Now that we have a basic understanding of licensed solutions, we should now disucss the other end of the spectrum. Hosted ecommerce solutions utilize the Software as a Service (SaaS) model.

What is SaaS?

Wikipedia explains that SaaS is s a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. Typically the company that created the software will host the software on their own servers and charge a monthly fee to its users.

Why should I use it?

Since its an on demand service, and the company is the one hosting the software, you don’t have to go looking for a host that can support your store. You also don’t need to be very technical to start your store. Brenden from Repeater Store also noted that a major reason people choose a SaaS shopping cart is the ease of you. They “are the easiest to get set up with, the most straightforward, and have the lowest barrier of entry.” When starting out, this can be a lifesaver.

Typically, hosted solutions also have their own tech support. This means there is someone available for you to always contact when you have questions. Should some problem arise, you can pick up your phone and there is someone to call. You don’t usually have to pay for tech support as its included in the monthly price.

Nathan Shackles from Racarie Software notes that in any industry, particularly software, software can become obsolete fairly quickly. “It can become out-dated very quickly. With the speed of software/technology progress, you can buy a licensed software product and within a year or two it’s already out-of-date and much better products are out on the market,” Nathan explains. When using a hosted solution, updates are deployed to all users when they’re available, at no cost to you.

What is wrong with this model?

Another valid point that Ernesto made was that “you are always at the mercy of the provider” when choosing a hosted solution. As we discussed in the licensed section, you are limited to what you can and can’t do with the software. “If you play in their sandbox, you have to play by their rules” as Ernesto says. Its a very true statement. If you decide to use a hosted shopping cart, you really need to make sure that it meets all your needs before committing. When you start using software and find out that a certain feature is lacking, you don’t have an option to really fix it. You are limited to the features the shopping cart you use has.

You will be paying a fee every month for as long as you are using the software. This amount adds up. With licensed software, you pay a one time fee for the license, and then you pay a cheaper monthly price for the server. With the hosted shopping cart solutions, you will pay a premium monthly price (can range from $50-$500+). The price is inflated to account for development, hosting, support, and any other reasons. And some shopping carts also charge overages for bandwidth. This can be an issue so you really need to monitor this as the costs can be insurmountable.

Another issue with having the software hosted on someone else’s server is that should it ever go down, you’re pretty much helpless. You don’t control the servers or the hosting so if something breaks, the company is in charge of it. The best you can do is call and complain and try to get some money back.


What are your thoughts on hosted solutions? Do you like the SaaS model? Or do you think its a waste?

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