Technology Update: Magento and Yahoo host the most

September 18, 2012

Magento powers 12% of top e-retail sites and Yahoo drives 10%, a study says. Magento Inc. hosts 12% of the top 1 million e-commerce web sites as measured by traffic volume, according to data from audience measurement company Quantcast Corp. and Internet marketing research firm infoAnalytica Consulting Pvt. Ltd.

Magento, a unit of eBay Inc., stands to maintain its lead because its offerings appeal to a broad swath of sites, says Jaya Gali, a senior consultant at FitForCommerce, which helps retailers plan their e-commerce technology. That stands in contrast to Magento’s closest competitor, Yahoo Inc., which hosts 10% of the top-visited e-commerce sites, Gali says. “Magento will have aggressive growth because its board offerings go beyond small business stores that are most often embracing Yahoo,” she says. Yahoo, she says appeals to micro–that is, retailers with perhaps with a single employee—and small businesses. Yahoo declined to comment.

Magento sells separate platform packages for small and mid-size retailers, which has helped the vendor penetrate a broad array of e-retailers since it launched in April 2007, Gali says. Magento Go, the vendor’s Internet-hosted software-as-a-service, or SaaS, platform, “competes well with the Yahoo Store out-of-box store solution to support micro- to small-size businesses of $5 million to $10 million in revenue,” Gali says. Meanwhile, the enterprise version is a mature platform able to address complexities involved in deploying and growing an e-commerce site for businesses with annual online sales ranging from $10 million to $70 million, she says.

“It is not surprising to see the increased market share of Magento and we might expect to see more of a land grab in the coming years,” Gali says, referring to the growing number of sites it powers. “Much of Magento’s success is due to its focus on customer community development via an open-source platform since the product’s inception.”

Such community development has led to a number of software add-ons, such as one to integrate an e-commerce site with QuickBooks or a live chat service, that have increased the functionality of the Magento platform, with ongoing development in areas such as mobile commerce and e-mail marketing, noted by Magento at its annual conference earlier this year. Because Magento’s base of software is open-source—meaning any software developer can use the Magento software code to make her own changes and build upon it as part of a user community—the company has been able to rapidly increase its offerings and keep abreast of new technologies, Gali says. Its backing from eBay also helped grow its brand value, she says.

Besides Magento, Gali says vendors Big Commerce and Volusion are also on the rise. Big Commerce recently introduced a hosted and fully managed software-as-a-service platform, meaning retailers pay a monthly subscription fee to access software on Big Commerce’s servers rather than investing in the hardware and licensing software themselves. That, plus the vendor’s free trial offer and pricing, which is a flat rate instead of the revenue-sharing model of many other vendors, helps it compete in the market for smaller retailers, Gali says. Big Commerce subscriptions start at $24.95/month and go up to $299.95/month.

Meanwhile, Volusion continues to release new features and compete with Big Commerce’s hosted model, she says. Both companies offer personal support to help ease the set-up and launch process, a strong attraction for clients.

After Magento and Yahoo, the data rank the next top e-commerce platform providers and their hosting shares as:

  • VirtueMart E-Commerce Solution, 8%
  • Volusion Inc., 8%
  • Zencart, from Zen Ventures LLC, 8%
  • osCommerce, 7%
  • Miva Merchant, 7%
  • Big Commerce Pty. Ltd., 5%
  • WP e-Commerce, a WordPress plug-in, 3%
  • Ubercart, 3%

Myriad other vendors or homegrown systems host the remaining sites, each with less than 3% of the pie, the data say.

Lexity, an e-commerce app development company, asked infoAnalytica to conduct the platform-share study to examine the e-commerce platform market landscape, says Lexity CEO Amit Kumar. Lexity provides a platform that developers can use to build apps that work on more than 30 e-commerce sites, including ones from Magento, Yahoo and Shopify Inc.