Magento Commerce: History and Features of The Most Popular eCommerce Platform
In this article we are going to review how Magento eCommerce was born, why it became popular so fast, when the different versions appeared and what functions the system has, following its path all the way until today, until the most modern developments.
The debut of Magento Commerce wasn’t simply the appearance of a new system in ecommerce.
It was not by chance that it became one of the most popular systems in an incredibly short period of time, and it got the immediate attention of the major brands as well.
The previous systems, no matter whether they were open-source code software applications or commercial editions, never provided enough flexibility: operators of online shops always had to make compromises.
The open-source code allowed, of course, that the platforms could be shaped, however, most of the time this involved an extremely long development time and you needed to expect security problems and many times inappropriate integration.
It provided a powerful, easily shapable, flexible and scalable system that any brand could customize to its corporate image and needs – and still can today.
Magento was introduced on 31 August 2007. The two fathers of the system were Roy Rubin and Yoav Kutner working for Varien.
Magento was first planned to fork a then very popular software application, osCommerce.
However, in the end, they thought at Varien that the envisioned system had more potential than that, which is why they made a completely separate software application.
The name Mageto was derived from the colour magenta.
In 2005, when the logo design was under development, Rubin and Kutner wanted it to be of magenta colour despite the fact that no one else liked the idea at the company at the time.
As the domain magenta.com had already been registered, they examined some variants of the word and the “more masculine” Magento name popped up.
That’s how the name “Magento” came into existence.
Listen to the story here told by Yoav Kutner himself (from 23:25) – MageTalk Episode 50
The primary reason for the two developers making the decision of introducing an entirely new basis for the development was because they felt that the heritage of osCommerce tied them up too much: they could not build in all the functions they dreamed they would.
At Varien, they thought that osCommerce was not only incapable of providing the appropriate background and stability, but that it simply lacked the necessary flexibility.
So they started to build a system that could be shaped freely by anyone in a way to properly satisfy their own needs.
For this reason they completely rewrote the already started software application according to the new concepts, leaving the entire osCommerce basis behind.
Not so much later, on 31 March 2008 the first stable version was released: the open-source code Magento Community Edition, downloadable free of charge.
Did you know? Magento was named after the colour magenta, the colour of its first logo. Click To Tweet
In 2009 Bob Schwartz joined the founders and became president and then worked hard to globally make Magento successful.
Some interesting highlights in Episode 123:
“(To me) Magento was supposed to be one of many companies. … Do a three to six month gig, and I’ll do it maybe half time.”
“What means the most to me is … over half a million people wake up every day and make the majority if not all their living because Magento exists. That’s developers, that’s SI’s, that’s merchants…”
Popularity came fast
The system was a great success, and soon found supporters. Many e-merchants recognized the possibilities lying within: how much they would be capable of with such a flexibly usable, versatile piece of software. The fact that such a flexible system was created was due to the developers focusing on extensions during the building of the system, right from the beginning:
They created a system that could be freely extended and modified any time according to the needs of the given ecommerce store.
Popularity of Magento was rapidly increasing: in March 2009 it was more popular than its “ancestor”, osCommerce.
And only a few weeks later, the first stable version of Magento Enterprise Edition was released.
This was a logical step: even the biggest brands were actively interested in Magento by that time, however, the necessity of a version that could actually satisfy their needs appeared.
Magento Enterprise Edition practically provided unlimited customizability and at the same time Magento’s own developers personally helped its users.
This was the turning point that fixed Magento’s position as being an ecommerce platform that is actually useful for those looking for higher level ecommerce solutions.
Enter eBay and integration
The next major milestone in Magento’s life was in 2011. The majority of their shares was acquired by eBay in February of that year, and the giant ecommerce company became the sole shareholder in June.
Most people didn’t see the significance of this, they thought the change of ownership would not have any major effects on the lives of the average Magento website users – however, these people failed to see the fact that eBay was also owner of another company, namely the quite well-known PayPal online payment service.
So the acquisition really meant that the PayPal payment option was perfectly and permanently integrated into the Magento eCommerce system. And this was just one of the countless integrations that Magento offered its users.
Popular services like Zendesk, Mailchimp or Salesforce, and the countless other extensions gave so much freedom to the users of the system, like no other platform had given before, not to mention how superbly the system was capable of working together with the Google Analytics service.
Google Analytics is essential for all ecommerce stores: optimization of the pages, content strategy, segmentation of customers would all be impossible if Analytics didn’t provide the users with heaps of data.
Finally, the company changed its name in 2010: Varien officially became Magento under the guardianship of eBay.
A huge and committed community has formed behind it in the last few years, which is present not only online. Magento organized its first official conference in 2011 that more than 800 people attended. The Magento Imagine conference organized in 2014 in Las Vegas was already attended by 1700 people.
Some recent developments:
- Magento Developer Certification was announced also in 2011: at this point the company officially started training developers who are capable of professionally dealing with the system.
- 2012 represented a new record: the open-source code system was downloaded more than 4 million times, and it was used by more than 150,000 online shops throughout the world.
- In 2015 Magento became independent again as a consequence of the restructuring of eBay: its new owner, Permira, a private equity firm, thought it would be better to unleash the developers.
- On 1 August 2016 Magento acquired RJMetrics, a company dealing with cloud based analytical services, which had already been explicitly targeting e-merchants. This is the first acquisition since the company became independent, so it’s a huge step, as it opens the way for advanced business intelligence for SMBs, offering the integration of more accurate analytical solutions, thus facilitating customer acquisition and the increase of conversions.
- In January 2017 Hillhouse Capital, one of China’s most prominent funds, made an investment of $250 million to help Magento grow further especially in the Asia Pacific region in terms of sales, marketing and client support creating new offices and focusing more on R&D.
- In March 2017 the well-known Frost & Sullivan business consulting firm awarded Magento the 2017 Global Ecommerce Platforms Product Line Strategy Leadership Award, recognizing the platform’s excellence in providing businesses with the ability to deliver a custom experience to shoppers and differentiate and define their brand.
- Major announcements by Magento at Imagine 2017 in Las Vegas: Digital cloud for B2B companies – it “allows merchants to handle complex B2B commerce requirements out-of-the-box, enabling them to simply and cost-effectively adapt business models and meet the needs of digitally-connected customers”; Magento Shipping – it “provides merchants with out-of-the-box access to leading regional and international carriers to automate fulfillment, drive cart conversion, uncover new revenue and expand addressable markets”
Eight years after Magento’s system was imagined at Varien, in 2015 Magento 2.0 was finally released.
The renewed platform contains new APIs that make the integration of new, modern services even simpler for the developers, and they even paid attention to fine-tuning the payment system according to the requirements of today’s needs, thus making the maximization of conversions possible.
The disadvantage of the new system is that if you want to switch from the core Magento eCommerce system, you practically have to rewrite everything from the basics, migration is almost impossible.
The data are transferable with different tools, however, you have to give up on transferring the unique themes and extensions.
A set of modern technologies were built in the new software, which greatly facilitate development work and make the operation of the online shop faster as well:
- PHP 7
- Varnish (entire page cache for quicker use)
- Modern JS Stack
User experience also improved: when reviewing the order, you can also see the photos of each product, checkout became much quicker and simpler (it has been reduced to only 2 steps), and even entering the bill-to address is not obligatory anymore.
Also, the system supports several payment systems (WorldPay, CyberSource, Authorize.Net), which have not been integrated before.
The popularity of Magento 2 is steadily increasing as more and more ecommerce businesses realize that they either need to “upgrade” their Magento 1.x website or have their brand new web store developed in Magneto 2 right away.
The Magento 2 usage statistics provided by BuiltWith show a steep increase among the Top 1 million sites and also tell us that currently (May 2017) there are more than 10,000 live websites globally using Magento 2.
The first stable version, Magento Community Edition is published. Not much later 1.1 comes out as well, in which API can be found, it can handle both bundled and virtual products, and it also has individual product settings.
1.2, in which downloadable products, layered navigation and FTP appear, is released in the same year.
CE 1.3, which introduces catalogues, is released. However, what’s bigger news is that Magento Enterprise Edition sees the light of day, which has version number 1.6 at its launch.
The year when CE 1.4 and EE 1.8 versions are published, bringing important changes in customizability of appearance, they introduce widgets, WYSIWYG editor and other novelties.
With CE 1.6 and EE 1.11 versions, handling several databases simultaneously from a single Magento website interface becomes possible, thus allowing you to simply and comfortably manage several ecommerce stores running parallel.
In the shaping of the appearance of CE 1.7 and EE 1.12 even more freedom is provided by the introduction of mobile theme, but the automatically generated coupon codes also appear, just like the possibility of pricing the products according to user groups, and REST API as well. The system is in line with the cookie regulation of the European Union, and even CAPTCHA appears.
The year of CE 1.8 and EE 1.13. The new versions bring more developed price calculation options, while EE gets a new indexing.
In case of versions CE 1.9 and EE 1.14 you already have the possibility of using infinite themes, just as responsiveness is added to the system with the obvious expansion of the mobile era, also including responsive emails.
The long awaited Magento 2, the newest, completely modernized version of the ecommerce platform is released. Several functions have been renewed, and the architecture of the system has also changed compared to the previous versions.
Magento 2 was announced already back in 2010, however, its development took much longer than planned: originally it was supposed to be released in 2011, but in the end, its beta version came out only in July 2015. Since then, versions Magento 1.x and Magento 2 have been running alongside each other, however, only the latter system is being actively updated by the developers at the moment.
In July 2016 Magento 2.1.0 CE and EE was released.
Main features of the new Community Edition:
PayPal developments: solutions facilitating the increase of conversions, saved bank cards implemented in order to simplify repeat purchases
Braintree hosted fields: it collects payment information securely, while the process of checkout is still being under full control
Improved management interface: faster and easier searches in the Admin, enhanced new product, category and CMS content creation
Main features of the new Magento Enterprise Edition:
Content update: simple content creation, content preview and content timing (e.g. for products, categories, CMS content, promotion, pricing)
Elasticsearch: a revolutionary search solution replacing Solr, it’s scalable with the increase of search traffic, it flawlessly manages large size catalogues as well, it handles 33 languages by default
PayPal developments, Braintree hosted fields, Improved management interface (see CE version)
Magento Commerce Cloud enhancements – advanced Shipping, Business Intelligence, Content Management and Social Media Capabilities were developed, to be available to all 260,000 merchants around the globe from the summer of 2017.
Magento Go was a cloud based version of the software application, released in 2011, which is no longer available.
Its purpose was to offer an option for the small enterprises that did not require the installation of the software, as the system was entirely run from the cloud.
At the same time, this was (obviously) the least customizable version, it was exactly Magento’s flexibility that was lost. Finally, in February 2015 the Magento Go platform ceased to operate for good.
Magento Enterprise Cloud Edition
The latest cloud based solution was announced recently, at the 2016 Magento Imagine conference.
The system uses Amazon AWS’s cloud service, thus allowing greater scalability for the corporate clients without having to establish on-premise systems to be able to use their Magento website.
Having learned from the mistake of Magento Go, there will be no limits whatsoever set to customizability in this version.
Since we have praised flexibility, scalability and customizability of Magento eCommerce so much, it will do no harm examining a bit more deeply what features you can work with if you decide to choose this system as the engine of your online store.
So let’s see what the Magento platform offers, for which hundreds of thousands of ecommerce stores are built on it throughout the world.
Complex system with complex features
Using Magento eCommerce cannot in the least be considered easy. It was not at all made for those who are beginners in ecommerce, and if you have not yet come across an administrative interface more complicated than an online word processor, it’s guaranteed that you won’t be able to handle it smoothly.
At the same time, it will be a great friend of those who are capable of understanding even the more complex admin interfaces: they will be able to manage everything in the same place, from analytics through the simultaneous operation of even several parallel online shops, to the data of the products and the users.
Design and templates
If you want to customize Magento in its appearance as well, you have practically unlimited possibilities. All you have to know is where exactly you should look for these.
The Magento company itself doesn’t offer templates for purchase or for download, so looking for those would be in vain.
For ready templates you can visit Magento Connect that presents the most creative solutions of several design companies –, solutions you can then tailor to your corporate image provided you have the appropriate expertise.
ThemeForest is another place where you can keep looking, and you can come across countless Magento store themes, each of which your ecommerce store can apply righat away or just with some minimal modifications.
At the same time, it has to be mentioned that in case you want to customize your online shop to a greater extent – and the Magento platform’s biggest advantage is exactly this kind of flexibility –, you may need professional developers even for the development of the design, who will guarantee that nothing goes wrong during the process.
There’s definitely no doubt that you are immediately able to choose from several thousands of themes, which you will be able to shape according to your own taste later.
Of course there are some that are freely downloadable, however, the really good ones are paid solutions, in a price range between 50 and 100 US dollars.
A Magento store is highly capable of performing stock management tasks, with its help you can continuously follow how much of what you still have in stock, which products are running out of stock, which you can freely advertise and which you need to immediately reorder.
Of course it’s part of management that you can set everything yourself: what is considered little or few, when is the storage complete, and when does your system have to warn you that there’s time to contact your supplier.
Certainly, you can sell virtual, downloadable products as well with Magento – in this case you can set that an unlimited number of items are included in the inventory.
If you are selling e-books, software applications or other digital products in your ecommerce store, that doesn’t represent even a little bit more of a challenge to Magento eCommerce than if you offered T-shirts, socks or electronic devices.
At the same time, you should know about the inventory management function that it has only a basic functionality: no matter how useful it is, it’s unable to substitute an ERP system, in which you can effectively manage even several warehouses and premises simultaneously. Of course integration of external ERP systems is also possible.
It can be said without exaggeration that this is an area in which Magento eCommerce beats most of the open-source code or commercial edition systems on the market.
It’s expected from an ecommerce platform to be able to handle any kind of product, however, this remains a pipe dream in most of the cases.
While you can organize a physical shop as you like, you write whatever you would like to on the boards and on the price tags, this is a bit more complicated in the online world.
- Food will have expiration date,
- a vehicle will have weight,
- a screwdriver set will have number of pieces.
You can work with an infinite number of attributes, and the appropriate flexibility necessary for this is missing from most of the systems.
Naturally, Magento is an exception in this respect.
You can define any kind of attributes in the system, and you can even freely work with them: the users will be able to filter, narrow down searches according to these, until they find the suitable product. (You can read about how exactly you need to handle product attributes in the Magento ecommerce system in this article.)
Marketing and SEO
Another great strength of the system. Of course, integration of a few external tools like HubSpot or Buffer and Hootsuite ensuring social media automation still can fit in the system, however, it still has outstanding functionality compared to other systems.
Due to the integration, praised so much earlier, Magento practically offers everything you may need.
The platform is capable of defining cross-sell and up-sell offers, of converting the customers in many different ways.
SEO works automatically, but at the same time Magento falls a little bit behind in this field: it’s not that perfect for search engine optimization, mostly because of the searches that automatically generate a great deal of individual pages.
On the other hand, you can easily counterbalance that with more focused attention and a good content strategy.
- Holiday Dashboard – This cloud analytic service helps merchants better analyse holiday campaigns as well as compare their performance with competitors.
- Partnership with Adobe – In September 2016, Magento and Adobe announced a new partnership focusing on delivering e-merchants solutions for providing their customers with a consistent, high standard, personalized user experience and promotional tools to achieve better engagement and loyalty.
- Partnership with Acquia – Acquia, providing cloud SaaS for building, delivering and optimizing digital experiences, announced a partnership with Magento in November 2016. Thanks to this cooperation, clients can utilize Acquia’s highly advanced content management and personalization solutions while enjoying Magento’s flexible commerce capabilities.
- Partnership with Nosto – In March 2017, Nosto, a personalized shopping experience solution provider, was selected by Magento as a Premier Technology Partner. This allows merchants to show personalized recommendations not only on their websites but also in email and on different social networking sites.
In Magento ecommerce stores you are free to decide how customers can pay:
- you can tie it to registration,
- you may allow the checkout for guests as well,
- you can use a single-click payment,
- but you can also offer more complex solutions,
- moreover, billing the purchases later is also possible.
The system automatically displays the costs – the price of the products added to the cart and the delivery costs as well – at the necessary points, not to shock the customers in the end.
And by the way, the whole payment process has been optimized by default in a way that you can realize the highest possible conversion with its help.
Certainly, you can further fine-tune that if necessary, based on your own needs, after having studied the behaviour of the specific customer segments.
Data protection and security
The developers tried to build Magento eCommerce in a way that no exploitable back doors or vulnerabilities remain (or in case they find such things, the patch arrives immediately).
On the other hand, security depends also on how you operate your own online shop, what extra protection you equip it with, what sort of server you run it on, and so on.
So the company is trying to give you all the support to be able to operate a secure online Magento store: their Security Center welcomes Magento users any time turning to them with questions and problems.
Online shops of lots of major brands run on the Magento platform currently, and these can’t afford even the slightest chance of their customers’ personal data getting into unauthorized hands.
(Of course it’s also important what kind of extensions you are using, because if you purchase from less known module producers, it may occur that the security gap is created because of the extension.)
Generally, of course, you don’t need to be worried even if you don’t have a budget of several thousands of dollars for cyber protection: the Magento platform is one of the most secure ones among the open source code systems, which you can freely entrust with the data of your business and your customers as well.
Support and community
Developers of the Magento team operate a customer service only for Magento Enterprise users: they provide an opportunity for the large enterprises to consult them in person as well. At the same time, they don’t leave the smaller ones completely alone either.
On the one hand, you can find an amazing quantity of training material not only on sites dealing with Magento, but also on the website of the company itself.
So with a little patience you can learn practically everything about the installation, management of the system, and also about the solution of eventual problems.
And if this hasn’t been enough, the good news is that there’s an enormous developer community behind Magento.
Many thousands of enthusiastic professionals deal with the development, shaping and customizing of the system around the world, who you can find any time on the appropriate websites, forums, community sites, and there’s a good chance of you getting professionally substantiated answers even to your most complicated questions.
ERP systems that can be connected with Magento eCommerce
Magento eCommerce is also capable of being synchronized with ERP systems.
Corporate governance systems can be applied superbly in case you want to set the company on a growing path, if you want to ensure the proper allocation of resources – and due to its flexibility, Magento’s programming interface can be connected to several systems like that.
The most important ones are:
- Microsoft Dynamics AX: it’s a really good choice for multinational corporations, it provides a comprehensive financial, human resources and management solution.
- SAP: a system that can be applied in more than 20 industrial areas, small- and medium-sized enterprises and large corporations can also be found among its users.
- NetSuite: a cloud based system that provides real-time data for the users, thus making the elaboration of reports effective, and thus supporting and facilitating decision-making.
Magento Marketplace is the biggest global ecommerce website where you can find applications, services, extensions and themes, which help you in customizing, optimizing your Magento ecommerce system, and in increasing conversion rates.
This platform is intended to entirely replace Magento Connect, at present they are running parallel.
You can find both free and paid download options: you can browse through several thousands of products, among which you will almost certainly find the ones you need.
And that is because there’s a huge intellectual base behind Magento: thousands of developers who make the most creative and extremely diversified extensions to the system, which can make the lives of e-merchants easier.
From November 2016, Magento 1.x extensions have also been available in the Magento Marketplace.
As Magento has grown to be one of the most professional and most wanted ecommerce platforms available, obviously, a great demand arose for developers who are perfectly familiar with its development.
Major brands cannot afford to hire professionals who are not perfectly aware of Magento’s official development policy – this is exactly why Magento’s trainings were created.
The certifications issued by the company guarantee that the given developer can deal with the challenges of Magento: that he solves the problems, that he’s capable of tailoring the system completely to the needs of the given business.
Magento Certified Solution Specialist
Those who obtain this certification can declare that they have a comprehensive knowledge of the Magento ecommerce application according to the best practices, and thus may become valuable employees of any online business.
Front End Developer Certification
This certification justifies that the developer is an expert in Magento frontend, that he or she perfectly understands how the appearance and the admin interface of the platform can be customized, how the user experience in the online shop can be optimized.
Certified Developer and Developer Plus
Higher level certifications that justify that their owner is capable of handling inventories, catalogues, checkout processes, widgets, plugins and extensions – he has a higher level overall knowledge of how to shape Magento’s system to the tiniest details.
The biggest Magento event in the world, which was organized for the first time in 2011.
The event traditionally takes place in Las Vegas that several thousands of participants visit from more than 45 countries in order to learn, listen to or to give lectures, or to build relationships with other professionals.
The conference of 2017 will be sponsored by big names like eBay, Rackspace, Symantec, and numerous other leading technological companies.
A series of events continuously ongoing all over the world: this is not a single event, but a series of get-togethers where the developers working with the Magento system can meet, exchange ideas and discuss novelties.
Its great advantage is that it helps connecting the professionals from all around the world.
DevelopersParadise is a conference, organized by Inchoo, dedicated to top Magento developers. During the four days long event experts share their first-hand experince with each other, discuss great topics of Magento 2 and having great fun „in the sun” all day long.
A few numbers about the conference: 200+ attendees, 25+ talks and 3+ parties.
We definitely recommend this event to everybody who would like to learn about the most recent insights and how-to’s of Magento 2.
In our previous articles we have already mentioned that Magento, compared to other platforms, has been one of the most popular ecommerce systems for years, and that’s not by chance.
Although it may not exactly be ideal for smaller enterprises and beginner e-merchants due to its complexity, still, many tens of thousands of ecommerce stores run on it, and several of the world’s biggest brands operate their own online shops on Magento bases.
All this is the result of long years’ of hard work: the developers have built an amazingly enthusiastic, professional community including a lot of experts, who are continuously maintaining Magento while they ensure with newer and newer developments that the system meets the changing requirements, like for example the challenges of the mobile era.
It can satisfy practically any need within the limits of ecommerce. The heaps of extensions, integration, the freedom of scaling and shaping ensure that Magento doesn’t have to be worried about its leading role.
And the next few years promise to be quite exciting: since Magento 2 has just started to try its wings, and for the time being we don’t know for sure what new possibilities will open up with the introduction of the new architecture.
It’s quite sure that Magento eCommerce will dominate the 2010s in ecommerce, thanks to the fact that two developers at Varien dared to dream bigger than just making a simple fork branch of a previous system and instead they created the platform, which is today the obvious choice of any bigger company aiming to achieve major successes in ecommerce.
While among the Top 1 million websites WooCommerce leads the ecommerce market, in the Top 10k sites range Magento is the No. 1 ecommerce platform (according to BuiltWith’s data, May 2017):
Sales Worth $101 Billion With Magento Stores
IDC research estimated that merchants using the Magento platform made sales globally worth $101 billion throughout 2016.
- Global transaction volume – Merchants sold over $101 billion in 2016 to nearly 51 million customers.
- Expansive economy – Merchants, in all kinds of sectors, sell a wide range of products, from IT and business services to clothing and electronics. More than 60% of Magento merchants are in both B2B and B2C.
- Worldwide jobs – There are over 280,000 Magento-specific jobs, including developers, merchants and partners.
- Outpacing digital commerce – Magento is expected to grow faster than online commerce in general. In 2016, the ecosystem collectively generated $4.2 billion in revenue and is expected to grow to $14.2 billion by 2020.