to-consumer). B2C businesses sell directly to their end-users. ...
  • B2B (Business-to-business). ...
  • B2B2C (Business-to-business-to-consumer). ...
  • B2G (Business-to-government). ...
  • C2B (Consumer-to-business). ...
  • D2C (Direct-to-consumer). ...
  • C2C (Consumer-to-consumer).

What are the four levels of e-commerce? ›

There are four main models of e-commerce: Business-to-Consumer (B2C), Business-to-Business (B2B), Consumer-to-Business (C2B), and Consumer-to-Consumer (C2C).

Which are the 4 phases of e-commerce? ›

The Four Phases Of E-Commerce Consumer Engagement
  • Phase I: Get Back To Basics.
  • Phase II: Make It Easy.
  • Phase III: Make It Familiar.
  • Phase IV: Create Conversation.
Jan 15, 2013

Can you run a business on open source software? ›

Open source is good business

Open source software isn't just for developers. Businesses can leverage the power of open source software, as well. In fact, open source is a major driver in many business areas. The tool you're using today might itself be open source software or using open source as part of the stack.

Do businesses use open source software? ›

All Open Source software can be used for commercial purpose; the Open Source Definition guarantees this. You can even sell Open Source software. However, note that commercial is not the same as proprietary.

Is Apple an open source software? ›

Google's Android is considered an Open Source mobile OS, while Apple's iOS is considered closed source and each has its own benefits and issues.

Which is the most popular eCommerce model? ›

Business to Consumer (B2C)

The most well-known and traditional type of eCommerce model is the business-to-consumer model. B2C companies sell their products and services directly to the consumer. The most famous example of a company that made its name in the B2C space is Amazon.

What are the most popular eCommerce business models? ›

There are four main ecommerce business model types:
  • Business to consumer (B2C)
  • Business to business (B2B)
  • Consumer to consumer (C2C)
  • Consumer to business (C2B)
Feb 1, 2023

What is the advantage of an open source platform? ›

Open-source software (OSS) advantages include lower starting costs, faster project starts, faster iteration, more-flexible software development processes, robust community-driven support, and easier license management, without being contractually locked into work with a single name just a few.

What are the advantages of using open source software as compared with proprietary software? ›

Open source is generally much more cost-effective than a proprietary solution. Not only are open source solutions typically much more inexpensive in an enterprise environment for equivalent or superior capability, but they also give enterprises the ability to start small and scale (more on that coming up).

What is open source software what are its advantages as compared to conventional commercial software? ›

Open-source software is computer software with its source code made available by the developer to everybody to study, change, modify, enhance and distribute. On the other hand, commercial software has source code that only the person, team, or organization that created it can edit, inspect, change and enhance it.

What are the advantages of software as a service SaaS )? More than one answer may be correct? ›

Advantages of SaaS Technology

Accessibility: Ability to run via an internet browser 24/7 from any device. Operational Management: No installation, equipment updates or traditional licensing management. Cost Effective: No upfront hardware costs and flexible payment methods such as pay-as-you-go models.

What are 3 disadvantages of open source software? ›

Disadvantages of open source software
  • The difficulty of use. Some open source applications may be tricky to set up and use. ...
  • Compatibility issues. ...
  • Liabilities and warranties. ...
  • Hidden costs.

What advantages disadvantages are there to open source? ›

Conclusion. Open-source tools offer numerous advantages for web developers, such as enhanced flexibility, cost-effectiveness, and a thriving community. However, it is crucial to consider the potential drawbacks, including the lack of official support, security risks, and compatibility challenges.

What are three advantages of open source software for businesses use? ›

Advantages of open source software for business
  • lower software licensing costs.
  • no supplier lock-in.
  • freedom to do what you want with the software.
  • open standards that support collaborative development.
  • freedom to upgrade software as it suits your business.

What are the pros and cons of open source vs licensed proprietary software? ›

Open-source software is free software, so the upfront cost is low. However, customizations, maintenance, and support add a cost component to it. Proprietary software has a high upfront and ongoing cost. However, these costs can be offset if the vendor offers support and maintenance.

Why free software is better than open source software? ›

As one person put it, “Open source is a development methodology; free software is a social movement.” For the Open Source movement, nonfree software is a suboptimal solution. For the Free Software movement, nonfree software is a social problem and free software is the solution.

What is the difference between open source and commercial platforms? ›

Open source code is “freely available and may be redistributed and modified.” The community supports the code. On the other hand, commercial software is developed and maintained by a single company. In this guide, we'll compare open source and commercial options for machine learning, and then explore hybrid options.

Is open source more secure than commercial software? ›

Open source software makes its code available for review, which increases the likelihood that security vulnerabilities are found and corrected quickly. Closed source software may be secure as well, but you have to trust the developers and company who made it.

What are some advantages and disadvantages of employing software as a service SaaS )? ›

The pros of SaaS include cost, maintenance and mobility. The cons include security, contractual obligations and a loss of control. Proper software asset management is critical with SaaS applications.

What problem does SaaS solve? ›

Problems such as high hardware and software licensing costs, integration and scalability can be solved simply by handing the reins over to SaaS – and in a world where time is most definitely money, you'd be hard-pressed to find a business that can afford not to.


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