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

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

#111

Post by DoctorDabadedoo » Thu, Mar 05, 2020, 6:43 PM UTC

api wrote: post #23

People haven't figured out that "SaaS will liberate you from worrying about IT" is bullshit. All it does is change the types of problems in IT that you have to worry about.

Totally, but it gives small companies room to breath. Much easier to spend a few hundred bucks/month on a communication tool / management software / aws vm, etc. than pay the entry fee to a high cost self hosted service that might not even make sense in a few months.

Problem is that most companies consider IT (and tooling) a cost , not an asset (that needs to be taken care of, tended and re-evaluated every once in a while), then suddenly you're stuck with a midsized frankenstein blob of services that takes half your budget but is so damn complicated to untangle that it's cheaper to eat the cost. Middle management hell in one paragraph.

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

#112

Post by lapnitnelav » Thu, Mar 05, 2020, 6:44 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.

That's the exact thought that has crossed my mind a few weeks ago. I was more focused on the specific of advertising / marketing given the amount of open source solutions available nowadays.

The second benefit being that they'd own the underlying data rather than yet another tech giant. So hopefully better for privacy.

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

#113

Post by jchw » Thu, Mar 05, 2020, 6:44 PM UTC

optimiz3 wrote: post #108

xmprt wrote: post #98

Earlier quoted context omitted.

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.

I know you are trying to be snarky but Valve has accomplished a hell of a lot more than most startups ever will. They are far from perfect (hell, they’re known for bugs and their famously poor timelines, and I heard their game Artifact was not good,) but it’s pretty bizarre to suggest they do nothing. Maintaining Steam alone is huge. It’s hard to find a platform with more vigorous fanboys for good reason.

But that all aside... I mean they have a new Half Life game on the near term horizon (later this month apparently) and they have done a ton of work on VR and Linux support.

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

#114

Post by advisedwang » Thu, Mar 05, 2020, 6:44 PM UTC

And how much would it cost to get the equivalent functionality with non-saas solutions?

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

#115

Post by regularfry » Thu, Mar 05, 2020, 6:44 PM UTC

Silhouette wrote: post #68

taleodor wrote: post #21

Earlier quoted context omitted.

Exactly this. Unfortunately, way too often I see execs saying "that's too expensive, we just have to do it manually" instead of using good tool. Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month.

Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month. It's never that simple, though, is it? Suppose that tool solves a problem that a $100/hour employee would have solved manually in a day. How long did it take the employee to identify and choose the tool, arrange the purchase, and then learn to solve the problem using it?…

On the other side of that equation, what you would hope is that your $50/month is buying you a subscription to steadily increased functionality over time. That's something your $1000 up-front payment wouldn't get you, and it helps offset the initial on-boarding costs. It's also probably true that once your one employee has gone through the selection, learning, and purchasing process, getting subsequent users on-boarded is much quicker, because there's someone sat next to them to say "just do it this way".

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

#116

Post by m0zg » Thu, Mar 05, 2020, 6:46 PM UTC

Opaque billing and lack of customer oversight/clue are powerful components of this. Shit gets bought and then sits unused a lot of times. I've worked for a company about 10 years ago which got sold IBM DB2 at a cost of $2M/yr. The company had no use whatsoever for DB2, but paid for a few years of that until they hired people (me) who convinced them they don't need it. It was replaced with a MS SQL subscription which cost a "mere" $150K/yr at the time, and _was_ actually used. Some companies just have way too much money and no clue.

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

#117

Post by IggleSniggle » Thu, Mar 05, 2020, 6:47 PM UTC

Silhouette wrote: post #68

taleodor wrote: post #21

Earlier quoted context omitted.

Exactly this. Unfortunately, way too often I see execs saying "that's too expensive, we just have to do it manually" instead of using good tool. Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month.

Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month. It's never that simple, though, is it? Suppose that tool solves a problem that a $100/hour employee would have solved manually in a day. How long did it take the employee to identify and choose the tool, arrange the purchase, and then learn to solve the problem using it?…

The other gain you get from having the employee build the tool is that now the employee is better at building these tools, so you fundamentally have a better employee than the one that had to spend the time learning the non-transferable one-off tool.

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

#118

Post by planetzero » Thu, Mar 05, 2020, 6:47 PM UTC

tmpz22 wrote: post #71

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.

I don't know, did piracy kill the music industry's ownership model or was SaaS just more popular/lucrative/financially gamable? My take is that SaaS is just a more predictable business model with fewer operating complexities and easier sales funnels.

"SaaS just more popular/lucrative/financially gamable"

Piracy definitely killed the ownership model. After Napster and prolific piracy of music for 10+ years, the value of music plummeted to almost nothing.

Piracy is closer to counterfeiting than stealing, because the actual value of the pirated good approaches $0 as more and more people have the idea that they can get it for free.

This won't happen to any automotive company if you steal a car. This is why I always thought those ads about piracy/stealing were silly.

SaaS for the music industry might have happened without piracy, but piracy was definitely the catalyst for the services we see today.

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

#119

Post by dclusin » Thu, Mar 05, 2020, 6:47 PM UTC

genghisjahn wrote: post #93

papito wrote: post #41

Earlier quoted context omitted.

Because most business in the United States is done despite the management, not because of it.

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

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.

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

#120

Post by creaghpatr » Thu, Mar 05, 2020, 6:47 PM UTC

ac29 wrote: post #90

mm89 wrote: post #79

Earlier quoted context omitted.

I don't know much about jobs outside of tech, but I know most of them at the entry level to a few years of experience in accounting, finance, real estate, etc. do not pay much over $60k (if that) and pretty much all of those jobs are going to use things like Salesforce or other expensive SAAS tools and software.

Salesforce "Enterprise" is $1800/user/year [0], and presumably large enterprises are negotiating better rates than the published ones. Every single employee would need to be using five and a half packages like this at full list price to hit $10k/year.

In Sales you would have SFDC plus some kind of enablement tool like Salesloft/Outreach plus a prospecting tool like Sales Navigator or DiscoverOrg plus enterprise Gmail plus a communication tool like Zoom; and then there's the analytics stuff, the HR/finance parts, etc...10k is probably way too high an estimate but 5k is believable for a B2B startup with a scaling sales team.