Magento Commerce – The $50 Billion Hidden Gem

Posted on the 8th February 2016

Magento Commerce is one of the largest players in ecommerce software, but unless you’re a solutions provider or a webmaster who operates a site powered by the platform, there’s a fair chance that you haven’t heard of it. Outside of the (admittedly large) niche that includes large retailers using the Enterprise Edition and smaller stores powered by the Community Edition, the name Magento is by no means familiar to everyone.

Magento: Emerging From the Shadows of Ebay

CEO Mark Lavelle called the company “the biggest commerce company you haven’t heard of”, noting that since it had been a part of eBay for so long, it went un-noticed. But now that the company has spun off, it has become its own, powerful entity, and it has a real chance to shine.

The stand-alone Magento Commerce has just 1,000 employees, compared with the 36,000 that are a part of eBay. But, when it walked away from Ebay, it did so with around 250,000 clients, including a few thousand companies with nine-digit incomes. Companies such as Abercrombie and Fitch, and DSW, are powered by Magento. That’s an impressive client portfolio upon which to build the business.

A Crowded and Competitive Field

But will Magento be able to stay ahead of its rivals now that it is a stand-alone company? Given that there are some rather large players entering the ecommerce space, including IBM and Oracle, Magento has a great deal of work to do if it wants to stay ahead.

The recently released Magento 2.0, and the new Order Management platform, are both major steps forward for Magento Commerce, but their release has been marred by the fact that last month a serious XSS bug was found in both Magento 1.9.x and Magento 2.0.

Retailers, right now, are looking for reasons not to upgrade. They want to try to find ways to get away with sticking with what they know. Having an omnichannel strategy is appealing, but upgrading from legacy platforms takes a lot of work, work that the retailers may not feel confident in undertaking.

The benefits of upgrading in terms of performance, stability, integration and security are all clear. However, it could be that the company which offers the smoothest upgrade path will be the one to dominate in a few years’ time. Magento is well aware of this, and is working to ease the migration path.