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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

#71

Post by dilyevsky »

killingtime74 wrote: post #33
dilyevsky wrote: post #9

Earlier quoted context omitted.

> 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

Reed-Solomon erasure coding. 2 data blocks, one parity. Basically raid-6 but distributed

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

#72

Post by dgb23 »

I propose a new term "TDaaS": Tech Debt as a Service.

(Feel free to modify the name to something less clunky.)

A SaaS can provide a useful tradeoff. Just don't get scared by FUD marketing tactics, like "Why you shouldn't build your own X" etc. It's a tradeoff: you introduce an external dependency and give up control.

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

#73

Post by karaterobot »

> Software price hikes are driven in part by inflation. The cost of living has surged post-pandemic in most economies. Higher electricity costs, chip shortages, and rising wages all increase the cost of doing business.

Not that there hasn't been inflation, but prices have gone up much more in the last year than inflation itself has. Inflation is 3.2%, lower than the 100-year average in the U.S. It was higher a year ago, but still only about 9%. All of the price increases in that article are significantly higher than that, most are multiples of that. Even if they hadn't raised their prices for a few years prior, that still doesn't add up. I don't buy inflation as a valid excuse, though I would it as an invalid excuse they're still using because people perceive it as true.

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

#74

Post by marktangotango »

renegade-otter wrote: post #70

Companies are going through the "reduce our cloud bill NOW" exercise. They have to cut the unnecessary, wasteful infrastructure and raise prices. So, after all these years of hearing "who cares about performance and cost - just buy more engineers, CPU, and memory", gravity is once again being the bitch that it is.

The aws/gcp/azure tax is starting to bite hard. At least we have choices. IBM rode a similar gravy train for many many years.

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

#75

Post by sokoloff »

mulmen wrote: post #36
mozman wrote: post #13

Earlier quoted context omitted.

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.

So long as stable also means "unchanging" (in the sense of no new machines are being deployed). Our biggest win from AWS was never having to think about DDoS; our second biggest win was never having to wait for our Ops team (who was very good overall) to have the discussions about how to deploy new hardware, new storage, etc.

I get annoyed when a new EC2 instance takes 2 minutes to launch now. That time used to be not productive to measure in hours.

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

#76

Post by [deleted] »

killingtime74 wrote: post #33
dilyevsky wrote: post #9

Earlier quoted context omitted.

> 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

[deleted]

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

#77

Post by sokoloff »

activitypea wrote: post #15
throwawaysleep wrote: post #8

Price has little to do with cost. Price should be the maximum the market can afford while still beating ones competition.

Why? What do you mean by "the market can afford"?

Why does a bottle of water at a ballgame cost $5, at a food truck $1, and at a supermarket $0.15?

Personally, I find the ballgame price exploitive, but the food truck has added a bunch of convenience (and a few pennies of refrigeration cost) and that's worth paying $0.85 extra to a lot of people.

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

#78

Post by mooreds »

dgb23 wrote: post #72

I propose a new term "TDaaS": Tech Debt as a Service. (Feel free to modify the name to something less clunky.) A SaaS can provide a useful tradeoff. Just don't get scared by FUD marketing tactics, like "Why you shouldn't build your own X" etc. It's a tradeoff: you introduce an external dependency and give up control.

> It's a tradeoff: you introduce an external dependency and give up control.

I think this is why self-hostable solutions are becoming more common.

When a solution is self-hostable, both sides win.

The SaaS provider can operate the solution, which offers revenue. Customers like it because they can get going quickly.

Or the customer can host it. This allows them to control where the data goes and minimize costs. I like the way this tweet puts it "The real reason to buy SAAS is for someone else to do the ops work"[0].

In both cases the customer benefits from the continued development of the software (similar to how a library improving benefits all applications which depend on the library).

And the ability to self-host removes a business risk. If the SaaS vendor fails, well, we have to support it ourselves. If it is OSS or we have the code in escrow, all the better.

[0]: https://twitter.com/rickasaurus/status/1700697140492648454

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

#80

Post by zakary »

karaterobot wrote: post #73

> Software price hikes are driven in part by inflation. The cost of living has surged post-pandemic in most economies. Higher electricity costs, chip shortages, and rising wages all increase the cost of doing business. Not that there hasn't been inflation, but prices have gone up much more in the last year than inflation itself has. Inflation is 3.2%, lower than the 100-year average in the U.S. It was higher a year a…

If the published inflation rate is significantly less than the increase in price of a wide variety of goods, then doesn’t that indicate that the inflation rate isn’t being calculated correctly? My understanding is the inflation rate should generally reflect how much more expensive things are getting each year
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