Medusa vs Magento: Total cost of ownership

Magento, compared to Medusa, may lead to higher long-term costs due to its licensing model and the risk associated with the gradual decline in the popularity of the PHP language.

Read in the article how we came to these conclusions by analyzing the cost structure of Medusa and Magento.

This is part two of our guide comparing these platforms. If you want to learn more about their speed read - "Medusa vs Magento: Performance comparison".

What is the Total Cost of Ownership (TCO)?

Total Cost of Ownership (TCO) encompasses all the expenses associated with acquiring and operating an eCommerce platform. It's not just about the initial investment in the software or setup fees. It also includes ongoing operational costs, such as development, integrations, infrastructure, licensing, operational costs, and more, over a specified period.

Why TCO Matters?

Understanding TCO is pivotal for CEOs and CTOs as it offers a clearer picture of long-term expenses, aiding in budgeting and strategic planning. A comprehensive TCO analysis ensures no hidden costs and helps businesses invest wisely, optimizing return on investment (ROI).

TCO Components

• Initial Costs: These include the purchase price of the platform, setup fees, and initial development costs to get the eCommerce site running.
• Ownership Costs: These involve ongoing expenses like maintenance, support, upgrades, hosting, and any additional feature development.

Specifically, TCO covers:

• Development: Costs related to customizing and configuring the platform to meet business needs.
• Integrations: Expenses for connecting the eCommerce platform with other systems (CRM, ERP, payment gateways).
• Infrastructure: Hosting and related IT infrastructure costs.
• Licensing: Fees paid for using the platform, particularly significant for commercial platforms like Adobe Commerce.
• Operational Costs: Daily operating expenses including staff training and customer support.
• Research and Development: Investments in new features or solutions to stay competitive.
• Upgrades and Fixes: Regular updates and patches to ensure the platform remains secure and efficient.
• Other Costs: Miscellaneous expenses such as marketing tools or additional services.

Initial Costs: Medusa vs Magento

This section compares Medusa's and Magento's (Adobe Commerce) initial costs, focusing on licensing, development, and setup fees.

Licensing Fees

• Magento (Adobe Commerce): Licensing fees are a significant part of the initial costs when opting for Magento. The cost can vary based on the edition chosen (Commerce or Cloud) and the annual Gross Merchandise Value (GMV). For small to medium businesses, this could mean an initial investment ranging from $22,000 to $125,000 annually.
• Medusa: As an open-source platform, Medusa shines with its $0 licensing fee. This significant cost-saving measure allows businesses to allocate funds to other areas, such as customization and integration.

Development Costs

• Magento: The complexity of Magento results in higher development costs. For a basic storefront, businesses might find themselves investing anywhere from $30,000 to over $100,000, depending on the level of customization and functionality required.
• Medusa: Leveraging the widespread JavaScript developer community, Medusa's development costs are typically lower. A basic but functional storefront could start around $20,000, with costs varying based on the project's complexity and custom features.

Setup Fees

• Magento: Beyond the licensing and development, Magento may also involve additional setup fees, especially if premium extensions or themes are considered. This could add several thousand dollars to the initial investment.
• Medusa: Given its open-source model and flexibility, Medusa allows for more cost-effective setup options. The use of open-source components and libraries can minimize or eliminate setup fees.

Integration Costs

• Magento: Boasts an extensive plugin marketplace but often requires additional licensing fees for many plugins. Customization of these plugins to meet specific needs can lead to further development costs.
• Medusa: Lacks a large plugin marketplace, meaning many integrations must be developed from scratch. This ensures solutions tailored to precise business requirements but involves upfront development costs.

Summary: Initial costs

The initial cost analysis highlights Medusa's financial advantage over Magento, primarily due to the absence of licensing fees and lower development costs. This cost efficiency makes Medusa an attractive option not only for big enterprises but also for startups and small to medium enterprises (SMEs) looking for a scalable and flexible eCommerce solution without the huge initial investment.

Ownership Costs: Medusa vs Magento

Ownership costs encompass the ongoing expenses required to operate, maintain, and scale an eCommerce platform after the initial setup. This section compares ownership costs between Medusa and Magento, covering aspects such as hosting, maintenance, updates, and support.

Hosting Costs

• Magento (Adobe Commerce): Hosting is a substantial part of Magento’s ownership costs. While the Commerce Cloud edition includes hosting, it is significantly more expensive. Hosting costs can range from $500 to $2,000 per month for self-hosted Magento Commerce installations, depending on the infrastructure's scale and complexity.
• Medusa: Hosting a Medusa server, especially for scalable, high-traffic environments, can be comparable to or even exceed Magento's costs. This is due to Medusa's requirement for a Node.js environment, which may necessitate more specialized and expensive hosting solutions. The costs can vary widely but are likely to start from a few hundred dollars a month for basic setups, scaling with the complexity and traffic needs of the eCommerce platform.

Maintenance and Updates

• Magento: Regular maintenance and updates for Magento require specialized developers, contributing to higher ongoing costs. The platform's complexity and the need for expert intervention for updates can add significant expenses to the ownership costs.
• Medusa: While Medusa benefits from a vibrant open-source community, maintenance and updates may still incur costs similar to Magento when accounting for professional support or development services. However, the widespread familiarity with JavaScript may offer some cost advantages regarding developer availability and hourly rates.

Support and Additional Services

• Magento: Adobe Commerce subscriptions include professional support, which is especially beneficial for businesses using the Cloud edition. Yet, additional or specialized support may necessitate extra expenses.
• Medusa: Support for Medusa primarily comes from its community and third-party consultants. While this can offer some cost savings and flexibility, the need for professional services, especially for complex customizations or troubleshooting, might lead to support costs comparable to Magento’s.

Summary: Ownership Costs

The ownership costs associated with Medusa, particularly regarding hosting and server requirements, are comparable to those of Magento. Both platforms require careful consideration of the total cost implications, including hosting, maintenance, and support services. While Medusa offers an open-source advantage, particularly in JavaScript expertise availability, its hosting and maintenance requirements can still present significant costs.

Despite similar infrastructure and operational expenses, we need to remember Magento introduces an additional significant cost every year in the form of a licence fee. This recurring expense significantly impacts the total cost of ownership, making Medusa, with its license-free model and scalable architecture, emerge as a compelling choice for enterprises seeking to balance robust eCommerce capabilities with financial efficiency.

Development Costs: Risk related to the changing popularity of the programming language

While today's development costs for Medusa and Magento might seem similar, they could shift in the future due to the programming languages they use. Medusa is built on JavaScript, a language that's the most popular and widely learned (Stack Overflow surveys), making it easier and potentially less costly to find developers.

Magento, on the other hand, relies on PHP. It's a solid language, but not as many new developers are learning it. This trend might lead to a shortage of PHP experts, making hiring them pricier.

What This Means for Your Business?

If you're planning for the future and want to keep costs down, Medusa might be the way to go. It uses a language that many developers know and love, which could save you money on building and updating your site. With Magento, however, as PHP developers become harder to find, you might end up paying more for their expertise.

Conclusions

Both platforms have their unique cost structures.

With Magento, the financial commitments cover the licence fee and any additional paid plugins necessary for your business needs.

Medusa, on the other hand, shifts the investment towards backend customization, emphasizing the development of new functionalities and crafting dedicated integrations.

In Magento, you will pay for a licence and paid plugins. In Medusa, you will pay for developing new functionalities and dedicated integrations.

Medusa presents a compelling case for businesses prioritizing flexibility, scalability, and lower long-term costs.

Adobe Commerce, while robust and feature-rich, may lead to higher long-term costs due to its licensing model and the risk associated with the gradual decline in the popularity of the PHP language.