Published: May 23, 2014 Last updated: Dec 15, 2021 Yan Kulakov

The world is shaped by money. However, apart from money the indispensable part of our lives has become technologies and modern devices. Money and technology are developing alongside influencing and promoting each other towards bigger goals.

As technology develops marketplace platforms are getting more and more sophisticated. Today there are two main types of development platforms: cloud marketplace platforms and self-hosted ones.

In this article we will take a look at the differences between these two types of platforms, benefits and disadvantages and their prices. It is a deep comparative exploration of development platforms. There is also information about low-code technology as most platforms are based on it and some statistics.


What are the differences between self hosted and cloud marketplace platforms?

Both of these platforms are business solutions. They allow for launching and managing a marketplace based on these platforms. There is a principle difference between them.

Self hosted marketplace implies that you download an application and set it up. You have complete control over it and all settings depend on your decision. It looks the same with computer applications.

Cloud marketplace, SaaS marketplace, hosted marketplace all these names mean the same. It is a marketplace platform which is hosted by a provider. All the features are arranged by them. It is an online service and you can get access to it via browser.

This difference leads to a range of more valuable differences between these types. Let’s start with the peculiarities of both of them.


IaaS, PaaS, SaaS: what are the differences?

When looking through cloud technology, you can find these frightening abbreviations: IaaS, PaaS, and SaaS.

What do they mean?

The primary difference is in the responsibility between a user and provider. The area of provider’s responsibility progressively expands from IaaS to SaaS.

  • IaaS—infrastructure-as-a-service—this method has the most possibilities for user’s intrusion of these three options. It is closer to the self-hosted type but still some things are provided. The user can pay for required features gradually. For example, Amazon web services and Rackspace cloud.
  • PaaS—platform-as-a-service is an interim option. Provider hosts hardware and software. It is an integrated solution for a business. For example, Windows Azure and Google App engine.
  • SaaS—software-as-a-service—It fully works via browser and is usually required to sign in. All updates, bugs and services are provided. For example, Dropbox and Google Apps.

The explanation is not enough to understand these systems. So, there is a scheme of how it works.


What are the features of self-hosted and cloud marketplaces?

These features are not pros and cons. They are lists of distinctive qualities. Each platform is good for certain purposes.

Self hosted platforms

  • Should be downloaded and installed on the server
  • You have access to code
  • You need a team to maintain its work
  • Usually one-time payment

Cloud platforms

  • Do not have to be installed since it works in cloud
  • Have a number of standardized features with no access to code
  • Platform provider takes all services
  • Always subscription-based payment

As these platforms are unequal they are used in different business models.


Who are these types of platforms for?

Mostly small businesses, individuals, and startups prefer cloud marketplaces. Their priorities are price and simplicity. Despite the fact that such platforms have a limited range of facilities it may be enough to start a marketplace. Security of the data of its users, updates and all development issues are provided. It is a double-edged sword. On the one hand it is useful; on the other hand, you cannot influence these changes: a function that is important to your business but rarely used by others may be abolished as well as you cannot add a feature that is not displayed in a standardized catalog.

Big companies and enterprises are inclined to choose self hosted ones. Their prerogative is to control all the features, possibilities of customization and adjusting security. They usually have a developer team that is responsible for updates and can customize a marketplace. They also want to be sure that their clients’ data is well stored and they can give a guarantee that third parties do not have access to it. In comparison with cloud marketplaces, this type does not limit business and suits greatly for expansion and development.


What is the price for each type of a platform?

Pricing is an interesting question here. It radically differentiates but has some tricky consequences that you should take into account.

About 60$ per month for cloud marketplace VS about 3,000$ as a one-time payment for self hosted one.

At the first glance it may seem that self hosted platforms are very expensive but in three or four years a self hosted platform will be generously repaid. Remember all the possibilities that open up with self hosted platforms. Big players will definitely need more features than presented in cloud marketplaces. Furthermore, if you start from a cloud marketplace and then to expand possibilities you decide to switch to a self hosted one, it might become an arduous and costly process. So, in a long term perspective self hosted platforms are cheaper.


How difficult is it to manage these platforms?

When talking about cloud platforms we mention simplicity. It seems that self hosted platforms are difficult to start and manage. But what is considered as difficult? Nowadays everything strives for simplicity; marketplace technology is not an exception.

Both types are usually created as low-code platforms.

You do not have to be a programmer to adjust settings or design your marketplace. In this case, difficulty is about complexity and number of features. CS-Cart Multi-Vendor is a low-code self hosted platform. You can add required settings, their position and provide all other site editing via interface. If you need more features there are a large number of addons that are constantly updated. Yet, if extremely specific settings are required, there is free access to code and any developer can contribute to it. The CS-Cart Multi-Vendor platform is a combination of no-code technology with the possibility for code based development. It does not limit your business.

What are other features of the platform:

  1. The price starts from 1,450$
  2. More than 2,000 addons
  3. 26 languages are available
  4. Responsive design is included
  5. Possibility to create an application for Android and IOS
  6. Unlimited number of products and vendors

You can try a free demo versionof the CS-Cart Multi-Vendor.


What are low-code platforms?

Low-code technology has similar terms: no-code or zero code technology. The reason why this concept has appeared is automation of processes. Each website has a number of standardized blocks and sections. Low-code technology allows to form a website on the principle of a children's constructor. This tool considerably decreases the time for the development and raises the speed and efficiency of website building.

What are the pros of low-code platforms:

  • Low price —they are usually cheaper than code-based ones.
  • Simplicity—they are user-friendly platforms that do not require special knowledge on how to manage them. A provider is responsible for most services and it makes this option appealing.
  • Speed—as they can be managed intuitively and do not require a team of developers to maintain, they allow businessmen to launch a marketplace easily.

What are the cons of low code platforms:

  • Limitations—only certain features are available and they cannot be changed or improved.
  • Risks related to provider services—security issues or suspension and even interruption of services of provider. It is usually a full dependence on a provider.
  • Additional payments—Many features are not included in the basic price and people should pay for them additionally.

Low-code platforms are an impressive tool and they often take place in cloud marketplaces.


How to choose a platform for your business?

A choice of a platform and its type is a significant step in business. Whatever platform you might choose, you should remember about three main points:

  1. Your final goal—the choice of a platform depends on the desirable result. Cloud platforms are fine for MVP* testing and start-ups. Cross-reference your aims and platform’s opportunities. Defining a plan may help you to choose a relevant platform. A platform should not limit you.
  2. Esteem prices in advance—with the clear plans count which type of platform is better for you. Pay attention to what is included and which features require the additional costs.
  3. Different support sources—platforms should have a wide and coherent information on how to use it. Information can be presented in different ways: as video, written documentation or technical support. It is better when a company has all these sources. The popularity is a significant point, too. With a big and supportive community you could solve all your problems.

*MVP—minimum viable product is a business without complex features. It is a prototype of a business that can provide the main functionality such as the sell and buy process.


Prediction for the future of marketplaces

There are some interesting facts about cloud marketplaces and forecasts for the future of eCommerce.

Do you expect to spend more or less on goods from online marketplaces, such as Amazon and Walmart, because of the coronavirus? Source

The graphs show the number of people and how they think the situation would change. 2.200 people aged 18 years and older took part in the survey. 37% of the respondents believe that their spendings for online shopping will increase. It was the expectations of consumers for 2020 year. Let’s see the real situation on the global market.

Average value of global online shopping orders in 2nd quarter 2020 and 2nd quarter 2021, by traffic source. Source

This is a comparative graph of online shopping in the 2nd quarters of 2020 and 2021 relatively. It is divided according to traffic source the All figures increased that may signal growing interest in online shopping. The main leaps have happened in direct navigation and search. In both cases the average value has increased by about 30%. The total increase is measured by 18% growth.


Summary

Cloud marketplaces have become a game-changer in the eCommerce industry. They allow it to launch fast and manage easily. Yet, they do not provide all the opportunities that are possible on self hosted platforms. For some businesses they may become a nice alternative but for others may turn into limitations and spendings. The future of marketplaces and cloud marketplaces in particular looks clear and prospective.

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