A busy week for Magento

This week, a lot of things happened in the Magento universe. New announcements have been made at the Imagine eCommerce conference, and as of yesterday, it is now official that eBay holds a 49% share in Magento. But let’s put these things in order.

For the Imagine eCommerce conference which took place February 7-9th, Magento Inc. invited 650 community members from around the globe to present new products and services as well as to discuss the various technical and non-technical aspects of doing eCommerce with Magento. From what I could gather from the web (I couldn’t be there in person), the highlights were:

New software versions. As could be expected, Magento released new stable versions of their three software editions, including CE 1.5.0, PE 1.10.0.0 and EE 1.10.0.0. Unfortunately, a severe vulnerability was found in CE 1.5.0.0 shortly after its release, which has now been fixed in the CE 1.5.0.1.

Software-as-a-Service. Some time ago, Magento has started developing an on-demand service for their software, hitherto named Project Stratus. Under the new name Magento Go, the company enters the realm of on-demand software where Demandware and others have positioned themselves. In addition, in what Magento refers to as platform-as-a-service (PaaS), they enable developers to build applications around the on-demand solution the same way they did for the self-deployed versions of Magento via MagentoConnect.

(For a more detailed review, please refer to the – German – Openstream blog.)

As if this wasn’t enough already, at yesterday’s eBay Analyst day, Mark Carges, Senior Vice President Global Products and Chief Technology Officer, eBay Marketplace has revealed that eBay has acquired a 49% share in Magento last year. Of course there were rumours in the Magento community that this was indeed the case (one just has to go to the Magento admin panel to see how prominent the PayPal payment method has been made), but now it has been officially confirmed by both eBay/PayPal and Magento.

Clearly, the fact that eBay revealed its investment shorty after Magento’s announcement of its Magento go is not a coincidence. Rather, in my opinion it points to the path both eBay and Magento will follow in the next couple of years. I could imagine that eBay would like to be able to offer its sellers an alternative to its infrastructure by offering an on-demand service that gives them the flexibility to continue their growth. Currently, if say a powerseller feels that he’s too restricted by the eBay platform, he will opt for setting up his own webstore or use another on-demand-service – both ways, eBay is losing a client. For Magento, this strategy would also mean to shift its focus away from being at the forefront of eCommerce innovation to catering for the mainstream, as Jochen Krisch has suggested.

From personal experience I can say that although the Enterprise world seems lucrative at first sight – given the amount of money that’s being spent for licences, implementation and support – those projects are often very high maintenance, not just on a technical but more on an organisational level. Despite its amazing growth, with about 250 employees Magento Inc. is still a relatively small eCommerce company compared to other giants like IBM for instance – no wonder the management concentrates on more standardised (and less maintenance) products for smaller and medium customers.

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