Magento 2 vs Magento 1 – Is the Upgrade Worth It?

Magento 2.0 was released in November 2015, after four years of development, aiming to replace the 1.x version of the eCommerce platform. A new version of the platform was released simultaneously for the Enterprise and the Community Edition, thus introducing new features and functionality within the paid and the free eCommerce solution provided by Magento.

Since Magento Community Edition (Magento CE) is free to download, it is up to you to decide whether to upgrade to the latest 2.x version and how. Those holding licenses for Magento Enterprise Edition 1.x (Magento EE) can extend their licenses for the current version of the software but must upgrade to Magento 2 before December 2018.

Hence, like it or not, merchants using Magento 1 will be forced to upgrade to Magento 2 or migrate to another eCommerce platform by the end of 2018. By that date, the 1.x versions of the community edition will be so archaic that they will require a virtually mandatory upgrade as well.

Is the upgrade worth it? It depends on many factors such as the technical requirements to implement the new version and the total cost of ownership. Furthermore, you should check whether you could take complete advantage of the new key features, which you are paying for.


System Requirements

Let’s take a look at the system requirements. Magento 1 is running on Linux x86 and x86-64 while Magento 2 can be deployed only on the newer Linux x86-64. It is hard to tell whether this is a bad or a good news in the short-run and it all depends on your existing server environment or the software infrastructure of your hosting provider.

If your organization or hosting provider does not plan to switch completely to Linux x86-64 in the near feature, then you may consider staying with Magento 1.

Both versions require Apache or Nginx web server, with Magento 2 supporting the most recent version of the software. Magento 1 needs PHP 5.4 or 5.5 to run while Magento 2 can take advantage of the new features provided by the PHP 7.0.2 version.

A notable improvement in Magento 2 is the integration of new technologies like HTML 5, CSS 3, support for PHP 7 and Apache 2.2. That said, Magento 2 naturally integrates the latest frameworks, which, in theory, should boost speed and provide better customer experience through improved technology.

Magento 1 requires MySQL 5.6 (Oracle or Percona) database while the new versions support MySQL 5.6.x. Magento 2.0 and 2.1 are able to use three master databases, providing scalability of key areas such as order management, product management, and checkout, which in turn results in better performance.

This is a notable improvement towards better scalability but is not a factor you should consider if you already run a stable software environment and do not plan aggressive expansion in the near future.


Key New Features

Magento 2 offers major improvements in the administrative user interface, which now allows merchants to access their online stores using responsive navigation through devices based on touch technology. Import and export of products were improved to support cross-sales and upselling.

A step-by-step product creation tools enable faster creation of configurable products bypassing the manual creation of a simple product required in the earlier Magento versions. Drag-and-drop administrative tools are another notable improvement, especially compared to the quite unintuitive UI of the older versions.

Another key improvement is the checkout process that now requires only 2 steps, compared to the 5-step process in the older version. The overall experience was also improved through one-click account creation and auto-recognition of registered clients.

A 5-step checkout in the older version is definitely something you should be worrying about since most eCommerce platforms already provide functionality for 2-step or 3-step checkout. The majority of marketing experts are of opinion that 2-step checkout and guest checkout markedly improve conversion rates.

The new Magento edition supports full page caching through the Varnish web accelerator, providing faster page loading time. It also provides new built-in responsive themes for faster store creation.

Well, page and site caching are offered also at the level of your hosting but faster website loading matters nowadays. One should also welcome a new functionality for better compression of images and faster loading of JavaScript in content-rich stores. This will result in better performance of Magento 2-based merchants.

Magento 2 also provides support for Composer, a PHP dependency manager, to manage dependencies when developing extensions or tweaking the code base. This new feature should help your developers in the implementation of flawless customizations to your store, which is a good thing.

Although not exactly a feature, the Magento commitment to quarterly updates of the platform should be considered a major improvement. Furthermore, Magento Connect was reorganized into Magento Marketplace where all extensions to the eCommerce platform are assessed by the team of Magento.

It is not a money back guarantee but introduces a new level of reliability for both free and paid third-party extensions.


Cost

After the launch of Magento 2, no new licenses are offered for Magento EE 1.x versions. The cost of the license for Magento 1 platform was USD 18,000 a year and the pricing model was based on a per-server basis. Current holders of 1.x licenses can extend them up to December 2018.

A new revenue model was introduced with the enterprise version of Magento 2.x. It is unclear whether the decision to change the pricing model was taken before or after Magento Commerce split from eBay in November 2015; nonetheless, it follows the pricing model and structure of other market players such as Shopify, BigCommerce, PrestaShop, and Volsuion.

Magento 2 is taking into account the use of modern server load balancing methods and is therefore based on a revenue sharing model.

Thus, the starting package for Magento 2 EE is set at USD 22,000 per year for a store that makes up to USD 1 million in annual sales. The company also charges a minimum of 2.2% on every sale made.

Merchants earning USD 1 million to USD 5 million in annual sales should pay USD 32,000 a year for the Magento 2 license and will be charged between 3.2% and 0.64% on a transaction. Those grossing between USD 5 million and USD 10 million a year are charged 0.98% to 0.49% on top of annual license worth USD 49,000.

Stores making sales worth USD 10 million to USD 25 million a year can purchase an annual license for USD 75,000 and will be charged 0.75% to 0.3% on every sale completed. The cost of each license includes 24/7 support by Magento.

All versions of the community edition are free for download, including the 2.x releases of the platform. The company has no plans to discontinue Magento CE in the near future.


Migration to Magento 2.x

Data migration tool is available for Magento CE and Magento EE and, reportedly, the transfer of stored data is working seamlessly in both the editions of the platform.

Magento 2 does not allow for direct migration of Magento 1.x themes, both within the community and the enterprise edition. Nonetheless, Magento license holders can take advantage of new built-in themes while Magento provides extended support for theme migration.

Most Magento 1 extensions are not compatible with Magento 2 but upgraded versions are available for purchase or download via the Magento Marketplace. This applies to both Magento CE and Magento EE. There is a good chance the extensions updated to run on Magento 2 will be more stable and reliable after the introduction of Magento Marketplace with its stricter supervision.

Most custom code implemented in Magento 1 can be migrated into Magento 2 but some custom-made extensions might require significant re-coding to run on Magento 2. This could be a pain if you have invested heavily in custom development under Magento 1 but should upgrade to Magento 2.


Conclusion

Most IT consultants agree that if you are running a Magento version 1.8 of or later, you can safely stick to your current solution for the foreseeable future. Especially, if you did not plan to upgrade to a later version due to technicalities or because a particular feature is missing in your current version.

Provided that you hold a license for a relatively recent version of Magento 1, you can afford to wait and see whether the new Magento pricing model will be successful enough to last or the company will be forced to lower the prices of its paid products.

Plus, you could explore the options offered by Magento Enterprise Cloud Edition, which is a platform-as-a-service (PaaS) solution. Some industry analysts expect the cloud solution to be priced north of Magento EE but a working pricing model is yet to be established and tested.

In theory, the upgrade to Magento 2 is worthwhile bearing in mind the enhanced shopping, customer experience, and customer retention features incorporated into the platform. Improved ease-of-use and faster page load are other factors to consider.

Both the community and the enterprise editions are worth upgrading in the light of fierce competition between the eCommerce platforms where new features and greater speed can be decisive success factors for an online store.

Some Magento competitors are gaining momentum. Therefore, Magento could be forced to downgrade their pricing, especially within the framework of an increasingly competitive market.

Pros Cons
System Requirements Supports The Latest Software Additional Software Upgrades Required
Features
  • Better UI
  • Faster Loading
  • 2-step Checkout
  • Quarterly Updates
None
Cost
  • Mandatory upgrade to Magento 2 EE by end of 2018
  • No plans to discontinue Magento CE
  • Lower license cost
  • Extended licenses for Magento EE 1.x versions available
Migration
  • Seamless data migration
  • Relatively painless theme migration
  • The custom code might require major tweaks
  • Extensions should be upgraded
  • Custom extensions might require re-work
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Author:
VT Netzwelt is an internationally-recognized brand for the development of sophisticated web and mobile applications who is working for premium segment clients worldwide. Our team possesses valuable technical certifications in Project Management, Magento, and Quality Assurance.

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