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

341–350 of 453 posts

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

#341

Post by tunesmith »

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…

This is also part of why I find B2C SaaS so aggravating. Sometimes it feels like there's not a more effective way to get in the way of my retirement plans. I mean, sure, in the prime of my career I like buying a new laptop every year or two, but there will come a time when I want to stop spending and just hold on to my assets until they break. You can't do that with yearly software licenses or subscription services.

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

#342

Post by hn_throwaway_99 »

SonicScrub wrote: post #265
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…

That number doesn't surprise me. Your quick $1000-$2000 estimate is probably accurate for a typical office worker, but the more specialized positions skew the average. I work in mechanical/aerospace engineering for a large company. A lot of the software we use is very specialized and very costly. Here's the yearly costs from the top 4 softwares I use based on a quick google search: 1) $35,000 2) $15,000 3) $10,000 4)…

But software in highly-specialized industries (i.e. needs a lot of functionality but the install base just isn't that big) has always been really expensive. This is pretty much unrelated to the SaaS boom of the past 10-15 years.

I don't think specialized positions have skewed the change much towards increasing SaaS costs.

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

#343

Post by the8472 »

pas wrote: post #334
theklub wrote: post #312

Earlier quoted context omitted.

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?

per-user licensing.

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

#344

Post by irrationalactor »

tunesmith wrote: post #321

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

Back when every person in the office required their own secretary to do the work that they now do with Saas, did you call secretaries rent-seekers?

Saas is productivity growth at work. Rent-seekers add no additional productivity to the economy, they diminish it. Saas is the opposite.

Are there individual examples where Saas companies might be providing negative value? Of course (I assume somebody will respond below with one such personal anecdote).

However, in aggregate, Saas is not rent-seeking.

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

#345

Post by nradov »

a1369209993 wrote: post #316
nradov wrote: post #294

Earlier quoted context omitted.

Surely you jest? If that was a serious comment then you obviously have no understanding of the business and legal requirements for payroll systems.

If you're legally required do your payroll with a buggy computer system rather than manually (and not even "this specific buggy computer that we gave you", just any old buggy piece of crap), then, uh, I don't really know what to say to that. My condolences, I guess? If you mean it's impractical and error-prone to do payroll manually, well that's the point of automating >99.999% of it. For the remaining someone is goi…

The level of aggressive ignorance in HN comments can be quite shocking. There is no legal requirement to use any particular payroll system. The payroll rules are written by domain experts including lawyers and others, and encoded into rules engines.

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

#346

Post by analog31 »

SonicScrub wrote: post #265
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…

That number doesn't surprise me. Your quick $1000-$2000 estimate is probably accurate for a typical office worker, but the more specialized positions skew the average. I work in mechanical/aerospace engineering for a large company. A lot of the software we use is very specialized and very costly. Here's the yearly costs from the top 4 softwares I use based on a quick google search: 1) $35,000 2) $15,000 3) $10,000 4)…

Even for a typical office worker, based on my experience at a large company, there might be 10 to 20 enterprise apps that include:

  * Tracking work hours
  * Communicating within teams
  * Entering and managing yearly performance reviews
  * Managing IT tickets
  * Catching spyware, phishing, etc.
  * Key and click logging
  * Personality and other screenings for job candidates
  * Health insurance management
  * Jira being used outside of software development
  * Database for archiving HR announcements
  * Password management for the above
In general, the prosperity of a business is a balance of assets and liabilities, and a software purchase is both, since it involves a cost. Managers promote purchases based on a variety of factors relative to the business and their own personal ambitions. There's no magic that makes managers so brilliant in the face of a salesman that they only make beneficial decisions, or that purchases are inherently beneficial, just because the product is software.

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

#347

Post by the_watcher »

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…

Do you think that Google Apps is outsourcing? Your company's CRM? The Office licenses that (at least) your finance team depends on? The payments company allowing companies to accept transactions online?

"SaaS as outsourcing" is just obviously wrong, as well as "SaaS is rent-seeking" (which seems to entirely misunderstand what "rent-seeking" means).

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

#348

Post by tialaramex »

thorwasdfasdf wrote: post #261
PopeDotNinja wrote: post #254

Earlier quoted context omitted.

> but companies wouldn't be buying them if they weren't providing more value than they cost Companies do stupid shit all the time. It only takes one person with authority to spend money to sign up for a service. Personally I've seen many software subscriptions that are complete garbage.

“We’ve seen companies buy the same subscription over and over again—even within the same department,” he added. I think that's telling

One of the worst things I've seen at an employer was more than one SSO. That's when you know the people paying your wages are truly dysfunctional. Because of course Fiefdom A doesn't want Fiefdom B's SSO to be used by their systems, that gives the person ruling Fiefdom B power - so instead get a separate SSO, what do you mean that's missing the point?

If I worked for an SSO provider I think I'd be tempted to expontentially scale corporate pricing. Want just one SSO system for (say) 10 000 employees? That'll be $5000 pa. Oh you want a second one at the same company? $20k pa please. Third one? $100k.

My reasoning would be: An outfit which buys more than one is completely irrational and so they are my best target to gouge as heavily as possible because they'll be least able to do anything about it.

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

#349

Post by Rury »

the_watcher wrote: post #347
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…

Do you think that Google Apps is outsourcing? Your company's CRM? The Office licenses that (at least) your finance team depends on? The payments company allowing companies to accept transactions online? "SaaS as outsourcing" is just obviously wrong, as well as "SaaS is rent-seeking" (which seems to entirely misunderstand what "rent-seeking" means).

Hah, you apparently don't understand what outsourcing is.

It's a simple question of make/buy. All your examples are can be either made in house, or outsourced to someone else to make for you.

For example, do we make our own ERP system in house? Or do we use a vendor's (SAP)? Do we pay another company for doing financial transactions, or do we setup our own infrastructure?

Companies that use SaaS products are outsourcing a function... Another example: Do we host our own data center, or do outsource and use a cloud SaaS like AWS?

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

#350

Post by prepend »

adjkant wrote: post #296
prostheticvamp wrote: post #285

Earlier quoted context omitted.

For whom is it not worth it? Software devs? Are they representative of the average white collar? I couldn’t live without excel.

Sheets will fit a lot of excel use cases for those not doing serious heavy lifting with it. FWIW, I'm a software engineer and our IT department actually let people opt out of Microsoft office if they weren't using it to save money, and encouraging people to use Google Docs/Sheets (as most do anyways). I'm guessing a good deal of software engineers did that but there are plenty of non-engineers that probably also did…

I am a big fan of sheets, but it is not Excel. Some of the functions are missing after all these years, not to mention charts and pivots.

I think Google gave up on trying to compete with excel on features.

Post reply on HN