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SaaS is really one of the only ways to make money and build a company with software these days. Decades of piracy have pushed most companies to create a subscription service where the software can't just be copied.
My take is that SaaS is just a more predictable business model with fewer operating complexities and easier sales funnels.
Earlier quoted context omitted.
I don't know about most enterprises but I'm guessing any given cost per employee includes a lot more than salary.
In London, I'd guess the median salary for most enterprises is around £30-40K. National insurance, a desk, and a few other benefits are probably £20K on top of that.
SaaS is really one of the only ways to make money and build a company with software these days. Decades of piracy have pushed most companies to create a subscription service where the software can't just be copied.
SaaS is really one of the only ways to make money and build a company with software these days. Decades of piracy have pushed most companies to create a subscription service where the software can't just be copied.
Places that I’m familiar with had SaaS spending went through the roof because of Microsoft, Oracle and Adobe. Actual spend hasn’t gone up and in many cases gone down as the usual software company overselling bullshit is easier to avoid.
On the flip side, the treadmill and all or nothing approach to the rental model kills small vendors. At one place I know, we purged 60% of vendors. Companies who are obnoxious rent seekers are easy pickings too. You can pretty easily purge them, as you’re on an upgrade treadmill anyway!
Earlier quoted context omitted.
> Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month. Sure, but then there's the slightly more complicated economic calculus: do we build our own tooling now, for a significant up front cost, or do we buy the SaaS which we might use essentially forever for an unknown future TCO?
How often do you build in house tooling or applications that have no ongoing operating commitments? It's upfront capital investment plus generally unpredictable maintenance vs. More predictable but maybe higher operating expenses
Absolute zero ongoing commitments? Very rarely.
Negligible ongoing commitments compared to the outsourcing alternative? Many, many times.
If you are already spending >$200K per employee, spending another $10K to make them even 10% more productive is a bargain.
SaaS is really one of the only ways to make money and build a company with software these days. Decades of piracy have pushed most companies to create a subscription service where the software can't just be copied.
I don't know, did piracy kill the music industry's ownership model or was SaaS just more popular/lucrative/financially gamable? My take is that SaaS is just a more predictable business model with fewer operating complexities and easier sales funnels.
yes
Earlier quoted context omitted.
Obviously the fully-loaded cost of an employee goes beyond the cash compensation. But even so, the average salary in the US is Companies are spending far less than $200k/employee all-in. So to slightly rephrase the OP's question: > Do people really believe that $100k is a normal salary?
Yes but companies that are spending $60K on an employee aren’t spending $10K on their SaaS.
This trend has the potential to be a win-win for vendors and customers. Vendors get a more stable and predictable source of revenue, while customers move their pesky lump sum cap-ex to the smoother op-ex payments. Now the question is are those SaaS offerings priced correctly for this to remain sustainable, or will all this break at some point (perhaps catalyzed by an economic slump).
The financial accounting standards board updated their guidance in late 2018 to require calculating the present value of expected future SaaS agreement payments and adding that to the balance sheet, so it’s still CapEx in most cases.