What The Ebay Enterprise Sale Could Mean For Magento

Ebay has been looking to split up into three parts for some time now. A little while ago we wrote a post speculating on what this could mean for Ebay Enterprise and the future of Magento and who the most likely potential buyers were. The day has finally come and we now know who the buyers are, but not how the future of Magento will play out with these new owners and the leadership that will come with such a change.
Magento is a massive ecosystem, and hundreds if not thousands of agencies and third party technologies rely on the platform for their business revenue. Over 200,000 merchants rely on the Magento eCommerce software and many of them are some of the top eCommerce websites in the world. Despite the incredible success of Magento, there is still criticism about how Magento operates and handles this unbelievable eCommerce influence.

Is This Good or Bad?

The split off from Ebay / Paypal and the new ownership / leadership of Ebay Enterprise could open a great new chapter for Magento’s short but eventful history. Magento has always thrived because of its flexible and open source architecture leading to a strong, committed, and intelligent community that builds on top of the core open source or enterprise software.

We Think Good!

Our bet, and it looks like others too, believe this is a great sign for Magento and Ebay Enterprise. Ebay Enterprise was the smallest branch of the three tiered Ebay business model, thus resulting in the least amount of attention. On its own, Ebay Enterprise and thus Magento can regain the focus they had before they were bought by Ebay which made them so successful.
Ebay Enterprise president Craig Hayman made a statement on the Magento blog today explaining that this is an exciting opportunity for Magento and the future of the brands that rely on the platform.

Why So Undervalued?

The fact of the matter is that Magento is incredibly under valued. It is the only platform that can work for a small, medium, or even fortune 500 business successfully. It blows the small business eCommerce platforms like Shopify out of the water and is much less expensive for a full implementation than the other enterprise platforms like Hybris but offers comparable scalability and value.
The total sale of Ebay Enterprise at 925 million is less than what Shopify is valued at, yet the Magento technology alone, a subset of Ebay Enterprise, is much better. Why the misalignment in value? Well, Shopify simply has a better revenue model than Magento, as Magento has not yet found a way to properly capitalize on its massive 200,000 plus users. Only a small fraction of Magento merchants pay for the yearly Magento Enterprise license fee and other Magento services.
If the new owners and new focus on Magento as a core offering of Ebay Enterprise can solve this revenue issue, Magento has incredible potential to become one of the best companies in the world.

Please comment or leave any insight as to what you think this might mean for us who rely so heavily on the Magento platform and community to keep our businesses running.