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Ask HN: Making a living selling software components, not SaaS?

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Re: Ask HN: Making a living selling software components, not SaaS?

#21

Post by kops »

hackula1 wrote: post #11
meemoo wrote: post #6

Earlier quoted context omitted.

Stackoverflow is close, but the only currency is karma. But you can offer it as bounty to answer your question. Throwing money into that dynamic is opening all kinds of worm cans.

This pretty much sums up how that would go down. Q: Should return 3 for this test case x = add(1, 2) assert.equals(x, 3) A: function add(a, b){ return 3 }

I get your point and fully agree with it.

But it makes me wonder when exactly we start to call something over-engineered. The same function will be implemented differently depending what you are going to feed into it i.e. if the numbers are sufficiently large then you need to worry about integer overflow etc. Probably a function definition should be considered incomplete without pre/post conditions.

Re: Ask HN: Making a living selling software components, not SaaS?

#22

Post by alecsmart1 »

As a buyer, here are a couple of software I've bought-

- vBulletin forum (http://vbulletin.com) for the base of my site - CometChat (http://cometchat.com) for adding Facebook like chat to the site - Kayako (http://kayako.com) for support tickets and issues

The advantage I found with self-hosted software is that its one-time. I pay for it and I don't have to worry about a monthly billing. Similar software in SaaS model would cost me about $70-$100 per month. Eventually these costs start adding up. In one-time, I know that my investment is around $500-$800 or so. But that's all then. I can use the software for years without an issue.

Re: Ask HN: Making a living selling software components, not SaaS?

#23

Post by 6ren »

People making money selling software components: http://www.componentsource.com/index.html http://bfo.com/purchasingfaq.jsp http://www.chilkatsoft.com/purchase2.asp

Discussion (though might be dying): http://discuss.joelonsoftware.com/?biz

Withholding Tax (if you are non-US, selling to US) "Components" are taxed at 5%; "desktop tools" (like compilers, editors, IDEs etc) are taxed at 0%. The tax is an admin hassle all round, so this is one plus for not selling components. (NB: this is an oversimplification, there's tax treaties, 30% tax if not under a treaty, byzantine IRS forms, tax rulings on the definition of "royalty" for components, etc).

ASIDE an idea: "Software Components as a Service". That is, it's in the cloud and paid for like a SaaS; but the service it provides is not an end-point (like an API to a business), but a transformation - the kind of thing you'd normally call a library for. e.g. text->pdf. Sounds inefficient, but you co-host with AWS/dropbox/heroku/GoogleApps etc so bandwidth is fast and free. (Alt: let the customer install a copy in the cloud, but you charge like a SaaS business model - an advantage for them is they can expense it monthly, not taxed like a capital purchase).

I've seen some evidence of this, in the form of cloud integration services e.g. http://www-03.ibm.com/software/products/us/en/castiron-cloud... (2010), but it's still mostly about integrating end-points, not the bits in between.

Re: Ask HN: Making a living selling software components, not SaaS?

#24

Post by noir_lord »

23andwalnut wrote: post #16
rachelandrew wrote: post #13

We sell a downloadable, self hosted CMS ( http://grabaperch.com ). We launched it as a side product of our consultancy business just over four years ago and by the beginning of this year we stopped taking on client work as the income from Perch has essentially replaced that of a successful consultancy, so it is possible. We don't have recurring revenue as such, a license is a one-off purchase and includes all support…

I also sell a downloadable self hosted app that targets developers (www.duetapp.com). I would love to hear about how you market Perch. My app has been growing pretty well since it was launched 5 months ago, but it's not yet profitable enough to replace my client work. I'm in the 50/50 place you described and it's....challenging...

Slightly off-topic but kudos on that landing page.

Very cleanly done.

Re: Ask HN: Making a living selling software components, not SaaS?

#25

Post by handzhiev »

unreal37 wrote: post #9
QuantumDoja wrote: post #3

I'm a developer, I remember one time I needed to have a particular piece of functionality in an app. I could have built it, but I found that someone was selling what I wanted for $3.00 on the internet, it was a no-brainer. I paid with something like gumroad, downloaded and plugged it in within a matter of minutes, vs the few hours I would have spent writing/debugging.

Odd price, $3. He could have doubled his price to $6, doubled his income, and lost no sales. Anyone who would consider buying a component online would surely not blink at the difference if it saves them a half-a-day of effort.

If that was on a site like codecanyon he might had no choice for the price. The staff there have their own ideas for the prices and doesn't let sellers set their own.

Re: Ask HN: Making a living selling software components, not SaaS?

#26

Post by 6ren »

meemoo wrote: post #6
smartaleckkill wrote: post #5

Earlier quoted context omitted.

That's interesting. As you say, it's a no-brainer. I wonder if some kind of micropayment market in functions could be pulled off... The kind of thing Ted Nelson or Jaron Lanier talk about, only for small pieces of reusable code rather than small pieces of reusable text.

Stackoverflow is close, but the only currency is karma. But you can offer it as bounty to answer your question. Throwing money into that dynamic is opening all kinds of worm cans.

http://www.experts-exchange.com/ --- "In defense of Experts Exchange" https://news.ycombinator.com/item?id=6406373

But (I think) he means as a product, not a service (i.e. for bounties, only the asker pays, so it's a service; though it's true that everyone else benefits too).

I like this idea. The big problem, as always, is the boundary or interface of the module/component. (1). The buyer has to specify it, which is usually the difficult bit and writing it is usually easy. (2). For a market, you need to find modules that many people need, that people can search for and find, and that are difficult enough to implement that people would buy rather than build.

Maybe it's possible, for things that seem one-off or too specialized to a person, if you reduced friction enough, in a SO way. They've solved the search problem.

I guess an example would be a square-root function. I wouldn't know how to code it, I'd have to look it up, test and debug. It would take at least hours, I'd think. Of course, it's such a useful one, it's already done. That's the fate of all generally useful functions. The exceptions are new ones and niche ones.

I guess you could just add a little "debugged code" box for SO, and the person keeps coming back to it, to support it. This might be a useful addition; but I think you're right that money would spoil it. However... if you imagine a spectrum from one-liner to massive library, there's probably some level where the amount of work would make it reasonable to pay.

Conclusion: to see the value in the idea, leave money out (build something people want). How would you modify SO, or start a new one, to provide this value, or reusable functions/code snippets?

Re: Ask HN: Making a living selling software components, not SaaS?

#27

Post by arek2 »

My website http://5000best.com/tools/ may be relevant. It lists mainly the most popular SaaS tools, but a few categories include widely used software components (non-free software only - no open source):

http://5000best.com/tools/Modules/

http://5000best.com/tools/Software_Dev/

http://5000best.com/tools/Specialized/

http://5000best.com/tools/Wordpress/

http://5000best.com/tools/Joomla/

http://5000best.com/tools/Drupal/

http://5000best.com/tools/Magento/

http://5000best.com/tools/E-commerce/

Re: Ask HN: Making a living selling software components, not SaaS?

#28

Post by watersco »

I have a counter-example. I built an OSX application for remotely tailing logs on servers (http://www.remotetailapp.com/). Originally I did it to scratch and itch when I was administering a bunch of servers over SSH. I added Heroku log support when I started working on a Heroku project. I had dreams that it might grow into a self-sustaining side project, but it hasn't really taken off. The key lesson that I learnt is that the technology just solves part of the problem. Just because it is downloadable software rather than SaaS doesn't mean that you don't need to put effort into marketing and sales.

Re: Ask HN: Making a living selling software components, not SaaS?

#29

Post by davidjgraph »

We have sold a JavaScript component as our sole source of revenue for about 4 years now, having started selling it 8 years ago.

We've played around in the SaaS market, in end-user apps that use the component, but we've never found anything that makes even remotely the amount we make from selling the component. A lot of people think SaaS is easier, I personally find it x10 harder.

We ended up gaining far more benefit from giving away the SaaS products as a means of marketing the component.

The thing with the component market is the revenue is far more an "amplification" of the economic environment. You're at the bottom of the food chain, you need new development projects to be started to be considered. Development projects are expensive. In late 2008, budgets were slashed, our component sales probably dropped 80%.

SaaS is much more stable revenue-wise. But on the flip-side, in 2007 when the going was good, sales just soared, it's not only downturns that you feel in the component market.

My advice would be

- focus on building a cash buffer as soon as possible, doing so was the only reason we're still here.

- aim for the Enterprise market, forget three figures a license sales. That level means the component is too simple, something open source will come along and kill you.

- The component market is better for margins and good salaries. The SaaS market generally scales better. Which you choose probably depends what you want to do with the business in the medium and long term.

Re: Ask HN: Making a living selling software components, not SaaS?

#30

Post by quaffapint »

I've been selling a php self-hosted ad server, mySimpleAds, at http://wwww.clippersoft.net for years, which makes some side money. I recently launched a SaaS version at http://mysimpleads.com .

For the little bit the SaaS has been up, people still seem to like the self-hosted version. So, I guess it really depends upon the product and your target customer. There's some things that some people just prefer to host on their own :-).

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