What Does The Future Hold For Magento After eBay’s Split?

The official announcement of an eBay split is not a surprise to anyone familiar with the industry. It had long been announced that PayPal and eBay were separating in an effort to achieve maximum growth without the hindrance of being tied together as one company with misaligned mission objectives.
Those in the Magento community are curious and perhaps a bit apprehensive about what these changes will mean for Magento’s future. There are no definitive answers, only the speculation that always runs rampant when splits among massive companies are announced. The division of Paypal from the eBay conglomerate does not come as a surprise, having been announced over 9 months ago, yet the separation of eBay Enterprise into its own entity for sale or IPO was just publicly announced last Wednesday, the 21st.

What are the Benefits of a Split?

The splitting up of eBay into three separate entities is designed to be in the best interest of each individual company by allowing each entity to focus on their own individual growth. This should be a positive development for Magento operating under the eBay Enterprise umbrella.
A statement from eBay reads:
It has become clear that [eBay Enterprise] has limited synergies with either business and a separation will allow both to focus exclusively on their core markets, as we create two independent world class companies. Looking forward to 2015, we will be simplifying organizational structures to focus the businesses and ensure that we are set up to compete and win.
This is all sounds quite promising for those worrying about how eBay Enterprise branching off on its own will affect the Magento ecosystem. Despite how amazing everyone using and making a living off of Magento know it to be, it is simply not a priority in the hierarchy of the Ebay empire. On that note, eBay Enterprise itself was little more than the red-headed step-child of the eBay family in terms of importance. The restructuring of eBay will mean more time and attention will be devoted to the growth of Enterprise and thus to Magento. This should all be comforting news to Magento developers and agencies, who should be looking at the eBay split as an encouraging sign for Magento’s future.

What’s Good for eBay Enterprise is Good for Magento

This may seem obvious, yet there are many within the Magento Community who feel that Magento is better off on its own. This negates the positive impact that all the resources of eBay have provided (and will still provide through eBay Enterprise). Without eBay money, all the impressive and important Magento Meet-ups and conferences would not have been possible, at least not on the level they were. Having an owner with deep pockets is something the Magento community should not take for granted, especially as the competition of eCommerce platforms continues to increase.
It is imperative for Magento to continue its growth and increase its amazing eco-system in order to stay on top of its market. Thankfully, this is something the eBay brass is well aware of as this statement from eBay illustrates:
“Enterprise continues to expand its omnichannel capabilities, delivering $1 billion in ship from store sales in 2014, and broaden Magento’s reach and global ecosystem.”

What will the future hold for Ebay Enterprise?

There are many factors that will determine the Magento future as it remains bundled within the eBay Enterprise unit. At the forefront is the essential question of who will take the helm as eBay Enterprise branches out on its own. eBay has announced it will put the Enterprise unit up for sale or seek an IPO. Which of these routes Enterprise ends up going down will likely determine much regarding its future.

Potential Buyers

Whoever ends up buying eBay Enterprise, if it does not go the IPO route, will determine the amount of resources and dedication pumped into Magento. A tentative list of potential buyers for eBay Enterprise all include companies who rely on building connections with other businesses. This is to be expected for anyone wishing to incorporate eBay Enterprise into their company portfolio. Simply stated the goal of eBay Enterprise is to help companies grow online. This broad objective makes it attractive to many different types of companies who could all benefit from being able to offer this growing and important service to clients.
Owning Magento, which those of us in the Magento community believe to be far and away the best eCommerce platform on the market, is an essential lure for any buyer looking into what eBay Enterprise has to offer. The short list for now includes (and is not limited to) Salesforce.com, IBM, DemandWare, Adobe Systems, and the startup Bigcommerce, which would likely need investment help for such a high profile target as eBay Enterprise.

What would a Sale of eBay Enterprise mean for Magento?

From the above-mentioned short list, with the exception of Salesforce, each potential buyer has its own eCommerce CMS platform that competes with Magento. IBM, for example, has its own eCommerce platform, Websphere, that would directly compete with Magento. This creates a very interesting dynamic were IBM to bid and eventually buy and control eBay Enterprises and thus Magento. Buying up the competition is a standard practice in business mergers and acquisitions. This particular scenario would be very interesting considering it would mean that one company is the owner of two different and competing eCommerce platforms.
Would IBM try and keep both platforms afloat and offer both options to clients and help them choose the best fit for them and their needs? Or would they let one platform die and put all their resources into the better option? Having multiple options is usually never a bad thing, yet were IBM to use both Websphere and Magento as competing partners, Magento would once again face the reality of not getting the full attention and resources from its owner. The alternative would be a choice for IBM between Websphere and Magento. This seems like a rather obvious decision as Magento holds the lion-share of the market and is, in the bias and humble opinion of us here at Trellis, a far superior platform. We have personally helped client’s transition from Websphere to Magento and have seen them reap the benefits first-hand.
The same scenarios are applicable to the other companies on this list that also have their own eCommerce platform. It would seem far-fetched that anyone would purchase eBay Enterprise with the intention of letting Magento die. Magento’s thriving eco-system makes this particularly un-feasible and with the release of Magento 2, it is extremely un-realistic.

Will eBay Enterprise focus on Magento as its eCommerce platform of choice?

Many within the Magento community believe that eBay has not done enough to advertise and promote the Magento brand. Magento did not become part of the eBay Enterprise sector until late 2013 and its place within the unit is ripe for speculation. As Magento’s owner it would seem logical for eBay enterprise to promote Magento as its eCommerce platform of choice, yet they have not unequivocally done so. From an objective standpoint, eBay Enterprise does not want to limit its options and its client base by offering one eCommerce platform.
Owning Magento is a clear conflict of interest for them in advising a client on what eCommerce platform to use. By straying away from making Magento synonymous with eBay enterprise it may give them the appearance of objectivity when it comes to providing eCommerce advice to merchants, yet it is still somewhat dismaying for the Magento community, who believe eBay should be doing more to promote and grow Magento. The future buyer of the eBay Enterprise unit will likely determine its level of symbiosis with Magento.

Magento’s Immediate Focus for Now

Speculating about Magento’s future is inevitable given the current circumstances regarding eBay, but eCommerce competition is always on the rise and it is important for Magento to not be content resting on its laurels. Magento must continue to focus on growing its install base to keep its lead on the competition. Quality control is another important factor that must not be overlooked. This includes and is not limited to all Magento companies and agencies, Magento extensions and Magento developers.
The current lack of quality control within the Magento community has been a cause of concern for sometime now and certainly something that will weigh on the minds of potential buyers. As eBay CEO John Donahoe stated last Wednesday after the announced split, “No one knows what’s going to happen down the road.” This makes it all the more important for Magento to continue improving, evolving and innovating its brand, regardless of who ends up with the title of official owner. We, as the Magento community, will ultimately be the ones who dictate how bright the Magento future will be.
Please comment if you have any insight into whether you believe this is a good or bad thing for Magento. We want a broader perspective on this and welcome any comments!

Update! Ebay Enterprise has been officially sold and we have a new post talking about this here.