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Why SaaS prices are still going up when companies are spending less

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Re: Why SaaS prices are still going up when companies are spending less

#31
Long term rug pull on CTOs who thought the cloud would somehow be better, easier & cheaper.

CTOs get lots of free credits, downsize their infra staffing.

Start using the basic building blocks, but then of the basic building blocks (servers & storage) are marked up and expensive.

Next, to find cost savings their org need to move deeper and deeper into alphabet soup of cloud vendor proprietary stack, at which point they are locked in.

Re: Why SaaS prices are still going up when companies are spending less

#32

Earlier quoted context omitted.

Presumably Google also keeps backups, though, right?

Yes they also store to tape

That means 2X at a minimum. Then RAID overhead. Possibly other hot or warm copies ready to take over instantly.

Re: Why SaaS prices are still going up when companies are spending less

#33

Earlier quoted context omitted.

Storage prices depend on the reliability you want. Someone like Google cannot ever lose data of any customer. So if you pay for 1GB of storage, they probably actually store 5GB of data or more for you. It will be redundantly stored within the datacenter across different racks, but also stored (also redundantly) in different datacenters in case of flood/fire. Theres probably a copy on tape incase of a catastrophic sof…

> So if you pay for 1GB of storage, they probably actually store 5GB of data or more for you The actual factor is most likely around 1.4-1.5x and for sure can’t be any more than 2.2x in this day and age. Dumbest possible implementation will be “only” 3x so no it’s nowhere close to 5gb Edit: looks like it’s public so i can actually tell you that google uses RS 3,2 which gives 1.5 replication factor. When i was there a…

What does RS 3,2 stand for? Thanks

Re: Why SaaS prices are still going up when companies are spending less

#34

SaaS companies are owned by billionaire-investors. or actually investor-companies. The ones at the top of the world. Same ones who get the printed dollad on their hands first to spend it before other common folks wake up to the fact that it was printed and starts loosing value I red somewhere that 80% of dollars were printed (=made up digitally) in the last 3 years. so the inflation is now coming fast, 1$ = 20$.. tha…

> 80% of dollars were printed (=made up digitally) in the last 3 years

Doesn't seem like it [0]:

> [...] so it printed about 8% of the currency. An approximately equal amount of currency was destroyed

> The reason for the sharp upturn in M1 in 2020 is that the measure was redefined in May 2020

[0] https://skeptics.stackexchange.com/a/53092

Re: Why SaaS prices are still going up when companies are spending less

#35

Long term rug pull on CTOs who thought the cloud would somehow be better, easier & cheaper. CTOs get lots of free credits, downsize their infra staffing. Start using the basic building blocks, but then of the basic building blocks (servers & storage) are marked up and expensive. Next, to find cost savings their org need to move deeper and deeper into alphabet soup of cloud vendor proprietary stack, at which point the…

Cloud is the greatest thing ever; for big tech companies.

Re: Why SaaS prices are still going up when companies are spending less

#36
post #13

It would be interesting to see what the corresponding figures are like for on-prem, although they would be much more difficult to calculate and would vary wildly between companies. The only thing that really stood out to me was the Google storage price increase, which seems rather large, as in way out of line in comparison to our 2023 spend and 2024 budgeting. It would also be nice to see what exactly is meant by Saa…

I did a detailed price cost calculation of onprem vs AWS as I worked at a MSP. Our cost of compute and storage including DC construction over 10y was about half the cost of AWS. We also used cheap supermicro and had no service contracts or warranties we had on site staff. Their salaries were included. Small DC 2mw.

Thanks for this insight. It’s a perspective I don’t have. Did you build the site? Is it performing as expected?

I know “nobody got fired for choosing AWS” but the real value seems to be in burst loads. If you have predictable, stable workloads I can see on prem or hybrid making more sense.

Re: Why SaaS prices are still going up when companies are spending less

#37
Turns out building massive workforces on top of software business that don't require them isn't good business.

The big mistake most companies made is that they applied the old-school "Fortune 500" way of company building to software businesses (i.e., bigger is better). Humorous, because the promise of software was that it reduced the need for that behavior.

The end result is that they've built companies which ironically have great margins (or at least, should), but they burn cash like they're still in their seed round. Even worse, this behavior pushes out most of the early talent which means you need ever-more people to fill in the skill gap created by hiring lower quality talent. This also creates the problem of a once-great product deteriorating into mediocrity over time which also threatens grip on market share.

Re: Why SaaS prices are still going up when companies are spending less

#38
This is complete nonsense, right? SaaS prices have nothing to do with input costs --- prices are plucked out the air (or from somewhere else...) based on some guess about what the market might bear vs aspirations for volume. Then, once the smoke clears, you jack the price up a bit in order to buy a new boat.

Re: Why SaaS prices are still going up when companies are spending less

#39

Long term rug pull on CTOs who thought the cloud would somehow be better, easier & cheaper. CTOs get lots of free credits, downsize their infra staffing. Start using the basic building blocks, but then of the basic building blocks (servers & storage) are marked up and expensive. Next, to find cost savings their org need to move deeper and deeper into alphabet soup of cloud vendor proprietary stack, at which point the…

exactly
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