Companies fret as costs soar for software subscriptions (2019) • Hacker News Board

Re: Companies fret as costs soar for software subscriptions (2019)

#101

Post by jazzyjackson » Thu, Mar 05, 2020, 6:34 PM UTC

jcrawfordor wrote: post #49

zcw100 wrote: post #27

Translation: Companies are pissed that the free software gravy-train is over and how they actually have to start paying for it. This is the way it should have been for the past decade.

What free software that enterprises were using has been replaced by SaaS?

I feel like the Linux, Apache, MySQL, and PHP was all free (as in beer) software that people rent in the cloud. If you're going to have web infrastructure, I'm not sure what difference it makes whether your cost center is an internal IT staff or an invoice from AWS.

Re: Companies fret as costs soar for software subscriptions (2019)

#102

Post by amelius » Thu, Mar 05, 2020, 6:35 PM UTC

Balvarez wrote: post #61

It seems to me companies should instead invest in open source alternatives. They could pay less, funding the development of open source alternatives and everyone wins. Blender is a good example of this.

Yes, commoditize your complement.

Re: Companies fret as costs soar for software subscriptions (2019)

#103

Post by 76543210 » Thu, Mar 05, 2020, 6:36 PM UTC

paxys wrote: post #8

If you are already spending >$200K per employee, spending another $10K to make them even 10% more productive is a bargain.

My bigger concerns is that it creates dependency, prices go up, and you either deal with it, or you change systems which is hugely costly.

FOSS as much as possible.

Re: Companies fret as costs soar for software subscriptions (2019)

#104

Post by vkou » Thu, Mar 05, 2020, 6:38 PM UTC

76543210 wrote: post #103

paxys wrote: post #8

If you are already spending >$200K per employee, spending another $10K to make them even 10% more productive is a bargain.

My bigger concerns is that it creates dependency, prices go up, and you either deal with it, or you change systems which is hugely costly. FOSS as much as possible.

FOSS is free if your time is worthless.

There's plenty of situations in business where using it is an incredibly good idea. There's even more situations where you're better off just paying for a service.

Re: Companies fret as costs soar for software subscriptions (2019)

#105

Post by briandear » Thu, Mar 05, 2020, 6:38 PM UTC

jariel wrote: post #89

paxys wrote: post #8

If you are already spending >$200K per employee, spending another $10K to make them even 10% more productive is a bargain.

"spending another $10K to make them even 10% more productive is a bargain." $200K is not a good benchmark for what companies spend. Median salary in the US is about $50K [1] Average overhead per/employee is 18-26% [2] So a $10K spend for 10% increase in productivity on someone earning about $60K ... is not a bargain. But there's a problem with this, because SaaS can be 1) Individual productivity 2) Operational produc…

It isn't about what the spend per employee, but about the revenue earned per employee.

> Median salary in the US is about $50K

The median company isn't necessarily spending $10k per employee for software.

Re: Companies fret as costs soar for software subscriptions (2019)

#106

Post by planetzero » Thu, Mar 05, 2020, 6:39 PM UTC

jolmg wrote: post #73

planetzero wrote: post #66

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.

It's not just because of piracy. SaaS has other advantages like making customer support easier, drive continued development with little risk, have easy cross-platform support, easier and more accurate usability testing, etc.

I agree with all of these. but, the main driver is piracy.

Look at products like 1Password. Everybody I knew was buying one license key and installing it on 5+ computers. Now that it's a service, you can't really do that anymore. The company definitely has more control over their software.

It's also one of the only ways to make money with open source, unless you want to make money on support, which is brutal for a small company with only a few employees.

Re: Companies fret as costs soar for software subscriptions (2019)

#107

Post by amylene » Thu, Mar 05, 2020, 6:40 PM UTC

jariel wrote: post #89

paxys wrote: post #8

If you are already spending >$200K per employee, spending another $10K to make them even 10% more productive is a bargain.

"spending another $10K to make them even 10% more productive is a bargain." $200K is not a good benchmark for what companies spend. Median salary in the US is about $50K [1] Average overhead per/employee is 18-26% [2] So a $10K spend for 10% increase in productivity on someone earning about $60K ... is not a bargain. But there's a problem with this, because SaaS can be 1) Individual productivity 2) Operational produc…

There is also opportunity cost - what could the employee have worked on that would have made you more money?

Re: Companies fret as costs soar for software subscriptions (2019)

#108

Post by optimiz3 » Thu, Mar 05, 2020, 6:40 PM UTC

xmprt wrote: post #98

genghisjahn wrote: post #93

Earlier quoted context omitted.

Where’s the list of awesome companies that succeed without managers?

Valve is the only one that I've heard of but without manager there need to be a lot of internal politics to get your work done.

Has Valve done anything noteworthy in the last 10 years besides milking the Steam store? Their half-baked console seemed like an attempt to do more of the former.

Re: Companies fret as costs soar for software subscriptions (2019)

#109

Post by briandear » Thu, Mar 05, 2020, 6:41 PM UTC

p_l wrote: post #53

brianr wrote: post #46

Earlier quoted context omitted.

As long as the purchased software is worthwhile (i.e. it makes employees more effective; the company gets more output per employee expense dollar), this trend should actually increase employee pay. Higher output per employee allows a higher salary per employee while still being profitable.

It also allows to pocket more money instead of paying it to employee. Remember, many people in USA believe that corporation has duty to increase shareholder value. And similar stupid ideas.

> many people in USA believe that corporation has duty to increase shareholder value. And similar stupid ideas.

No more stupid than the idea that companies are supposed to exist solely for the benefit of the employee. Shareholders are the ones that put the money up to start and grow the company in the first place, so yes, there is an obligation to shareholder value.

Don't like that? Then you are free to start a company that doesn't take investment.

Re: Companies fret as costs soar for software subscriptions (2019)

#110

Post by rileymat2 » Thu, Mar 05, 2020, 6:42 PM UTC

brianr wrote: post #46

throwaway5752 wrote: post #32

Earlier quoted context omitted.

They are just going to pay their employees less. Companies have to be profitable, temporary exceptions notwithstanding, and the money has to come from somewhere.

As long as the purchased software is worthwhile (i.e. it makes employees more effective; the company gets more output per employee expense dollar), this trend should actually increase employee pay. Higher output per employee allows a higher salary per employee while still being profitable.

Doesn't higher output per an employee lead to a change for demand of that type of employee, lowering pay?

It always seemed to me the value an employee brings is the upper bound on pay (demand drops near 0 over that), but the pay is determined by supply and demand for that labor.