When to choose Magento Enterprise edition over Community edition?

When comparing two editions of any software package, the best way to come to a decision is by weighing the costs and benefits. While Magento EE does have some great additional functionality, if you're not using it then it may not worth it. Jake Smith is absolutely correct in mentioning the scope of Enterprise Edition support. It is limited to¹ :

• Magento installation and downloads
• Magento usage issues
• Basic configuration
• Troubleshooting, Bug Fixes (core only), and Escalation

Generally, you'll be using your in-house development team or a hired team, which would cover issues not covered by that scope:

• Code Development
• Development Support
• Optimization and Performance Tuning
• Custom Extensions
• Custom Interfaces
• Custom Configuration
• Core Product Upgrades
• Data Migration
• Best Practices Recommendations

This leaves you in a position to decide if you need the features available. Take into consideration these key features² :

• Customer segments
• Targeted promotions and merchandising
• Product suggestion tools
• Search with Solr
• RMA
• Customer rewards
• Private sales
• Automated email reminders
• Gift registry
• Gift cards
• Store credit

During the planning phase of your project, you'll need to think about how you will track the ROI for these features. Each feature will need to be thoroughly planned, implemented, and then reported against. You'll want to make sure that the money coming in more than covers the cost of the features. Also, you'll want to make sure that if you only plan to use a handful of these features that it wouldn't make more sense to have them developed or to purchase existing ones (use caution when purchasing third-party modules, but that's a different topic).

For some sites, Enterprise makes sense. There is a marketing team, internal or external that will help plan usage for the marketing suite. They might have a team in place to analyze usage and to constantly maintain these features. If not, then start with Community. We have large clients on both Community and Enterprise, and talk extensively before making a decision. As a trusted extension of our clients' companies, it is of utmost importance to put their needs first.

The biggest scare tactic that I've seen is that Community is "Not PCI compliant". This is a long-winded topic, and can be very complex. If you're doing the following, then you'll be ok:

• Filling out your PCI paperwork
• Implementing PCI policies
• Documenting your PCI technical policies (mostly for your host)
• Using a payment gateway that you redirect to (PayPal) or HTTPS to communicate with an API

You'll be ok. Once you start doing more than 20,000 transactions per year, there will be more paperwork - but this shouldn't scare you. Your provider will be happy to work with you to not only fill out the documentation, but answer any questions you may have (we also do this). If this is too vague or anyone would like to discuss, feel free to contact me. There is much more to it than this, but it's a great start. Basically, don't ever let anyone bully you into not using Community because it's "not for production use" or "only for development".

As far as I know, Magento does not go through PCI certification for Community Edition or Enterprise Edition. It is a long and expensive process. The only products available from Magento that are PCI compliant are:

• Magento Go
• Magento Payment Bridge

So, hopefully this is an alright guide to helping make a decision. Remember - if the features in Enterprise will pay off, then get it. It's a great product and has some really neat stuff. If not, then wait. Although it's a bit more involved to migrate from Community to Enterprise than starting on it, you'll save some money that you can use for an extra custom feature or better hosting.

Sources:

1. http://www.magentocommerce.com/support/ee/
2. http://www.magentocommerce.com/product/enterprise-features

One of the reasons which has not been addressed by the other answers is indemnity. For behaviors and code which are part of the out-of-box codebase, Magento (eBay) will defend EE license holders in the event that a claim is made for damages or infringement.

Lest it be thought that this is only a minor feature of the EE agreement, take the complete POS patent troll (my opinion, of course) company named Kelora, which claimed that it held a patent on layered/faceted navigation in some contexts; ref http://www.ecommercefuel.com/patent-troll/ for a writeup. Because Magento offers layered navigation out of the box, EE licensees would be shielded from this suit and any damages won by the plaintiff, but CE users would not.

This is generally not a purchase decision for small shops, but is essential for enterprise-level businesses with sufficient assets to make them a target.

There's a really good Prezi about the differences:

http://prezi.com/kp0bprl0hnyn/magento-community-versus-enterprise/

The main differences from my POV:

• License: OSL vs. Commercial
• Modules: Advanced ACL, Content Stagine, Customer segmentation, CMS+ (Version Control ...), Full Page Caching, SOLR Search, RMA ...
• Professional support if you need it. As long as you can help yourself, it's fine, but think of a really big shop, which may loose thousands of dollars if the shop is down for an hour. Then the yearly fee is worth it to have that fallback solution.