Type Licensing model of E-Commerce

Various type of E-commerce platform falls into several industry classifications based upon their licensing , sales scenario and data exchange .

Type of licensing model :

1) On-premises E-commerce : On-premises e-commerce software usually requires initial one time purchase investment in terms of licensing fees. Also, it implies extra costs related to hardware and installation services as well as data migration and on-going maintenance fees that are usually charged on a yearly basis for software updates and support .

Advantage :

1. Easily customizable
2. Data security
3. High performance

Disadvantages:

1. Large initial investment
2. Self-maintenance
3. Technical knowledge

2) Software as a Service (SaaS) E-commerce : Software as a Service (SaaS) is a cloud based delivery model in which applications are hosted and managed in a service provider's data center, paid for on a subscription basis and accessed via a browser over an internet connection . 

Advantage :

1. Affordable low-cost solution
2. Hosted/upgraded by E-commerce provider
3. Easily scalable
4. High availability

 Disadvantages:

1. Limited integration with back-end systems
2. Limited control over the system 

3) Fully Managed (FM) E-commerce : Fully Managed (FM) E-commerce  is the next step of platform as a service (Paas). As a basis, PaaS consists of e-commerce software and hardware hosting. In addition to this, fully managed e-commerce solutions provide services like product picture taking, image editing, data management, customer support, marketing consulting .FM E-Commerce is offered to brick-and-mortar stores as a B2B solution to help them start selling online quickly and at low cost. The licensing model is usually based on the sales volume.

4) Open source e-Commerce : Open source e-Commerce is a free of charge platform that doesn’t imply licenses fee. Furthermore, open source users are also responsible for installing, maintaining, securing and configuring the software on their own servers. In order to set up an open source platform, basic technical expertise is required in the areas of web design and development. Software products that are distributed as open source are generally free, and users can access and modify the source code.

 Advantage :

1. Free of charge system
2. Wide variety of available add-ons/plugins/extensions
3. Better flexibility with a customizable source code

Disadvantages:

1. More technical knowledge required
2. Performance depends on hosting costs
3. No standard integration with back-end system