Ukrainian Software Development Market in Wartime
The article highlights the main changes and trends in the Ukrainian software development market caused by the full-scale military invasion that started in February 2022.
Over the past decade, eCommerce has been growing steadily in popularity. As a result, global online sales have increased by nearly 15% in 2021 and are predicted to resume rising.
According to Statista, online sales will account for 22% of all retail sales globally by 2023, and eCommerce sales are forecasted to reach $6.38 trillion in 2024. The number of eCommerce websites is also growing.
In 2021, eCommerce sites doubled due to the COVID-19 pandemic. According to Builtwith, there are currently over 26 million eCommerce sites across the globe. New eCommerce trends allow companies to lower marketing expenses, better manage suppliers and customers and boost sales engagement. Therefore, businesses require the necessary technology to carry out new sales strategies.
This article aims to help business owners understand various eCommerce aspects and choose a reasonable approach to implementing the digital commerce strategy for their business.
Each country possesses unique factors that determine the size of the business entity. We adhere to the definition of small- and medium-sized enterprises (SMEs) considering factors provided by the EU mono recommendation. Medium-sized businesses have 50 to 250 workers, and the turnover threshold of a medium-sized company can reach €50 million.
About 0.9% of all EU enterprises were classified as medium-sized in 2019, according to the key figures in Europe report from 2022. They provided work to 16.0% of the EU’s non-financial business economy workforce and constituted 17.1 % of its value added.
In 2019, there were 211,000 medium-sized enterprises in the EU’s non-financial business economy, according to Eurostat. Together, these business entities employed 20.9 million people and contributed €1,168 billion in value.
However, medium-sized enterprises’ share of the non-financial business economy differs across EU countries. The highest ratio of medium-sized enterprises is 4.68% in Switzerland, followed by 2.17% in Germany and 2.07% in Luxembourg.
Concerning eCommerce statistics, the average market share of medium-sized enterprises in the EU that received orders online in 2020 was 25%. The leading countries were Ireland (50%), Sweden (47%), and Denmark (45%). On average, the share of midsize enterprises’ turnover on e-commerce constituted 15% of total turnover in 2020.
Ohio State University’s National Center for the Middle Market defines a medium-sized business as a business with revenue between $10 million and $1 billion. According to the centre’s estimation, there were approximately 200,000 midsize US companies in 2018.
Medium-sized businesses are at the heart of the SSA Group focus. They have achieved a stable market position and remain reliable, still not as overregulated as large entities. In addition, medium-sized companies stay open to innovation, research the required resources and invest funds in eCommerce to remain competitive and achieve substantial growth.
SSA Group focuses on medium-sized businesses because they have achieved a stable position in the market and are reliable yet still not overregulated like large enterprises. Medium-sized companies are open to innovation, possess the required resources for experiments and invest funds in eCommerce to remain competitive and achieve strong growth.
The recommendations of this paper address the most common issues and uncertainties faced by medium-sized businesses when developing their eCommerce presence.
One of the primary tasks of building an eCommerce website is choosing between implementing customised (tailor-made) software or using a ready-made, commercial off-the-shelf (COTS) platform adapted aftermarket to a business’s needs.
A tailor-made solution built from scratch is ideally suited to a particular business’s demands and adapted to its existing business processes, and provides almost limitless customisation options.
However, the active software development of a tailor-made solution is time-consuming and can take about 12–18 months. Moreover, building an eCommerce solution that can achieve business goals more efficiently than any existing COTS platform requires solid expertise and experience in the eCommerce domain. So, the final cost of the tailor-made solution, which is directly affected by the time and number of specialists involved in software development as well as their qualifications, will increase with added complexity.
Regular technical updates, continuous performance improvements, as well as updating functionality or integrating something into a tailor-made online store will also require a highly skilled software developer to solve the technical challenge or rewrite a custom-built code.
Developing a store from scratch is usually considered if the available COTS eCommerce platforms cannot fulfil a business’s needs or if you work with highly personalised data. Large enterprises, for example, may choose a tailor-made solution for its ability to be integrated with specific organisational systems and tools in compliance with their strict security and sensitive data storage policies.
Off-the-shelf solutions are ready-made universal products with expanded functionalities for mass commercial use. The primary advantage of COTS platforms is that they can be used almost out of the box following minor configuration and customisation to achieve the business’s needs and integrate the platform into existing organisational systems.
An online store’s initial eCommerce software development with minimum functionality will often take 3–6 months, and the relative cost is usually lower than for custom-made software.
With a large selection of software modules and the opportunity to customize built-in features, some COTS technology providers are able to meet different eCommerce business needs in full. So, it is possible to get almost any feature you require if choosing the vendor and solution setup thoughtfully. Except for that, COTS platforms release new versions regularly, providing websites with new features and supporting new capabilities and integrations.
To sum up, building a tailor-made eCommerce solution from scratch requires substantial time to market and financial resources for the initial software development phase. Considering the forward-moving cloud technology adoption and constantly increasing customisation options, choosing the COTS platform is reasonable for building an e-commerce website for mid-size businesses. Further, we examine the latest offerings To sum up, building a tailor-made eCommerce solution from scratch requires substantial time to market and financial resources for the initial software development phase. Considering the forward-moving cloud technology adoption and constantly increasing customisation options, choosing the COTS platform is reasonable for building e-commerce website for mid-size businesses.
Further, we will examine the latest offerings for this business sector from the leading ecommerce solution providers.
Self-hosted eCommerce solutions are often referred to as “on-premises” or as “on-local hosting”. Such solutions were most popular at the beginning of the 21st century when companies installed and accessed software from their own servers.
Self-hosted solutions are best when your company already has a highly competent and dedicated IT team. In that case, an on-premises eCommerce solution offers complete control without third-party involvement. Self-hosting offers the ability to completely modify the code, creating a website with limitless customisation options.
As eCommerce progresses and competitiveness rises, businesses must become more flexible to meet growing customer demands and expectations. To achieve this perfect match and keep up with the trends in a dynamic market, the top eCommerce software providers strive to enable ‘decoupled’ or ‘headless’ eCommerce architecture:
Decoupled Content Management System (CMS) architecture separates – or decouples – the backend and front-end management of a website into two different systems: one to control content creation and storage and another – to ingest that data and present it to the user through an interface such as a web browser or mobile app. Headless architecture is a subset of decoupled architecture. A decoupled model features a predetermined content publishing environment.
Headless CMS architecture allows companies to cloud-connect to any front-end technology. The adoption of headless architecture and the API approach consequently made it possible to host solutions partially in the cloud.
For example, Magento supports monolith as well as decoupled solution architecture. Having a monolith core in origin also serves as a decoupled system by building APIs on top. The backend is moved to the cloud, while a progressive web application (PWA) is used as a front-end presentation layer that pulls data via the GraphQL Storefront API.
Cloud-hosted eCommerce allows you to outsource the site’s hosting to your eCommerce platform while maintaining some of the control and maintenance responsibilities of an open-source system.
Separating your front and backends with either a headless or decoupled cms implementation enables companies to increase delivery times while iterating faster. And at the end of the day, he who gets his message heard/seen first wins.
Several models and deployment strategies have emerged to meet the specific needs of various business types. Each model provides variable control, flexibility, and management levels for a company’s IT infrastructure. Three main options are currently available for project deployment.
When software applications are bundled with cloud hosting, this arrangement is referred to as Software as a Service (SaaS). In the SaaS model, most services are managed by your service provider, and the amount of configuration or setup at your end is minimal. Due to its administrative simplicity, SaaS may be the best option in cases where integration requirements are met with out-of-the-box solutions and the functionality provided by the SaaS vendor is sufficient.
However, a SaaS vendor might not fully support the implementation of specific requirements. For instance, requirements might exceed the experience-only level enabled by many API-based and headless systems. In that case, the goal would be more quickly reached with a Platform-as-a-Service (PaaS) system, which is one level up from SaaS. PaaS allows customers to deploy their own software into the cloud infrastructure. Additionally, an Infrastructure as a Service (IaaS) model can be used when renting a virtual infrastructure from a provider.
The three models differ in the division of tasks kept by the company or given to the management of the cloud hosting provider. Please see our earlier article for a deeper dive into the differences between PaaS and IaaS.
At SSA Group, we are hands-on with Adobe Commerce (Magento), Shopify Plus, Shopware, and BigCommerce. This paper provides an overview and compares features of enterprise offerings from mentioned providers.
According to Gartner, enterprise cloud spending will exceed $1.3 trillion in 2022, rising to nearly $1.8 trillion in 2025. Clearly, the question of whether cloud solutions will be adopted has been settled, leaving only the question of its extent. Therefore, we have focused our analysis on the cloud solution versions from the top eCommerce software providers, namely their enterprise editions that suit medium-sized businesses best.
This question cannot be answered generally as it depends on the requirements of the specific business case. For actionable analysis, each alternative should be evaluated against the specific business needs, considering your strategic vision of a flexible and scalable system suitable for your business in the long term.
Our comparison does not force-rank solutions or define which is best but analyses the breadth of their capabilities to cover your requirements. The analyses include a relative comparison in the following aspects:
But do not forget – what works for one seller may not work for everyone. If your company offers 10–15 items only, you may probably eliminate the need for supporting a large inventory.
First, we evaluated out-of-the-box opportunities offered by the compared vendors. To do so, we used a relative ranking system to assess their strength in handling business challenges in the most vital eCommerce functional areas, such as inventory, omnichannel sales, marketing, and more.
Additional indicators include the flexibility of adjusting functions for each individual business and the relative ease of store administration.
The figure shows that all platforms cover business needs in the given functional areas, though to varying extents. If one provider offers an advanced toolset in the category, others may be limited to moderate or quite basic capabilities.
The exception is the possibility of Upsells, offered out of the box by Adobe only. Shopware does not have built-in analytical capabilities. Of course, the lack of certain options can be fulfilled with extensions from the app market, but the monthly cost of the eCommerce solution’s ownership will increase with each added module.
With an almost equal set of functions, the given solutions can be divided into two conditional groups by deployment model, making a significant difference. While Adobe and Shopware are PaaS solutions, Shopify and BigCommerce are SaaS. This means that the store owners at Adobe and Shopware have more control because they still have access to the store’s source code and can edit it to develop custom applications.
However, with more control comes more customisation options, but also more responsibility and risks. The business owner must decide whether they have the will and resources to address these risks without losing quality.
In the next step, we compared the number of extensions for each vendor in the respective categories available for purchase in the app market. This comparison is an additional opportunity to expand the functionality of your store without additional software development. The ecosystem’s breadth and depth are now critical factors in the decision-making dynamic.
The greater the provider’s experience in the market, the more specific client requests have been fulfilled and the broader the base of referrals that can be offered to clients as additional functionality for an additional monthly subscription. The more non-standard tasks performed by the vendor in the past, the higher the probability that the released offering meets the specific needs of your business without additional development.
If none of the available ready-made products meets the specific needs of your business, then a brand-new application is needed. The cost of development will then far exceed the cost of even the most expensive subscription.
A vendor’s ability to attract and develop an ecosystem of technology and service provider partners can also add value to the digital commerce platform. As your business evolves, you’ll need to extend your eCommerce experience quickly. You might need some help with a developer or agency partner who knows the technology and your industry.
From a regional perspective, solution providers navigate the landscape with a focused but broad strategy targeting the buyer of their services. Often, vendors do not optimise third-party channels, B2B2C, or omnichannel relationships across all countries in which they operate. Instead, vendors selectively place bets in marketplaces with increased relevance to boost brand equity.
Some features, products, or programs might only be available for specific regions or countries. Currency, language, payment, and shipping methods support coverage may also depend on the vendor’s geographical focus. This focus may also define how easy it would be to find suitable specialists in your region. You should also consider the locations of your hired developers, as software development services in one region may cost less than in other locations.
The greater the ecosystem of partners and developers supporting the platform, the easier it can be to find a proper specialist in a dedicated region, with a more affordable development cost.
The price range for developing a custom storefront design from scratch usually varies from $2,000 to $15,000, depending on the design and the number of unique web pages required. The price will increase based on the complexity of the storefront design and how far it deviates from the standard layout.
Alternatively, you may choose a ready-made design theme and customise it by applying your brand formats, styles, and other brand identities if you have them, achieving one look and feel.
The table shows that the ready-made design theme will cost approximately $300–$500, which will require slight tuning for a unified corporate view. If you are starting your online presence and your business does not yet have a corporate identity, you should also consider the expenses for its creation. Corporate identity development usually includes creating unique UI patterns, principles and rules, constraints, typography, and more for your business.
Migration usually includes the following stages:
When you already have an active online store, but a change in the platform is necessary to meet your business needs, the cost of migrating your store is approximately the same as the cost of developing new solution from scratch.
The added cost of work is usually related to the transfer of custom logic and data from the previous platform to a new one. The reason is that though the platforms have a similar technology stack and a set of main e-shop pages, they have different internal structures, frameworks, business logic, and other factors to match for a smooth migration.
In addition to the monthly fee for using the platform, business owners should consider expenses such as transaction fees for each vendor and costs of required business extensions.
When it comes to disadvantages of a cloud-based eCommerce solution, its high cost is usually named regardless of the provider. Except for that, business owners often think in the old way, relying rather on owning assets instead of consuming them. It often results in odd spendings and value derived from the cloud solution falling far short of expectations.
So, to seize the actual value of the cloud, companies must rethink their approach to spending and continuously maintain a real-time view of their needs to consume the cloud as planned and redirect investments into optimally allocated operational expenditures.
Shopify has a global reach, with most customers in North America, the United Kingdom, Australia, and Canada. Currently, 3934893 live websites appear on Shopify worldwide.
Shopify Plus is a SaaS-based B2C platform predominantly designed for mid-to-large-sized businesses. The general-purpose eCommerce platform facilitates the sale of shippable goods or digital products. The platform offers the same capabilities as Shopify but with access to enhanced features, including unlimited extensibility, integration, and customisation through flexible Shopify APIs and Shopify Plus Partners.
In June 2022, a native B2B suite was released as a part of the Shopify Plus platform. In Gartner’s Magic Quadrant research methodology, businesses fall into four categories: Challengers, Leaders, Visionaries, and Niche Players. In this system, Shopify is classified as a Challenger.
Shopify is the best fit for digital businesses that need a quick, light, and highly usable solution. However, Shopify has significant functional limitations compared to its enterprise peers. Middle- to enterprise-sized companies might use Shopify to test new brands or markets without the commitment, cost, or heavy lift. Nevertheless, Shopify Plus cannot replace the primary commerce solution for these businesses.
The latest version of Shopware’s digital commerce platform, Shopware 6 Commerce Cloud, is based on the PHP Symfony framework. Shopware 6 is commercially licensed for on-premises and commerce cloud deployments as either SaaS or PaaS (the latter launched in 2021). An open-source community version is also available. Shopware is defined as a niche player in the 2022 Gartner Magic Quadrant.
Worldwide, 37465 live websites are built on Shopware. The platform mainly operates in Europe, the Middle East, and Africa (EMEA), focusing on the DACH countries (Germany, Austria, Switzerland) but also expanding in the Asia-Pacific.
To date, most Shopware customers have less than $50 million annual GMV and focus on B2C selling. Only a small percentage of Shopware’s customers are large enterprises with over $250 million in annual GMV.
As a young niche player, Shopware targets smaller or more limited market opportunities yet currently lacks geographical scale. Nevertheless, Shopware provides cost-effective and innovative solutions. The vendor has been performing in the market for only a few years, though it is developing so rapidly in the features list that it is already catching up with competitors that have been on the market for more than 15 years.
In our opinion, Shopware is an excellent eCommerce solution for online merchants focusing on the German or the DACH e-commerce market.
BigCommerce is a leading open SaaS eCommerce platform that empowers merchants of all sizes to build, innovate, and grow online businesses. BigCommerce offers multi-tenant SaaS eCommerce solutions on the Google Cloud platform.
There are 49718 live websites built on BigCommerce worldwide. The top five countries using the BigCommerce platform include the United States, Australia, the United Kingdom, Brazil, and Canada.
BigCommerce has clients in almost every industry, though retailers, providers of business and consumer services, manufacturers, and sellers of high-tech and media companies are its most common customers. Most of its clients have an average annual GMV of less than $50 million, and some achieved sales of over $250 million in annual GMV.
Companies desiring speed to market, especially direct-to-consumer (D2C) companies and mid-size companies requiring B2B and B2C functionality on the same platform should consider the cloud-native BigCommerce Edition.
The Adobe Commerce platform can be deployed on-premises, public clouds, or public clouds with Adobe’s managed services. Cloud versions are available globally on Amazon Web Services (AWS) and Microsoft Azure. Each Adobe Commerce on cloud infrastructure plan provides a Platform as a Service (PaaS) Integration environment for developing, testing, and integrating services. It also has a pre-provisioned infrastructure that includes PHP, MySQL (MariaDB), Redis, RabbitMQ, and supported search engine technologies.
Free Magento Open Source may be a great option if you have trained staff who understand how to code on the platform and manage the Magento environment. Adobe Commerce is an enterprise platform with a modular core and headless capabilities. The Adobe Commerce Cloud is a fully managed cloud-based version of Magento but fully integrated with Adobe tools such as Analytics Cloud, Marketing Cloud, and Advertising Cloud.
To date, 164899 live websites worldwide are built on Magento (Adobe). The top five countries using Adobe eCommerce solutions are the United States, the United Kingdom, the Netherlands, Germany, and Brazil.
Adobe Commerce (Magento) is well-suited for mid-market companies looking for a purpose-built platform to support B2B and B2B2C use cases. The platform offers comprehensive core functionality, incorporating industry-leading reporting and analytics capability and offering an impressive ecosystem of point solution applications.
Magento is undeniably flexible and scalable CMS that can fit almost all medium- and large-sized companies in any industry. However, its long list of features comes at a cost. A skilled developer or designer (or team of developers) is needed to set up, maintain and update your store to unlock its potential.
Now that you already have basic information on alternatives aligning the chosen solution with the available resources and constraints of your current business case is essential.
Eventually, every mid-market business goes through the same stages with eCommerce. Firms outgrow solutions every 3–5 years and must switch platforms or spend significant budgets on extending the existing platform with more customisations, features, performance tuning, and fixes.
To avoid more re-platforming, which is time-consuming and may often lead to missing business opportunities, you should outline a strategic vision for your business growth. Answering appropriate questions, you will be able to consider features required for future success of the eCommerce business, e.g.:
As there are no two similar businesses, your list of factors to check will be fully unique.
Remember that the more complex solution you implement at this stage, the more resources you will need to deploy and support it. Even if you are not going to scale your store by adding new features, it still needs continuous technical support and maintenance, or otherwise will die.
Re-platforming, as well as building an e-commerce business from scratch, is no small undertaking. The solution you choose at this stage will strongly affect your entire business down the road.
Over the past few years, businesses have faced enormous challenges. And now, business owners will have to deal with the ever-faster development of technologies and the aftereffects of global economic issues, such as slower overall spending.
Unstable global trends will make navigating 2023 planning and budgeting difficult, and the continuously increasing competition in the eCommerce solutions market makes the decision-making dynamic for eCommerce technologies today even more complex than ever. At the same time, the main risks in eCommerce are associated exactly with choosing the right solution to invest in.
In such conditions, it is much safer to obtain support from an independent advisor with real experience in eCommerce development and post-launch services.
SSA Group experts dive deep into every business case of our clients, analyse the scope of current business conditions and objectives to translate the, further into strict requirements for the new platform. Our specialists apply individual approach and discover alternative offerings within the client’s budget and the time frame. With diversified experience in the area, extensive market knowledges, and a clear understanding of current challenges and trends in global eCommerce, our professionals lead you to a thoughtful business decision, reducing most risks.
Our team will map identified gaps in your current business infrastructure against suggested solutions to ensure the chosen platform can fulfil them, outlining potential improvements each alternative can bring to your business. With a clear sense of successful eCommerce drivers, the chosen solution will bring significant ROI improvement to your business.
SSA Group is here to answer your questions. To discuss your eCommerce business growth plans with strong industry professionals, book a call without delay.
The article highlights the main changes and trends in the Ukrainian software development market caused by the full-scale military invasion that started in February 2022.
Today, the benefits of outsourcing in the IT industry are undeniable, offering so much more than a simple reduction in software development costs.
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