What is Magento? Explanation of the e-commerce platform
Magento is an open-source e-commerce platform that allows you to build and manage professional webshops. It's one of the most used webshop systems in the world, especially popular with medium to large online retailers.
Unlike simple webshop builders like Shopify or WooCommerce, Magento is built for complex e-commerce operations. Think of webshops with thousands of products, multiple websites, B2B functionality, or international sales with different currencies and languages.
The history of Magento
Magento was launched in 2008 by the American company Varien. The first version (Magento 1) quickly became popular because it combined powerful functionality with open-source freedom. Developers could modify the code and extend it with custom modules.
In 2011, Magento was acquired by eBay, which wanted to use the platform for their own e-commerce services. This period brought growth but also uncertainty in the community.
In 2015, eBay sold Magento to private equity firm Permira. Shortly after, Magento 2 was launched - a complete rewrite of the platform with modern technology and better performance.
The last major change came in 2018: Adobe bought Magento for $1.68 billion. Adobe integrated Magento into their Experience Cloud and renamed the enterprise version to Adobe Commerce. The open-source version remained available as Magento Open Source.
Magento Open Source vs Adobe Commerce
Magento exists in two main variants:
Magento Open Source (formerly Community Edition)
This is the free, open-source version that anyone can download and use. You pay nothing for the software itself, only for hosting, development and any paid extensions.
Features:
- Complete webshop functionality
- Unlimited number of products and categories
- Multi-store support (multiple webshops from one installation)
- Extensions marketplace with 1000+ add-ons
- REST and GraphQL APIs for integrations
- Responsive design out-of-the-box
Adobe Commerce (formerly Enterprise Edition)
The paid enterprise version with extra features and official support from Adobe. Prices start around €22,000 per year and go up to €125,000+ depending on your revenue.
Extra features on top of Open Source:
- B2B functionality (customer segments, quick ordering, quotes)
- Page Builder for visual content management
- Live Search with AI-powered search results
- Product Recommendations based on behavior
- Customer segmentation and targeting
- Cloud hosting option (Adobe Commerce Cloud)
- Official support and SLAs
- Advanced security features
For most businesses, Magento Open Source is sufficient. Adobe Commerce becomes interesting from €5-10 million revenue per year, or if you need specific B2B functionality.
More details? Check our article on Magento Open Source vs Adobe Commerce comparison.
How does Magento work?
Magento is a PHP application that runs on a web server. It uses a MySQL or MariaDB database to store products, orders and customer data.
Technical architecture:
The core consists of different layers:
- Presentation layer: frontend templates and admin interface
- Service layer: business logic and services
- Domain layer: database models and resources
- Persistence layer: database communication
Magento works with a modular system. Everything is built from modules - even the core functionality. This makes it extremely extensible but also complex.
Important concepts:
- Stores: you can run multiple webshops from one Magento installation, each with their own products, design and customers
- Themes: determine the appearance of your webshop
- Extensions: add functionality (payment methods, shipping methods, marketing tools)
- Attributes: product properties like color, size, material
- Catalog: hierarchical structure of categories and products
Magento also uses advanced technologies:
- Elasticsearch: for fast product search functionality
- Redis: for caching and session storage
- Varnish: for full page caching
- RabbitMQ: for message queues (optional)
Who is Magento suitable for?
Magento is not for everyone. The platform has strengths but also challenges.
Magento fits you if:
- You want to build a medium to large webshop (100+ products)
- You sell complex products with many variations and options
- You need B2B functionality (wholesale, quotes, customer groups)
- You want to manage multiple webshops from one system
- You sell internationally with multiple languages/currencies
- You need specific integrations with ERP, PIM or other systems
- You have budget for development and good hosting (minimum €1000-2000 startup costs + €50-100/month hosting)
Choose something other than Magento if:
- You want a simple webshop without technical knowledge (use Shopify or Lightspeed)
- Your budget is limited (<€1000 total)
- You only want a WordPress site with small webshop (use WooCommerce)
- You want to go live quickly without development (Magento requires customization)
- You don't have technical support or developer available
Advantages of Magento
1. Enormously scalable Magento runs webshops from 10 to 10 million products. You can start small and grow to enterprise level without switching platforms.
2. Flexible and customizable Because the source code is open, you can literally change everything. No limitations of closed-source platforms.
3. Rich functionality Out-of-the-box you already get advanced features like wishlists, product compare, advanced pricing rules, coupons, customer segments.
4. Large community Thousands of developers worldwide work with Magento. Lots of extensions, documentation and knowledge sharing available.
5. Multi-store support Run multiple webshops (different brands, countries, languages) from one backend. Share inventory and customer data where needed.
6. B2B functionality Especially Adobe Commerce has extensive B2B tools, but Open Source also offers customer groups, tier pricing and custom quotes via extensions.
7. SEO friendly Good URL structure, meta tags, XML sitemaps, and canonical tags out-of-the-box.
8. APIs for integrations Modern REST and GraphQL APIs make connections with external systems easy.
Disadvantages of Magento
1. Complexity Magento has a steep learning curve. You need development knowledge or must hire an agency.
2. Costs Although the software is free (Open Source), you pay for:
- Hosting: €50-500/month (see our Magento hosting comparison)
- Development: €50-150 per hour
- Extensions: €0-500+ per piece
- Maintenance: security patches, updates
3. Performance challenges Magento is resource-intensive. You need good hosting with at least 4GB RAM, Elasticsearch, Redis cache. Shared hosting doesn't work.
4. Slow development Simple changes can be hours of work due to the complex architecture. Installing updates requires technical knowledge.
5. Limited out-of-the-box templates The standard Luma theme is functional but not spectacular. You often want a custom theme, which means design/development costs.
Installing and hosting Magento
To run Magento you need specific hosting. Check the complete technical requirements for Magento hosting, but here are the basics:
Minimum server requirements:
- PHP 8.1 or 8.2
- MySQL 8.0 or MariaDB 10.4+
- Elasticsearch 7.x or 8.x
- Redis for cache and sessions
- 4GB RAM minimum (8GB+ recommended)
- SSD storage
- Composer dependency manager
Hosting options:
-
Managed Magento hosting (€50-200/month)
- Hypernode, Savvii, Antagonist
- Pre-configured stack
- Automatic updates and backups
- Dutch support
-
Configure VPS yourself (€15-50/month)
- TransIP, Digital Ocean, Linode
- Full control
- Requires technical knowledge
-
Cloud platforms (€150-500+/month)
- AWS, Google Cloud, Azure
- Unlimited scalability
- Complex to set up
For most Magento shops we recommend managed hosting like Hypernode. This saves a lot of headaches with server configuration and performance tuning.
Check our complete guide: Compare best Magento hosting providers.
Practical tips for starters
1. Start with a demo Try Magento first in a development environment. Adobe offers free demos on their site.
2. Hire a Magento developer Unless you're a PHP developer yourself, work with a specialized agency. Magento is too complex for DIY without experience.
3. Plan your budget realistically Count on at least €3000-5000 for a basic Magento shop (design, setup, basic extensions). More complex projects cost €10,000-50,000+.
4. Choose the right extensions Use reliable extensions from known developers. Check reviews, update frequency and support before buying.
5. Invest in good hosting Magento on bad hosting is a disaster. Start with at least Hypernode Start (€49/month) or comparable managed platform.
6. Keep Magento up-to-date Security patches are critical. Plan time monthly for updates, or have this done by your developer.
7. Use staging environment Test updates and changes first on a staging server before going to production.
8. Monitor performance Use tools like New Relic or Blackfire to find and fix bottlenecks.
9. Learn the basics Even if you outsource, understand the basics of how Magento works. This helps with communication with developers.
10. Join the community Visit Magento Meet Magento events, follow blogs like Mageworx and Amasty, and join forums for tips and help.
Is Magento the right choice?
Magento is an excellent platform for serious e-commerce operations, but requires investment in time, money and expertise. It's overkill for small hobby webshops, but perfect for growing businesses that need scalability and flexibility.
Compare Magento with alternatives:
- WooCommerce: simpler, cheaper, but less scalable
- Shopify: plug-and-play, but limited customization options
- PrestaShop: comparable to Magento but smaller community
- BigCommerce: SaaS like Shopify but with more enterprise features
For most Dutch webshops between €100k and €5 million revenue, Magento Open Source is a solid choice. Above that, Adobe Commerce becomes interesting.
Want to get started with Magento? First check what hosting you need and read the technical requirements.