How to Lower the Cost of Your Ecommerce Tech Stack

 

You might be wondering:

 

Why are enterprise software costs rising?

 

Over the past few years, enterprise software license costs have been increasing significantly. Back in 2022, Gartner predicted that 20 major software vendors would phase out perpetual licensing, leading to higher costs. 

 

When customers transition to subscription-based models, the annual cost often equals about one-third of a perpetual license cost but exceeds the yearly maintenance fees.

 

The result? Ongoing annual costs continue to rise.

 

In 2024, other software vendors followed suit with price increases—Salesforce being a notable example. (See Report)

 

This trend isn’t limited to Salesforce; it’s happening across the board with enterprise software. Adding to the challenge is the uncertainty of running costs, which are not always tied directly to how much you use the software.

 

So how can businesses financially plan for these costs, and is it possible to reduce them? 

 

Let’s explore strategies to help lower your overall ecommerce tech stack expenditure.

 

 

 

 

5 Options to Lower Your Enterprise Software Costs

 

From our experience working with clients, we’ve identified several effective strategies to help reduce enterprise software costs. Here are the key approaches:

 

1. Software Consolidation
2. Open-Source Software
3. Negotiating Current Fees
4. Cloud-Based Solutions
5. Training, Support, and Community

Let’s break these down…

 

1. Software Consolidation

 

In simple terms: 

 

Stop buying new software without assessing your current stack!

 

Studies show that most companies use only a fraction of the software they pay for. Start with these steps:

 

➡️ Inventory: Take stock of all the software you currently use.

 

➡️ Contracts: Review your contracts and note renewal dates to avoid unwanted auto-renewals.

 

➡️ Features: Understand what each software does and map out overlaps in functionality.

 

➡️ Business Needs: Identify what your business truly needs now and in the near future.

 

Often, you’ll find software with overlapping features or tools that are no longer in use. While smaller SaaS tools can add up quickly, larger enterprise software systems often have built-in functionality that you might not be fully utilizing. 

 

Instead of purchasing new software, consider leveraging existing tools or building small custom features.

 

💡 Key Takeaway: Consolidating your tech stack helps reduce your software expense while still supporting new business initiatives.

2. Open-Source Software

 

Open-source solutions are becoming increasingly accepted in commercial businesses, with the exception of some industries like finance or government institutions. 

 

For ecommerce, platforms like Medusa are gaining popularity due to their flexibility and cost-effectiveness. Professional hosting options are also available, making open-source a viable alternative for reducing licensing fees.

 

Benefits of Open-Source Software:

 

• Lower licensing costs.

• Flexibility to customize based on your business needs.

• Access to a growing community of developers and support resources.

 

Considerations: Open-source solutions must align with your development skills, resource availability, and security requirements.

 

 

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3. Negotiating Your Current Fees

 

Never underestimate the power of negotiation.

 

➡️ Prepare: Research alternatives and understand your current usage patterns.

 

➡️ Leverage Options: Use insights from your inventory to identify redundant tools or negotiate for better pricing.

 

Well-prepared negotiations can lead to significant cost savings without compromising your operations.

 

 

4. Cloud-Based Solutions

 

While cloud-based solutions are often seen as cost-saving, they require careful configuration to realize their full potential. 

 

The main benefit of cloud systems is scalability, allowing you to adjust your resources to meet demand.

 

Example:

 

• Scale down during weekends or holidays when systems are not in use.

• Turn off unused services to save costs.

 

Proper monitoring and configuration can turn cloud systems into a cost-effective solution for businesses of all sizes.

 

 

5. Training, Support, and Community

 

Investing in user training can yield substantial returns by improving productivity and ensuring optimal use of your current ecommerce tech stack. 

 

Often, businesses underutilize features available in their software due to a lack of awareness or expertise.

 

Benefits of Training:

 

• Increased efficiency.

• Reduced reliance on additional tools.

• Enhanced employee satisfaction through skill development.

 

 

Building a Cost-Effective Ecommerce Tech Stack

 

Composable Architecture can lower your tech stack costs, but only if approached strategically.

 

Key Considerations for a Composable Tech Stack:

 

➡️ Prioritize Needs: Avoid the temptation to choose the best-of-the-best for every component. Instead, select tools that solve your immediate and near-future requirements.

 

➡️ Manage Contracts: Track the lock-in periods of each component to avoid paying for unused tools when switching.

 

➡️ Stay Flexible: A composable tech stack should evolve with your business, allowing you to replace components as needs change.

 

⚠️ Important: Without careful contract management, even a composable approach can lead to higher total costs than a monolithic system.

 

 

Conclusion

 

The shift from perpetual to subscription-based licensing models has driven up software costs, but businesses can take proactive steps to manage and reduce these expenses:

 

• Consolidate Software: Maximize existing tools and avoid redundant purchases.

• Adopt Open-Source Solutions: Explore cost-effective alternatives like Medusa.

• Negotiate Fees: Regularly review and renegotiate contracts.

• Optimize Cloud Usage: Scale resources to match demand and save costs.

• Invest in Training: Empower teams to use tools efficiently and reduce reliance on additional software.

 

By planning strategically and managing contracts effectively, you can create an agile, cost-efficient tech stack that supports your business goals.

 

Ready to optimize your enterprise ecommerce tech stack? Contact us today to start saving.