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

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

#231

Post by runforthehills » Thu, Mar 05, 2020, 8:06 PM UTC

Spooky23 wrote: post #74

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.

Nonsense. Enterprise customers almost always paid 20-35% maintenance on perpetual software. 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…

Oh I like that point of view, it really does force everyone to compete at a much faster pace. We've ended up with such a great selection of options as a result (And a lot of innovation we probably wouldn't have seen otherwise) because of the competition/expansion

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

#232

Post by runforthehills » Thu, Mar 05, 2020, 8:09 PM UTC

jariel wrote: post #29

$10K seems like a lot. If Slack is going to round out at $100/a/staff member ... then how on earth does that number creep to $10K? I think there might be some 'crossing of streams' in this data, for example, perhaps they're including general services like AWS in there, which I'm not sure makes sense because conflating product-related IT charges with other services isn't helpful. Also relevant is the fact that said AW…

We just upped our lowest tier prices to over 10k a year and are still seeing companies falling over themselves to sign up and implement. I think it's 100% about how much value people see in something.

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

#233

Post by jcrawfordor » Thu, Mar 05, 2020, 8:09 PM UTC

zozbot234 wrote: post #190

jcrawfordor wrote: post #166

Earlier quoted context omitted.

There were still internal costs related to running IRC though, assuming you weren't paying some provider to do it for you... not large internal costs, but I don't think on a radically different scale from Slack considering that you could also view a Slack subscription as covering a client with a lot more features than a typical IRC setup (sure you could run a web client, bouncers, services, but that's all increasing…

Paying some provider to run a standard FLOSS service based on your needs is going to be a hell of a lot cheaper than some bespoke SaaS solution. And Matrix gives you those "rich client features" anyway, with a broad choice of client-side software - so it's a better comparison than IRC.

Indeed, Vector's managed Matrix service is quite a bit cheaper than Slack. but it's also effectively subsidized by Matrix's patreon backers, such as myself. Not necessarily saying this is right or wrong, just that the money always comes from somewhere.

Additionally, as a rather dedicated Matrix user and advocate, it's clearly less stable and usable than Slack at present. See e.g. the effort towards a complete rewrite of the Riot on mobile and significant changes to Riot on web. Most third-party clients are not feature complete and are often rather unstable themselves (e.g. I am a heavy user of the Weechat python plugin but it takes expertise to get it up and running). The pricing no doubt accommodates the fact that anyone adopting Matrix for business use is going out on a limb to some extent.

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

#234

Post by ckdarby » Thu, Mar 05, 2020, 8:10 PM UTC

XCSme wrote: post #209

robbiemitchell wrote: post #179

You know what costs way more than SaaS? Hiring, managing, and losing people. Leveraging high-quality people with tooling, both for individual functions and for company-wide process, is a no-brainer.

There is also the option of buying self-hosted products and installing them on your own server. The setup time is usually the same, but you only pay $5/mo for the server and maybe $100 one time for the product, instead of paying $100/mo for the service. This is also multiplied by X, where X is the number of subscriptions you have.

No. Please do not suggest this ever.

Every company I've worked at and that has gone with self-hosted products have lost more money than paying the subscription.

Self-hosted nearly never gets upgraded because there's no budget and it can always be cut from the budget because it'll keep functioning.

Corp IT who usually get stuck managing these become the gatekeepers. They have nearly zero incentive to upgrade because the risk is they take down the whole thing for longer than the maintenance window.

During this time the product innovates & none of this is usable until the upgrade. I've seen whole teams created to build out tooling on top of Jira only to find out if the company had spent $100k they could have upgraded and gotten the features.

Nobody knew said features existed because nobody had been exposed to the most recent version and we had a 4 year old version.

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

#235

Post by annoyingnoob » Thu, Mar 05, 2020, 8:11 PM UTC

lalos wrote: post #185

annoyingnoob wrote: post #159

So many companies try to force you onto SaaS. Products that you previously had a perpetual license for are now SaaS only if you want to upgrade. O365 is the only SaaS platform that makes sense where I work. But we have a bunch of SaaS services because that is the only way the product is offered. I hate SaaS.

That was a strategic move, if you keep on the perpetual license for Office you promote people using other services for sync-in and storage. If you move it to a service like O365 you include that as part of the subscription (online editor and cloud storage). Not doing that transition might have cost Microsoft their position in the productivity app world, as new companies started popping up that were cloud first. Plus,…

The thing about O365 is the pricing, its priced about/near the price of the 'Pro' version of the desktop version (for business users). We get a lot of value out of the online services that come with it, O365 is a better value than the straight perpetual license (it comes with a lot of other products).

For Quickbooks on the other hand, I'm not sure that the SaaS offering has feature parity with the desktop version.

I find a perpetual license for Acrobat Pro 2017 to be a better value than a subscription to Acrobat DC. And Adobe makes it hard to find how to purchase the perpetual license, you have to go searching for the right link.

Yes, these are all business decisions and mostly working against me.

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

#236

Post by ahkurtz » Thu, Mar 05, 2020, 8:18 PM UTC

bosma wrote: post #220

dclusin wrote: post #119

Earlier quoted context omitted.

Hard to find for sure. There was a time though when we didn't pay CEO's & professional managers 500x as much as the lowest paid employee. When we did that we still managed to go to the moon, split the atom, develop computers, create antibiotics, and lots of other neat things.

Do you have evidence for your assertion? Of what significance is the ratio of highest to lowest paid employee? Shareholders of a particular company pay CEOs, not whoever "we" is. Here is evidence that claim CEOs produce more value than they are compensated for (i.e. they are underpaid): https://faculty.chicagobooth.edu/steven.kaplan/research/kceo... https://econpapers.repec.org/article/inmormnsc/v_3a60_3ay_3a... http…

Producing more value than you are compensated for ... hmmm what does that sound like? You could say it sounds like the human condition. Which employees in the pyramid do you think have the worst scalar here?

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

#237

Post by jliptzin » Thu, Mar 05, 2020, 8:18 PM UTC

ckdarby wrote: post #234

XCSme wrote: post #209

Earlier quoted context omitted.

There is also the option of buying self-hosted products and installing them on your own server. The setup time is usually the same, but you only pay $5/mo for the server and maybe $100 one time for the product, instead of paying $100/mo for the service. This is also multiplied by X, where X is the number of subscriptions you have.

No. Please do not suggest this ever. Every company I've worked at and that has gone with self-hosted products have lost more money than paying the subscription. Self-hosted nearly never gets upgraded because there's no budget and it can always be cut from the budget because it'll keep functioning. Corp IT who usually get stuck managing these become the gatekeepers. They have nearly zero incentive to upgrade because t…

I agree with your point but that's just astoundingly stupid to put a team of people on building your own features on top of Jira without first spending 5 minutes to look into whether your new features have already been developed in more recent versions.

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

#238

Post by omgwtfbyobbq » Thu, Mar 05, 2020, 8:18 PM UTC

_jal wrote: post #212

phkahler wrote: post #43

Earlier quoted context omitted.

No, total cost would be a better measure since there is no per-person cost to the SaaS provider. If you have 10,000 employees that's $100M per year in expenses. If you're just renting payroll, purchasing, etc software for that price it'd be far cheaper to roll your own, or pay a few people to work on OSS full time.

We wanted to build our own payroll system, but engineering is too busy milking the cows to restock the fridge to learn the tax code for multiple countries.

Has anyone thought about asking engineering to implement or build an interface for someone else (business side?) to manage country level differences in taxes?

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

#239

Post by annoyingnoob » Thu, Mar 05, 2020, 8:19 PM UTC

awinder wrote: post #187

annoyingnoob wrote: post #159

So many companies try to force you onto SaaS. Products that you previously had a perpetual license for are now SaaS only if you want to upgrade. O365 is the only SaaS platform that makes sense where I work. But we have a bunch of SaaS services because that is the only way the product is offered. I hate SaaS.

I personally hate rose-colored visions of the past, of which this is one that I commonly run into :) Other things I hated: 1. yearly support contracts that were basically a necessity to purchase alongside (very expensive) enterprise software. 2. working at companies that had ancient versions of software running, and needing to dig up old matching documentation (when possible) 3. paying a large sum for a piece of soft…

There are plenty of software packages with perpetual licensing that do not operate Oracle-style licensing BS and support.

My experience with SaaS support is terrible. In my recent experience, software with Oracle-style licensing BS offer way better support.

The flip is of being 'stuck' on a version is constant updates. Oh, they decided that the UI need a complete revamp over the weekend and now everything runs slower as folks learn the new interface that was foisted upon them. Or a SaaS decides to change its API and our custom integrations break. Not all SaaS platforms are good at communicating change and preparing users for change. Sending an email to the accounting person that paid the bill about the API change does no one any good.

It seems we could argue this in either direction. Point is that some things I would like to buy perpetual, for reasons, are only available as SaaS. For the most part, in my case, SaaS isn't the best answer but in some cases I'm stuck with it. SaaS drives up costs, and frustration levels among the staff.

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

#240

Post by knightofmars » Thu, Mar 05, 2020, 8:24 PM UTC

These two sections call out the root of the problem. Both point to a lack of a holistic approach to managing an organization's software licenses.

"According to research firm IDC, 60% of U.S. technology spending occurs outside companies’ IT department."

...and...

"Many subscriptions, Christopher said, cost $8,000 or so a month—or about $100,000 a year. And it’s not uncommon, he added, for subscriptions costing $10,000 to $50,000 annually “to never be seen by the IT department.”"