Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Companies fret as costs soar for software subscriptions (2019)

ibj.com

Post reply on HN
Print view View original

331–340 of 453 posts

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

#331

Post by roel_v »

zozbot234 wrote: post #228
vkou wrote: post #207

Earlier quoted context omitted.

1. You can, and it makes sense for FOSS projects with real support ecosystems, like RedHat, or for freemium FOSS projects, that explicitly sell support. 2. You can still be locked into a single-supplier when you pay for third-party FOSS support. In fact, most third-party FOSS support comes from a single supplier. 3. FOSS that doesn't have a sustainable business model attached to it rarely serves the needs of enterpri…

> There's FOSS alternatives to Sharepoint, but what's your FOSS alternative to Tableau? Salesforce? Slack? From a purely technical POV, I'm pretty sure that feasible alternatives exist to all of these, e.g. I don't think Tableau's data viz product does anything that couldn't also be done with relative ease in R. Of course, these commercial offerings extend way beyond the purely technical domain where FLOSS makes the…

"I don't think Tableau's data viz product does anything that couldn't also be done with relative ease in R."

It's zingers like this that keep me coming back to threads like this one! "No wireless. Less space than a nomad. Lame."

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

#332

Post by Aeolun »

jschwartzi wrote: post #282
paulddraper wrote: post #264

Earlier quoted context omitted.

Yeah, those numbers seem very suspicious. Cherry-picked maybe. Fifty dollars a month is a decently pricey subscription (like a lot more than Slack, JIRA, Lucidchart, Office, etc.), and you have twenty of those for every employee?

I've used specialized embedded system tools that cost $10,000/year per seat for tooling. Our QNX licenses were about $5,000 or $10,000/year alone. That's just to be able to run a piece of software. Autodesk tooling is $20 to 30k a year. Some of the more specialized tools cost six-figures. So I guess if you're just doing some basic web development those numbers are suspect. But if you do hardware or embedded software…

Maybe 1% of enterprises do hardware or embedded development.

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

#333

Post by Rury »

tunesmith wrote: post #321

Trying this out: SaaS is rent-seeking. The next downturn, tons of these businesses (disproportionately) will be demolished.

I think I'd agree.

I find SaaS is just outsourcing, and for whatever reason, management types need to come to understand that outsourcing is not always cheaper. It entirely depends on the circumstances.

Most businesses typically see IT as a cost center because they don't understand what IT is. The ones who outsource don't realize that a highly competent IT staff will both cost a lot of money and appear like they aren't working hard or doing a lot. So in the short term it looks like outsourcing (SaaS) is a way for the company to save costs, than doing things in house.

Frankly, the best analogy to SaaS/outsourcing I can think of is leasing cars...

It's cheaper in the short term to lease a car (i.e. outsource), than to buy a car (i.e. "do in house"). However in the long run it's generally cheaper to own a car than lease one. The exception is, if you have a need for a new car every 2-3 years, then leasing will be cheaper than always buying a new one every 2-3 years...

I think the same analogy applies to Renting vs Buying a house.

Anyhow, I'd argue most businesses would be better off in the long run doing things in house, but that requires paying more for upfront for talent (which makes such a prospect seem more expensive at first glance).

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

#334

Post by pas »

theklub wrote: post #312
crazygringo wrote: post #247

Look, either it's worth it or it's not. Costs may be soaring, but companies wouldn't be buying them if they weren't providing more value than they cost. But: > enterprise companies are spending an average of more than $10,000 per employee per year on software Sorry but I can't wrap my head around this. Is that really accurate? Between Office and cloud and HR/payroll and a few other tools I can imagine $1,000 /year. A…

What about VMware, backup software, system monitoring software, update software, remote support and meeting apps. Spam filter, Terminal server licensing. There’s more I’m forgetting

Why would any of them be per employee?

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

#336

Post by Spooky23 »

runforthehills wrote: post #231
Spooky23 wrote: post #74

Earlier quoted context omitted.

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

It won’t last for long. Whole categories of software will just the sucked up by the giants. We’re in a path to early 1980s computing.

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

#337

Post by onlyrealcuzzo »

Rury wrote: post #333
tunesmith wrote: post #321

Trying this out: SaaS is rent-seeking. The next downturn, tons of these businesses (disproportionately) will be demolished.

I think I'd agree. I find SaaS is just outsourcing, and for whatever reason, management types need to come to understand that outsourcing is not always cheaper. It entirely depends on the circumstances. Most businesses typically see IT as a cost center because they don't understand what IT is. The ones who outsource don't realize that a highly competent IT staff will both cost a lot of money and appear like they aren…

SaaS seems like a trap.

Step 1) Offer artificially cheap software to replace employees.

Step 2) Attracted by low prices and productivity, employers adopt software.

Step 3) Software works. Employers lay off employees.

Step 4) SaaS vendor needs to make profit, raises prices significantly.

Step 5) Software is no longer cost-effective to employer, but employer doesn't have employees to fall back on.

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

#338

Post by onlyrealcuzzo »

leetcrew wrote: post #315
a13n wrote: post #308

Earlier quoted context omitted.

That's per license, per employee? Or company-wide license fee? If the latter, you still need to divide by the total number of users of the product.

if GP works in aerospace, those are very likely per-seat license costs.

Completely out of curiousity -- what software costs $35k per seat per year??

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

#339

Post by Aeolun »

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…

This may be true for CEO’s turning dysfunctional companies around on personal authority, but I find it hard to believe for companies that are already running perfectly well.

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

#340

Post by patothon »

onlyrealcuzzo wrote: post #337
Rury wrote: post #333

Earlier quoted context omitted.

I think I'd agree. I find SaaS is just outsourcing, and for whatever reason, management types need to come to understand that outsourcing is not always cheaper. It entirely depends on the circumstances. Most businesses typically see IT as a cost center because they don't understand what IT is. The ones who outsource don't realize that a highly competent IT staff will both cost a lot of money and appear like they aren…

SaaS seems like a trap. Step 1) Offer artificially cheap software to replace employees. Step 2) Attracted by low prices and productivity, employers adopt software. Step 3) Software works. Employers lay off employees. Step 4) SaaS vendor needs to make profit, raises prices significantly. Step 5) Software is no longer cost-effective to employer, but employer doesn't have employees to fall back on.

Talent pool is small and/or hard to access anyway, so even without step 3), as a manager, you always look at ways to do more with less, and SAAS gives you this. It's then a matter of finding the right balance.
Post reply on HN