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

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

#381

Post by nwallin » Fri, Mar 06, 2020, 3:35 AM UTC

throwaway5752 wrote: post #96

p_l wrote: post #53

Earlier quoted context omitted.

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.

Not sure if you are being facetious, but that's in fact the law. The board is a fiduciary of shareholder (investor) money. Is that a great idea for society? Not sure, until it changes we live in the world we live in. And on the productivity point, that makes a good theoretical case but it is just not demonstrated by historical data. In the US, in the past 50 years, it even has a name (the pay-productivity gap or the…

It's more complicated than that.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

> Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919) is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a charitable manner for the benefit of his employees or customers. It is often cited as affirming the principle of "shareholder primacy" in corporate America. At the same time, the case affirmed the business judgment rule, leaving Ford an extremely wide latitude about how to run the company.

[...]

> In the 1950s and 1960s, states rejected Dodge repeatedly, in cases including AP Smith Manufacturing Co v. Barlow or Shlensky v. Wrigley. The general legal position today is that the business judgment that directors may exercise is expansive. Management decisions will not be challenged where one can point to any rational link to benefiting the corporation as a whole.

The caveat is important. If a company says, "Customers don't like it when rich people in suits treat like shit. Therefore, if we spend a small amount of money treating better, this will make our customers happy, and they will buy more of our products, recouping the cost and bringing in more profit for our shareholders." Substitute the environment, animals, customers, employees, people in Africa, cancer patients, the children, etc. It doesn't matter if you're completely full of shit, you just have to make the argument.

So while you're correct that companies have a primary requirement to increase profits for their shareholders, in practice, this requirement is incredibly loose, to the point of not actually being a requirement at all.

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

#382

Post by Rury » Fri, Mar 06, 2020, 3:44 AM UTC

irrationalactor wrote: post #344

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 w…

I'll share my anecdote for when it wasn't.

A previous employer of mine had paid 96k a year to use a client software on a per database installation basis (12k per license, 8 database installations across the company worldwide, for a total cost of 96k/year)..

However this software was a trivial CRUD app we used for dealing with CAD files. To be clear: we completely owned and managed the back end database ourselves, and just used the app as a client interface for searching/creating CAD files (which was super slow btw).

I could've created an equivalently functional client app within a week or two, that was both faster and more scalable. Doing so would have saved the company an obvious 96k a year in recurring costs, along with increased productivity. It might have taken a while longer than a week to deploy to users, but nonetheless would have alone justified my yearly salary. Additionally it wouldn't have taken 100% of my time a year to support or maintain such a client.

However, I couldn't convince managers it was worth it to rewrite it in house, despite no new features being added to the software by the vendor for over 8 years! Frankly, I'm still not sure why that was (ignorance I'd say), but I think it said how much I was respected there... so I left.

Actually, I lied - I still work there and am in the process of finding a new job. Frankly, it's stuff like this that makes me think I should just get with the times and start my own niche SaaS company and do "Rent-Seeking" to ignorant companies such as this, since they don't understand when something is cheaper to be done in house...

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

#383

Post by sixdimensional » Fri, Mar 06, 2020, 3:44 AM UTC

rodgerd wrote: post #275

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…

Then someone gets Slack because they don't like Teams, and they think that's worth it. Someone else wants Flowdock. Your new exec used Zoom at his old job and wants everyone to have that for video calling. Your IT security team have half a dozen anti-virus tools, two data loss prevention tools, three monitoring solutions because they're overwhelmed by the amount of data coming out of them. You use a third party RAS s…

You speak the truth!

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

#384

Post by ratsmack » Fri, Mar 06, 2020, 3:47 AM UTC

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…

We used Epicore Vantage ERP for manufacturing. The starting cost per seat was $175 per user per month. With many added modules it can easily reach twice that per user. Our $30 million a year company was spending about $150K per year licencing this product, and this was only one of our software packages. I think the $10K number is reality for many companies.

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

#385

Post by ratsmack » Fri, Mar 06, 2020, 3:53 AM UTC

soapboxrocket wrote: post #353

SonicScrub wrote: post #265

Earlier quoted context omitted.

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)…

CATIA is a beast of a bill!

And the licensing is not perpetual. Once you stop paying the annual licensing, you are legally obligated to stop sing the software.

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

#386

Post by p_l » Fri, Mar 06, 2020, 3:58 AM UTC

nwallin wrote: post #381

throwaway5752 wrote: post #96

Earlier quoted context omitted.

Not sure if you are being facetious, but that's in fact the law. The board is a fiduciary of shareholder (investor) money. Is that a great idea for society? Not sure, until it changes we live in the world we live in. And on the productivity point, that makes a good theoretical case but it is just not demonstrated by historical data. In the US, in the past 50 years, it even has a name (the pay-productivity gap or the…

It's more complicated than that. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co . > Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919) is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a charitable manner for the benefit of his employees or customers. It is often cited as affirming the…

IANAL, but it doesn't read to me like a requirement to increase profits for shareholders, but requirement for "good stewardship" of the investment.

But that's beyond my knowledge on this matter :)

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

#387

Post by brentis » Fri, Mar 06, 2020, 3:59 AM UTC

jankiehodgpodge wrote: post #320

swiley wrote: post #267

Earlier quoted context omitted.

MS office is probably one of them. Office 365 isn’t worth it but most people don’t seem to know that.

Office 365 is a bit more than some office apps though, you have teams, OneDrive, planner, forms, Todo, powerapps, stream and so on... It actually replaces a whole stack of SAAS apps most companies are already shelling out for.

Shutter.. hate the msft sticky apps. They are giveaways simply to not lose market share. Can someone please make a free version of sharepoint already so I can be productive.

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

#388

Post by brentis » Fri, Mar 06, 2020, 4:02 AM UTC

kevin_thibedeau wrote: post #305

cercatrova wrote: post #268

Earlier quoted context omitted.

I like your first sentence, but unsarcastically. Companies should always strive to do more with fewer employees by automating them away. As for the rest of your argument, most people are not like you, as they will not want to spend time setting up their own mail server. For companies this is doubly true, as they will likely spend more money setting it up, maintaining it, and upgrading it, than the subscription actual…

Horizontal integration of business processes means a lot of external stakeholders have you by the balls.

This. Bunch of crappy apps which meet the minimum rqt to keep you in the ecosystem. Teams is the business equivalent of imessage. Keeps people on msft products vs. switching platforms. That plus finance folks cant not have their Excel for their 30-tab whatevers.

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

#389

Post by Serow225 » Fri, Mar 06, 2020, 4:28 AM UTC

onlyrealcuzzo wrote: post #338

leetcrew wrote: post #315

Earlier quoted context omitted.

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??

Lots of engineering software does. FPGA toolchains, CAD, simulation. Not uncommon.

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

#390

Post by ramphastidae » Fri, Mar 06, 2020, 4:30 AM UTC

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…

In addition to that, some equivalent of Gsuite, Jira, Confluence, Trello, Slack, Figma, Expensify, Github, Looker, Tripactions, Greenhouse, and Jenkins all feel like table stakes for an enterprise firm these days.