Industry Insights

Magento to Shine, After Independence from eBay

Magento, the leading provider of open omnichannel innovation, released the good news at its annual Magento Imagine conference taking place last week in Las Vegas. The open source e-commerce platform provider rolled out its first cloud-based service, Magento Enterprise Cloud Edition, and announced the launch of its next-generation commerce applications marketplace, Magento Marketplace

In November, the company announced that it had launched as an independent company, backed by the Permira funds, four years after of its acquisition by eBay, Inc. Mark Lavelle, formerly senior vice president at eBay Enterprise, was appointed to lead the company as its new CEO and stated:

“During our time as a division of eBay, Inc., we grew revenue fivefold, made significant investments in our core platform and added innovative mobile and omnichannel products. Now, we will build on this momentum--continuing to innovate with speed and at scale while we put renewed focus on expanding our market leadership with stronger emphasis on our global network of system integrators, technology partners and developer community.”

Peter Sheldon, Head of Strategy at Magento, stated after the announcement that the company now could completely concentrate on the Magento ecosystem and merchants without distractions and politics that came from being owned by eBay. 

Gartner analyst Chris Fletcher claimed that he “never saw the synergy between eBay’s marketplace business and the former GSI commerce enterprise business [which Magento was a part of].” He also agreed with Sheldon, expecting Magento Commerce to continue evolving by focusing on businesses between $25 million to $100 million in annual gross merchandise volume as well as beating off its rivals such as Shopify, Bigcommerce, Demandware, and so on. 

Lawrence Jones, CEO of UKFast has recently commented on Magento 2.0: “If you ask me, the buzz is well deserved: there’s a lot to be raving about. I’ve learned that in e-commerce, success relies on two things: speed and user experience.  Magento 2.0 brings improved product scalability and product security, but most importantly, it is a lot faster.”
Jones made a great point about the importance of speed in the e-commerce business, as studies have concluded that a 0.5-second delay in page-load speed can reduce traffic by 20%, so every possible improvement should be thought through. 

A New Era of Commerce in the Cloud

According to the study of Gartner, Predicts 2016: Business Transformation and Process Management Bridge the Strategy-to-Execution Gap, "By 2018, model-driven, high-productivity PaaS will be the dominant technology platform for transforming into an adaptive and responsive digital business." Traditional Software-as-a-Service (SaaS) commerce solutions are not able to provide the support necessary for the complex needs of enterprise customers as they are limited by the immutable nature of some multi-tenant eCommerce solutions. On the other hand, Magento Enterprise Cloud Edition provides merchants the ability to offer highly differentiated customer experiences by managing and upgrading their own code, rather than running the same code as others in the same cloud service or waiting for one-size-fits-all updates. Also, the service enables retailers to natively integrate with existing systems and improve their ability to keep up with fast paced of the technology world. 

The head of strategy at Magento, Peter Sheldon, expects to convert most of its paying enterprise merchants, which are more than 3,100, to the new Magento Enterprise cloud service in the next 12 months at the earliest. 

Doug Heise, Global Product Marketing Director at CoreMedia AG, provides tools to manage and deploy content on IBM WebSphere Commerce and the IBM Marketing Cloud, stated: 

“Retailers that move to the cloud (Magento Enterprise cloud) can save money and time by no longer deploying software developers and information technology teams to manage computer servers and data centers, and no longer paying to buy, manage, and upgrade their own hardware.”

The Platform-as-a-Service (PaaS) runs on Amazon Web Services (AWS), making storefronts reliable, scalable, and at a low cost. Magento Enterprise Cloud Edition facilitates what is already a natural pairing for many Magento customers, as 30 percent of Magento Enterprise clients already host on AWS. 

"We are pleased to see that Magento has built its new commerce platform on top of AWS as we firmly believe that AWS offers merchants a flexible, secure, scalable and low-cost environment for online sales and retailing," said Hal Bennett, General Manager Global Technology Partners, Amazon Web Services, Inc. "We look forward to supporting Magento and their customers on their journey to the cloud."

The company confirmed that later in the year, they will introduce lower price tiers to make the Cloud Edition accessible to more retailers., the Continuous Delivery Platform-as-a-Service (PaaS) Cloud Hosting company, also announced that Magento Commerce has chosen the company's second generation PaaS for its newly launched Magento Enterprise Cloud Edition product. 

"It's an incredible validation to our technology to see such a powerful force in the global eCommerce industry make such a steep change in their product portfolio to offer their customers greater business advantage," said Fred Plais, CEO at "This is exactly what we designed to do, something well beyond a public Platform-as-a-Service, and we're excited that the impact will be so far-reaching."

Next-Generation Magento Marketplace

There was no shortage of announcements for the Magento community to be excited about during the Magento Imagine event which gathered 2200 attendees from all around the world this year. One of the biggest announcements was launching of its next-generation commerce applications marketplace, Magento Marketplace. 

It was known that Magento Connect was undergoing an overhaul, so this announcement is not a huge surprise, but it is a significant step forward for Magento. The platform works as a sort of app store for Magento 2.0 where merchants only buy high-quality technologies from the most trusted developers in the Magento ecosystem. In essence, the Magento Marketplace provides a one-stop resource for all things Magento.

"Magento has the largest commerce-focused extension marketplace and ecosystem in the world," said Steve Yankovich, CPO of Magento Commerce. "The new Magento Marketplace represents our continued investment in fueling this innovative commerce ecosystem. We are focused on offering the most value, access to the latest solutions and making the experience better for our community."

Peter Sheldon points out that there are 8,000 extensions in Connect, which is overwhelming for merchants and problematic for developers who have to deal with the issues of plagiarism from rivals. He also predicts that 23 extensions are running for the same purposes and stated that revenue generated from apps in the Magento Marketplace will be again invested in the app development activities. 

Another important point he made is that Connect will continue to function for a while, explaining:

"The existing Connect site will be available as we review and migrate extensions over to the new Magento Marketplace. Connect will not be discontinued until we are confident that we have all merchant needs covered with Marketplace."

Here are some quick facts regarding the Magento Marketplace release: 

  • 155 Extensions available

  • 405 Extensions listed as available on Magento Connect

  • 196 Extensions coming soon

  • 50+ Extension vendors

The video below explains how Magento has become the e-commerce power behind Frankfurt Airport’s first-of-its-kind omnichannel experience.

Fraport Customer Story from Magento on Vimeo.

Sticking to the Commitment of Quarterly Release

The flagship open-source Magento platform is already the worldwide leader in e-commerce, powering more than 250,000 sites globally and supporting over $50 billion in gross merchandise volume annually. When the company launched 2.0 in November, they committed to quarterly releases. Since then, the first release, 2.1, was announced at their annual conference and available later this quarter, which offers new features and capabilities. Sheldon confirmed that they are sticking to their commitment of quarterly releases. It seems like the company will keep its promise, indeed. 

What’s new in Magento 2.1:

  • Previews of Changes to Products, Categories, Content, Promotions, Pricing and Themes

  • Sorting updates by date and campaign

  • Managing changes with a comprehensive timeline

  • Automatic updates in production

  • Improved search feature

  • Background re-indexing and horizontal scaling

  • Real-time reporting, personalization and performance optimization

  • 33 Languages available 

  • Checkout without Shopper Leaving Your Site (PayPal)

  • Securely Stored Credit Cards Support (PayPal)

  • Simplified PCI Compliance

What’s coming in further Magento releases:

  • Enhanced Content Management System

  • New Promotion Types

  • Expanded Reports & Analytics

Magento B2B module available in Q3 2016

  • Account Management with Permissions

  • Custom Catalogs

  • Custom Pricing

  • Quoting

  • Repeat Ordering


Venus Tamturk

Venus Tamturk

Venus is the Media Reporter for CMS-Connected, with one of her tasks to write thorough articles by creating the most up-to-date and engaging content using B2B digital marketing. She enjoys increasing brand equity and conversion through the strategic use of social media channels and integrated media marketing plans.

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