Risk – What Flavor Do You Like?

August 15, 2018
August 15, 2018 BrentAlpha

We all accept that there is risk, certainly it’s something that those of us in the firearms sector understand as part of the business. Most times it revolves around what we do and sell, and less around how we operate.
Shopify recent policy update has left more than a few businesses in Canada and the US reeling. And for us here at Telos, it didn’t come as a surprise. We have been getting ambiguous answers from Shopify since day one and have recently been advising our clients to move off it ,both in term if risk and in terms of cost savings.

THE ROOT OF THE MATTER

So you need an ecom store. Obviously there are thousands of choices out there for solving that problem. ALL of them involve some risk, but as we have seen recently, there are risks that are very different in practice.

So just what do SaaS (Software as a Service) vendors offer to a business?

TECHNICAL SERVICES – All the geek stuff get offloaded to the provider. SSL, Security patches (or lack thereof), bandwidth, scaling up in peak times, and overall form and function of the website all happen in the background. But it’s not all roses and candy. These folks are not 100% perfect at their jobs. Shopify has regular outages that impact stores of all subscriptions rates, and you PAY for this type of convenience. In addition, many providers are following the Apple model of “we build the base and let others sell apps to add functionality. At first blush that sounds great, until you have to pay %$50 a month for some basic functionality that should really be included i the base version.

BUSINESS OPERATIONS INTEGRATION – Many options to plug into shipping, POS and other brick and mortar system exist, IF you have their hardware and software. There are connections to accounting software (via paid third-party apps) and inventory control and tracking are available, but rudimentary compared to more robust (and more complex) systems like Magento (see below)

FLEXIBILITY – Fantastic integration, but only if their system meets your needs. Often there is not a ton of flexibility when it comes to customization, and when it does, its costs money. There are thousands of templates available to change the look and feel, but again, you must have some basic code knowledge to get them to work with your changes, or you have to hire a code geek to really make it perfect.

RISK – You are, as we have seen recently, at the whim of the corporation and its policy. You have no real contract, and even a the Shopify Plus level where you negotiate your platform fee, you never see a contract that outlines what rights you have and how you are protected. ProTip – You aren’t protected, the vendor is and you are risking your livelihood on its policy.

So what is the alternative?

Self hosted options range from shared server space on GoDaddy, to dedicated servers hosted in data centers in Canada, running licensed software where you have a contract and will not be bullied around.What does this look like?

TECHNICAL SERVICES – You need the proverbial “Guy”. A third-party company, and local geek you know and trust, or combination of the two ,you need someone who can set up a server and install software, patch it, understand backups, restores, versioning and be able to respond in a reasonable amount od time when something blows up. And it will.

BUSINESS OPERATIONS INTEGRATION –  Often these self hosted systems can have complex and very robust inventory systems, as well as POS integration and third-party credit card processing options. Once it’s all plugged in and working ,you are good to go with little to no monthly payments for the functionality

FLEXIBILITY –  Where you would pat monthly for an app to give some extended functionality over the base system in SaaS, in a self hosted system (Magento, WooCommerce ,PrestaShop etc) you buy the module once and get 1-2 years of support, new version upgrades (often automatic, particularly in WordPress based systems) for free, and very little in the way of issues. Major base system upgrades however might require paying to get to the latest supported version, but overall the cost is equal or less that SaaS apps.

RISK – The risk shift from strategic to technical. You are 100% in control of your software and systems. Assuming you have hired the right “guy” or company (shameless plug) you are in control of if, when and why you upgrade. No policy changes can impact you, and you service cannot be shut for anything less than non-payment in most cases. But if the site goes down, or if there is a security breach, it’s on you.

 

So why don’t more businesses choose to go self hosted? Because its technical, and scary, and it’s easier to roll the dice with SaaS.

Until they won’t take you money anymore.

BrentAlpha

Brent is a long time IT guru, ex-Army Reserve (no tours) gun loving fool who parleyed his IT and firearms addictions into a filmmaking and marketing career. He has been in the firearms/tactical sector in Canada and the US in various roles for 12 years. Currently he is CEO at Telos Alpha, CIO at Valkyrie Combat, and volunteers his time and skills at Many To One PTSD Support Foundation and the Special Operations Charity Network.

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