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PaaS, SaaS, or self-hosted: which solution is best for your business?

PaaS, SaaS, or self-hosted: which solution is best for your business?

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SaaS, PaaS, and self-hosted are keywords that pop up when it comes to service and distribution models for ecommerce platforms.  The solution you choose determines your options for hosting, updates, customization, and more. Which one is best for your business case?

Sadly, genuine crystal balls are still in very short supply but it’s fairly safe to predict that digital commerce will continue to boom. According to Statista, worldwide retail online sales reached a massive $4.9 trillion in 2021 and it’s not stopping there – that figure is predicted to grow by 50% over the next four years.[1]

But increased demand for online goods and services means merchants face a big challenge. They need to ensure that their systems can cope with scaling up and that they can add exciting and useful new features easily to differentiate their customer experience from competitors. In this context, implementing ecommerce automation becomes essential, as it allows merchants to efficiently scale their operations and introduce new features seamlessly, giving them a competitive edge in the rapidly evolving online marketplace.

Merchants are better placed to meet these challenges than previously thanks to rapid developments in cloud computing. Many have already turned to cloud solutions – the global retail cloud market is expected to be worth €47.8 billion ($51.7 billion) by 2025, according to Market Research Future.[2]

Innovations mean greater choice 

They now have a choice in how to develop the right software and infrastructure strategies for their business: they can opt for an self-hosted approach and do everything themselves or choose hosted options like SaaS and PaaS.

On-premise

An self-hosted solution has certain benefits. A merchant can use the system without the need for a disruptive overhaul; the retail organization has the option to control its own hardware, software and customer data, and on-premise is generally perceived as a cheaper option.  

Of course, the need to manage all aspects of infrastructure and software will require a lot of internal know-how, and even finding employees with the right level of technical expertise can be a headache. Traditionally, with self-hosted solutions, challenges arise when it comes to scaling the infrastructure. 

However, it is possible to be self-hosted but actually, host your platform wherever you wish – not just on a localized server. This is thanks to innovations in open-source software. Merchants can buy a license for an open-source platform and use a hosting platform or cloud infrastructure that allows greater adaptability. Additionally, this flexibility in hosting can be leveraged to integrate a digital sales room, offering an enhanced and interactive customer experience without being tied to a single server location.   

For those businesses who do not want to stick with an self-hosted solution, there are other options in the form of Software as a Service (SaaS) or Platform as a Service (PaaS).

Software-as-a-Service (SaaS)

SaaS is a good choice for those organizations who want little involvement in the management of the software and want an ‘out of the box’ solution to set up quickly. The vendor handles all aspects of the software provision from the applications themselves to the way that the data is used and updates are automated.  

The Northman has chosen SaaS

Claas-Harnack-co-founder-the-Northman-Kopie“It was clear to us that we needed a cloud solution that could grow with us and for which we didn't have to worry about security or updates. As we increasingly professionalize and prepare for further growth, integration opportunities are important to us. We have found the right partner for us in Shopware.” 

“We are very happy with our store and the collaboration, and we regularly look forward to new features that enable us to have an even better store and thus even more growth.”

– Claas Harnack, co-founder of The Northman

It’s a safe option – especially for businesses who don’t have the resource to devote to installing software and updates – but it is limited in terms of customization.

Platform-as-a-Service (PaaS)

PaaS is a slightly more adaptable option that provides greater flexibility thanks to the hosting and software coming from a single source. Every customer can leverage the benefits of a service model – the top-of-the-range security and scalability, for example – but it also offers many of the benefits of self-hosted by providing more control over data and applications.  

It’s true that PaaS doesn’t come with the automatic updates that you’d receive with SaaS – users will have to manage their own updates and it may take time to be fully confident in operating the software. But that’s an indication of the high level of customization that’s available. A fully managed infrastructure means teams can focus on building ecommerce systems to deliver an all-important excellent customer experience. 

Learn more about Shopware PaaS

Phi Academy has opted for PaaS

Paul_Stuefer_PhiAcademy„We wanted as much flexibility as possible in the development of our site. Both in testing and operational development, we wanted to work feature-independently and keep release times as short as possible. [Shopwares PaaS solution] allows us to quickly spin up new instances for testing and development and merge them. This makes use-case acceptance much easier for us, as we can fit more topics into one sprint. And if we have a blocker, it doesn’t compromise the entire release. The blocked features are simply resolved out. This is working on an agile infrastructure.“

– Paul Stuefer, Head of E-Commerce & Marketing, PhiAcademy

To the full interview

Making strategic decisions on software 

There is one thing that all merchants must remember. There is no definitive answer when it comes to choosing how to implement your underlying architecture. There’s a place for hosted and self-hosted ecommerce platforms: each of them has its own advantages and potential drawbacks. Which solution to choose for your platform will be a strategic decision. 

There are several factors to consider that can help guide your choice. They include the degree of flexibility a business needs, the skill set of the technical staff running the project, the possibilities for growth, in particular, forecasts for the speed of growth, the existing legacy set-up, and your budget for investment. All of these will have a part to play in making the right decision. 

There should, however, be one guiding principle – that you have the capability to move quickly and respond to changing conditions. Three years ago, no one predicted the upheaval that the Covid virus would bring to the economy – it’s an indication of how circumstances and customer behavior can change quite suddenly. In an uncertain world, merchants will need to stay light on their feet to cope with change.  

Thanks to our open commerce approach, we can offer merchants a variety of solutions, from cloud-based offerings to self-hosted options. Neither merchants nor partners are locked into any tier for the long-term: They can switch solutions as the business grows, new opportunities are spotted, or requirements change. Furthermore, our open commerce approach provides merchants with the confidence that there is a large community of experts who can offer advice and guidance when needed.

Shopware-open-commerce-platform

What does open commerce mean?

Whether you choose SaaS, PaaS, or a self-hosted solution, all service models are based on the same code. This code is openly accessible, so you know exactly what's "under the hood". This open approach also enables and encourages a community and collaboration within the Shopware ecosystem. Partners, developers, and various experts have an eye on the code, ensure reliability and work together on new solutions and extensions.

Each merchant will know their own strengths and have their own unique needs but ultimately, they require the capability to be able to handle unexpected scenarios. Choosing the right software is an important first step to futureproofing if you can’t locate one of those crystal balls.

What about Shopware's service and distribution models?

Whether SaaS, PaaS or self-hosted: You want to learn more about Shopware's distributed and service models? Find out more about our PaaS offering here: Shopware Enterprise Cloud. For advice on SaaS, PaaS, and self-hosted, please contact our consulting team. The first questions are also answered by Shopware Support Specialist Ömer in the following video.

FAQ

What is PaaS?

PaaS is short for Platform-as-a-Service and describes a service model in which hosting and software are coming from a single source. PaaS usually offers greater flexibility and customization than SaaS models, and PaaS tends to be more secure.

What is the difference between PaaS and SaaS?

PaaS means Platform-as-a-Service, and SaaS stands for Software-as-a-Service. SaaS tends to be an "out-of-the-box" solution with limited customization options, whereas PaaS offers the most flexibility and customization for the best customer experience.

What company has a PaaS ecommerce solution?

Shopware offers one of the best PaaS ecommerce solutions on the market. Thousands of ecommerce businesses around the globe are using the Shopware PaaS product.

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