The Ecommerce Platform Exodus: How Shopware is Seizing Adobe’s Lost Midmarket

The midmarket merchant segment, defined as e-commerce businesses generating between $10 million and $250 million in gross merchandise value (GMV), has experienced rapid expansion in recent years. However, this segment faces an exodus from the traditional ecommerce platforms that have historically served them. Industry leader Adobe, which acquired Magento in 2018, has notably redirected focus away from midmarket merchants, creating a gap that innovative platforms are primed to fill. This article will analyze the importance of the midmarket segment, Adobe’s strategic missteps, and how open-source solutions Shopware and Magento (irony noted) present superior alternatives for merchants seeking flexibility, affordability, and growth.

*NOTE - Why am I including Magento in this article?

Magento offers both a free, open source version of its platform as well as paid licensed version (Adobe Commerce). The open source version provides robust core ecommerce functionality suitable for many midmarket merchants' needs. However, the licensed Adobe Commerce version offers additional advanced capabilities like B2B features and predictive intelligence using Adobe Sensei. While open-source presents a compelling no-cost option, scaling beyond a certain level of complexity often requires upgrading to paid modules or the full Adobe Commerce license. It's important to understand Magento Open Source still relies on external partners for implementation, customization, hosting, and support. The total cost of ownership can exceed licensing fees when factoring in these additional services required to run Magento successfully. So merchants should carefully weigh the pros and cons of the free vs licensed editions based on their growth plans and budget.

I also include the free version because ecosystem has come up with solutions that Adobe failed to do or see e.g. Hyvä - This shows how strong the community is and how the community continues to support and move Magento forward.

The Untapped Potential of Midmarket Merchants

E-commerce is projected to reach over $1 trillion in US retail sales by 2025, representing nearly 20% of the total retail market, as reported by Forbes. Midmarket merchants are expected to play an integral role in this growth, generating over $250 billion in online sales. This signifies the increasing influence of digital commerce in the overall retail sector.

You can read more about this on Forbes.

However, this segment faces distinct challenges in running complex “enterprise-like” operations on razor-thin margins. The balancing act between allocating budgets towards technology spend, marketing, and product development often results in significant tension. However, the mid-market merchant segment is anticipated to play a crucial role in the evolving economic landscape, with expectations for substantial growth. This segment's agility and responsiveness to market changes position it well for rapid expansion, potentially outpacing the growth rates of small and medium-sized businesses (SMBs).

For a broad understanding of the growth opportunities and challenges facing businesses, including those in the mid-market segment, insights from Boston Consulting Group's (BCG) report on the e-commerce market in Saudi Arabia, which highlights rapid growth in certain segments. You can explore more about this topic here.

Midmarket merchants must optimize limited resources to manage rising costs, meet customer experience expectations, contend with channel complexity, and leverage data. As such, the midmarket has distinct technology needs that have been increasingly unmet by platforms like Adobe, driving merchants to explore alternatives. Industry expert Mark Friedman of RMW Commerce states, “Every dollar spent on technology is a dollar not spent elsewhere, and CEOs are acutely aware of this opportunity cost.”

Adobe Drops the Ball on a Critical Market

Adobe’s 2018 near two billion-dollar acquisition of Magento marked a pivotal point for the platform and midmarket merchants. Adobes goal was to create an end-to-end suite spanning commerce, sales, marketing, and analytics, competing directly with Salesforce. However, in doing so, it shifted strategic focus towards enterprise-level clients.

Despite acquiring Magento, the leading ecommerce platform, Adobe has redirected focus away from the midmarket merchants crucial to Magento's market dominance. Under Adobe, Magento innovation has slowed with moves like sunsetting its open-source version. This neglect has prompted tightly-budgeted midmarket brands to finally explore alternatives to Adobe's costly licensing. Ironically, Magento Open Source itself presents a compelling option, especially when combined with modern front-end solutions like Hyvä that augment Magento’s core capabilities.

Magento Open Source: Flexible and Budget-Friendly

Magento’s open-source software, which Adobe has backed away from, presents an intriguing option for midmarket merchants. The platform remains highly flexible and extensible through its global community of developers. Midmarket brands can leverage Magento’s robust core e-commerce functionality without a large upfront investment. It's free, and let's face it, it is the core of Adobe Commerce.

While Adobe has reduced funding for open-source innovation, the Magento community continues advancing the platform’s capabilities. Solutions like the Hyvä theme enable merchants to improve site performance and customer experiences. Integrations with modern headless commerce frameworks and microservices are also expanding, providing future-proof architecture. Magento Open Source offers midmarket brands the perfect balance of proven technology and continuous enhancement from its dedicated user base.

Shopware’s Scalability and Support Ecosystem

Founded in Germany over 20 years ago, Shopware has built a reputation for open-source ecommerce excellence in Europe. The platform is now gaining rapid traction in North America as an affordable, flexible alternative purpose-built for the midmarket segment. Shopware’s technical architecture and ecosystem of solution partners empower merchants to customize without high ownership costs.

Shopware also provides a clear bridge for merchants to scale to the enterprise level with more advanced licensing options. The software evolves alongside businesses to support complex brand portfolios, global sales, and custom omnichannel scenarios. Shopware’s cohesive, integrated approach even offers built-in tools for workflow automation, artificial intelligence, and decentralized hosting options.

For midmarket brands wanting both immediate savings and long-term scalability, Shopware checks all the boxes, presenting a compelling case versus Adobe and Magento. The platform’s expanding North American partner network provides robust implementation and support services as well.

Success Stories Showcase the Power of Alternatives

The shortcomings of Adobe and “legacy” platforms have driven concrete success for merchants exploring alternatives like Magento Open Source and Shopware:

• UK fashion brand Paul Smith migrated to Magento Open Source in 2018, leveraging the platform’s flexibility to expand global ecommerce sales rapidly.
• The US firm Decks Direct migrated to Hyvä and decreased their load times by 90% will increasing the velocity in which they could innovate on their website.
• Cosmetics retailer Lush achieved a 20% conversion lift after replatforming from Magento/Adobe to Shopware 6. This significant improvement is attributed to the user-friendly interface, flexible customization options, and fast page loading speeds offered by Shopware. Lush's success story highlights the importance of choosing the right e-commerce platform to enhance site performance, user experience, and ultimately, conversion rates.

These examples showcase that midmarket merchants can indeed find the technology capable of supporting their complex operational needs while enabling business growth. The diverse options with Magento Open-Source and Shopware accelerate innovation cycles and unlock critical resources to reinvest in the customer experience.

The Ecosystem Makes the Difference

A key driver prompting merchants to depart Adobe/Magento has been shortcomings in the support model and partner ecosystem tailored for the midmarket. Unlike Adobe and Salesforce, Magento open source and Shopware offer more accessible and affordable access to technical expertise and services.

The Magento community provides an enormous knowledge base, developers, agencies, and specialists available for hire. While the Magento ecosystems has experienced a renaissance in Europe, it has not taken on the same energy in the United States.

Shopware’s expansive global partner network offers dedicated training, support, and implementation assistance for merchants throughout their ecommerce journey. Their new focus on the United States also offers hope to midmarket merchants who seek a licensed software platform with a rebust tech-stack.

For midmarket brands without large in-house IT teams, choosing a platform with a strong external support ecosystem is crucial for long-term success.

Preparing for the Future of Ecommerce

The coming years will see an accelerating movement away from legacy platforms like Adobe/Magento that neglect the large and influential midmarket segment. Analyst Rick Watson of RMW Commerce predicts that “Brands are increasingly realizing that they are not technology companies and should not focus on optimizing their web stores.” Solutions like Shopware enable merchants to allocate resources towards core business competencies instead.

As more midmarket brands explore options beyond Adobe and Salesforce, they will discover vibrant open-source ecosystems ready to fulfill their needs. With the right technology foundations in place, this segment can pursue innovation and tap into the trillion-dollar potential of ecommerce. The coming platform exodus presents challenges but also exciting opportunities for brands that seize it.