[HN Gopher] Ask HN: Why is everything a SaaS product?
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Ask HN: Why is everything a SaaS product?
I understand the advantages of Saas - transparent updates, cloud
based, redundancy, subscriptions, scaling, unicorns etc. Why don't
we have more businesses following the JetBrains model specially if
the product is not a service that needs to run 24/7. I buy the
product once and use it for perpetuity. If I want updates, I pay
more. As a consumer, my data does not leave my perimeter, my data
is not sold or used for ads and I am not hooking into a
subscription that I am going to forget soon. 1) Personal photos
and videos backup and viewer. - Just give me a cheap cloud for
backup and a desktop app for viewing. 2) Personal budget - Just
give me a desktop app that connects to my different accounts and
gives me overview.
Author : kevivni
Score : 112 points
Date : 2022-09-15 18:52 UTC (4 hours ago)
| yodon wrote:
| Software is sold as SaaS for the same reason games are
| multiplayer. Both are driven by the need to stop your app from
| being pirated. The recurring revenue piece is just a side effect
| of adopting the only effective anti-piracy mechanism ever
| developed.
|
| If all the code runs on the user's laptop, it doesn't matter
| whether it's a game or a productivity app and it doesn't matter
| whether it's cheap or expensive, it will be cracked and it will
| be pirated.
|
| If a critical piece of the product runs on a server that you the
| business founder own, whether that's multiplayer lobbying or MMO
| sharding or some key part of your productivity app (like data
| storage or whatever), piracy ceases to be a crippling problem for
| your business and becomes a non-issue. You also have the
| opportunity to get a recurring revenue stream rather than a
| single payment, which is generally preferable for the business
| (and better aligned with the fact that you do now have monthly
| per-user costs because you're hosting part of the app on your
| servers).
|
| As a data point to back up the importance of piracy in the
| equation, look at the distribution of start dates for successful
| software companies. There were lots of successful software
| companies started in the 80's and early 90's, but almost no
| successful software companies were started between 1995 (when the
| first web browsers made piracy easy for the first time because
| you didn't have to physically know someone with a physical copy
| of the cracked software, you could download the crack from anyone
| anywhere) and 2006 (when Salesforce.com showed the world what the
| games industry had already figured out, which is that hosting
| part of your app on your own server is a great way to stop piracy
| and get recurring revenues).
|
| Once Salesforce.com showed the industry that "SaaS" works, all of
| a sudden people could start launching tons of profitable software
| companies again. Can you find a successful software company
| started during those dark ages of 1995-2006, of course you can,
| these are trends not absolutes. Was it far harder to be a
| software company in those dark days? Absolutely. That's why we
| have SaaS today and that's why SaaS is here to stay.
| debevv wrote:
| Has piracy really ever been a crippling problem for any
| business?
| cookiengineer wrote:
| Just read up on the famous game dev tycoon mechanism, where
| the gamedev (player) goes broke with his company due to too
| much piracy.
|
| 97% of players played the cracked game that the publisher
| seeded on purpose via piratebay and other trackers.
|
| They thousands of forum posts after this because pirates
| weren't able to realize that this was a copy protection
| mechanism.
|
| So yeah, I'd argue that piracy is a huge problem.
| coryrc wrote:
| Yes
|
| https://irdeto.com/news/game-piracy-results-in-
| over-21-milli...
| xtracto wrote:
| Mhmm, that's an anti-piracy PR blurb from an "anti-piracy"
| service selling site. Not sure it is the most unbiased
| source... I think it has been demonstrated elsewhere that 1
| pirated download does not equate to 1 lost sale.
|
| Where I live (Mexico) I know so many people that have
| pirated Adobe, Microsoft apps and plenty of games, who
| there is NO WAY they would have bought the software if they
| hadn't been able to pirate it.
| hkon wrote:
| Money
| Evan_Hellmuth wrote:
| Better business model (definitely for business owner, arguably
| for customers)
| 0xbadc0de5 wrote:
| As others have said - recurring revenue models are easier to
| structure businesses around. It makes business planning and
| employing people easier. It also makes VC funding easier because
| the books are more consistent and easier to understand.
|
| It may or may not be what best serves the customer or represent
| consumer preferences, but it is (increasingly) how things are
| done in order for a business to compete (or exist).
| smt88 wrote:
| Jetbrains can offer a perpetual license[1] in theory because old
| versions don't continue getting updates. They spend (relatively)
| little on "supporting" old versions -- mostly just the cost of
| the download servers.
|
| The two use cases you described don't work that way. Both of them
| have cloud components, which means they need frequent security
| patches, and they likely also need bug fixes and other updates.
|
| "Connects to my different accounts" by itself is a huge
| undertaking that most people outsource to Plaid or a similar
| vendor.
|
| So to answer your question: a lot (not all, but most) SaaS
| products are services because they _are_ services. They are
| updated incessantly by developers and have rolling updates.
|
| 1. https://sales.jetbrains.com/hc/en-
| gb/articles/207240845-What...
| brianwawok wrote:
| To me, the keep your old version forever was a thing Jetbrain
| did to "soften" the blow when going from buy once, use
| forever.. to buy every single month.
|
| Still, one of the most valuable softwares I pay for.
| that_guy_iain wrote:
| A lot of people really didn't like the fact they were going
| from having a perpetual license to having a subscription. The
| reality is, the way it worked out is basically the same as
| before but I could pay monthly. Since I paid for my own
| license instead of allowing an employer to buy it (so I could
| get IntelliJ for all languages instead of getting a language
| specific version) that was nicer.
| bitL wrote:
| JetBrains tried to switch to the usual subscription model when
| they got new management and due to a massive backlash they ended
| up with a gobbled subscription similar to their superior previous
| licensing model.
| that_guy_iain wrote:
| 1. Easier to manage updates. If you control the service you can
| ensure it's up to date. If everyone is using their own version
| you have to deal with bug reports for bugs that have been fixed.
|
| 2. As many point out, subscriptions are best for a business
| because it's recurring revenue and you can grow. One off sales
| makes this harder.
|
| 3. The Jetbrains model is basically subscription model now. They
| only allowed you to have perpetual license because of backlash.
| However, I liked their approach of you can have a peretual
| license for the version that was available 12-months before your
| subscription ended. It's what I'm going to be using with my
| product with a slight modification.
|
| 4. As you point out, you're likely to forget about a subscription
| therefore the company makes money while basically providing
| nothing.
|
| 5. Overall, the problem is that everyone is accepting the current
| setup and paying for subscriptions instead of buying things so
| more companies are getting in on the gig.
| kevivni wrote:
| OP here: Those are fair points.
|
| I get it from the business' perspective and also from a
| software developer's perspective.
|
| Its unfortunate that there is so little option for a consumer
| here when they are just wanting to just simplify their lives
| without sharing their personal data and/or subscribing to a
| service.
| emaginniss wrote:
| You claim that the consumer has it better with the desktop
| app, but you're ignoring the number of people who want quick
| access to their photos or finances from their mobile device,
| or from the computer at their friend's house when their
| computer dies. SaaS also implies universal access to a
| system.
| whiplash451 wrote:
| Technically speaking, you could totally imagine a SaaS
| software that does not require you sharing your data. These
| two things are fairly orthogonal.
| JohnFen wrote:
| How so? At the very least, you need to have some sort of
| payment method on file with the company.
| seydor wrote:
| I wonder why SaaS has not spilled over to other businesses, ie.
| food as a service, car as a service, fridge as a service etc. It
| exists in some cases, but it s not popular
| GuB-42 wrote:
| "Car as a service" is really popular, usually in the form of
| leasing. You can own the car at the end, but many people
| replace it with a new car after the period ends as there are
| incentives to do so.
|
| "Food as a service" is called restaurants. But even for
| groceries, this is by nature a recurring business. They don't
| need you to sign a contract, they know you will come back if
| you want to stay alive, they have loyalty cards though.
|
| I never heard of "fridge as a service", or any home appliance
| for that matter. But it was popular for a times with phones:
| subsidized phones are essentially that. You pay your phone with
| your subscription, and after some time (often 2 years), you get
| a new phone, you got to keep the old one though.
|
| The new thing is recorded entertainment. Streaming services
| have took over music and video. Video games are a mixed bag,
| but we are starting to see "all games" subscriptions. Books are
| stubbornly sold on a "per item, keep forever" basis for some
| reason though, even on Kindle, which is ironic since "books as
| a service" have been a thing since the early days of
| civilization, in the form of libraries.
|
| Thinking of it "buy once, keep forever" is not that common. I
| just took a look at my bank account and most of my payments are
| services and/or recurring: utilities, gas, groceries (most of
| it made up of repeat purchases), subscriptions, taxes,... And
| usually, when I can buy something forever, I take that option,
| and I pay cash.
| sbuk wrote:
| Food as a service?
|
| hellofresh.com
|
| Car as a service?
|
| zipcar.com
| jabroni_salad wrote:
| you just described Rent-a-center, and they've been around for
| awhile.
| HeyLaughingBoy wrote:
| Well, you can rent appliances and cars and there are services
| that will cook and deliver food for you for a monthly fee.
|
| So yeah. All those things are available on-demand or as
| recurring service.
| MangoCoffee wrote:
| SaaS business model is nothing new. it just another form of
| contract.
|
| my employer is in utility management/service. they sign yearly
| contract with city and MUDs.
|
| i don't see the difference between monthly fee (contract) and
| yearly/multiple years.
| didibus wrote:
| It has.
|
| I'm subscribed to a weekly milk and veggie delivery.
|
| Car leases for rentals has been a thing for decades.
|
| Ok I can't think of fridge as a service... But what about
| extended warranty plans and servicing?
| Bilal_io wrote:
| I think you're looking at it backwards, other stuff as a
| service is the OG, and SaaS is the relatively new thing.
|
| Food as a Service: Restaurants, Cafes, Uber eats, Door dash,
| and other services that rich people use where they order food
| to be made and delivered by a private kitchen (not an open
| restaurant)
|
| Car as a Service: Taxis, Yellow Cab, Uber, Lyft, car rentals,
| and car leasing
|
| Fridge as a Service: there are stores that would rent you a
| fridge, it's not as common, as most rental places come with
| fridges, but I've seen many in Houston without. I've also seen
| Laundry machine and Dryer rentals
|
| [Anything] as a Service: they exist, but not common or unknown
| to people like you and me. For example there are dog walking
| services. Another one that appeared in the past decade is
| related to clothing where you get a box every month that
| contains some clothing articles, or others that would assign a
| personal stylist to help you shop for clothes... Etc
| seydor wrote:
| car leasing is a subscription payment, everything else isn't
| Bilal_io wrote:
| Not sure I agree. They're services. Uber is a car as a
| service. You don't pay monthly, but you use it as a
| service.
|
| I don't pay a subscription for Gmail or their productivity
| suite, but those are SaaS.
| [deleted]
| seydor wrote:
| I mean saas as subscription, i don't think it's
| applicable otherwise. E.g. hotels are not a service as
| are not airplanes. Neither is uber, you buy itemized
| rides from individual riders, the fact that uber mediates
| it doesnt make it a xaas. Otherwise, every grocery store
| would be a xaas
| umeshunni wrote:
| Housing as a service has been around for 1000s of years
| seydor wrote:
| Yeah that is very old. i am wondering, if XaaS was so
| successful for software, why havent we seen other kinds of
| products turning to subscription-based. Some companies are
| trying to make car seats-as-a-service but that s just
| ridiculous
| 7speter wrote:
| Isnt bmw offering monthly subscriptions for extra car options?
| candiddevmike wrote:
| As someone who built a SaaS for your 2nd use case (Homechart:
| https://homechart.app, lifetime license available!), the real
| reason is any kind of software that integrates with other things
| has an ongoing maintenance cost that needs to be paid by all of
| the users to keep it working. Like connecting to your bank
| accounts, that's not a one and done thing typically.
| streetcat1 wrote:
| Jet brain moved to subscription first.
|
| The reason is that you do not want to start over each month sales
| wise.
|
| Again, as a consumer you can "consume" what is offered in the
| market.
|
| I.e. if you have an option to not buy, the seller has the option
| to maximize its profit.
| JohnFen wrote:
| > Jet brain moved to subscription first.
|
| This is why I stopped using their software.
| userbinator wrote:
| "You will own nothing, and be happy."
|
| I don't know about the second part, but they sure are trying to
| push the first. As many others here have noted, the reason is
| money, or more precisely, greed and control.
| philippejara wrote:
| Because people pay for it and companies like money, it's a bit of
| a dismissive answer but it's just what it is really.
| skadamat wrote:
| 1. Recurring Revenue
|
| In some sense, every business dreams of wanting to be a recurring
| revenue business.
|
| - Gyms want you to pay monthly, and discount annual plans (and
| sometimes discount again if you try to cancel your annual plan)
|
| - Restaurants want you to come frequently, 6th time is a free
| sandwich or coffee
|
| - Bars want you to come to happy hour, at the same time, every
| day
|
| - Content creators often have a daily, weekly, biweekly, or
| monthly cadence
|
| SaaS is all about recurring revenue. In theory, SaaS aligns
| incentives because you can quit once the product or service
| deviates from your expectations or no longer serves your needs.
| Of course, in practice, SaaS companies want to keep the monthly /
| annual drip coming and may make it hard to export your data or
| switch providers. Local first software could be one antidote to
| this (https://www.inkandswitch.com/local-first/) and perhaps
| there are others.
|
| 2. SaaS loosely resembles old-school semiconductor VC investing
|
| SaaS is similar to old-school tech VC investing because the
| marginal cost is low but the upfront cost is somewhat high /
| fixed. A lot of investment houses think in terms of recurring
| revenue as well (e.g. your mortgage is a monthly payment). So if
| you want external funding, show a premise of recurring revenue!
| c-linkage wrote:
| You are correct, but I also hate that "recurring revenue" is
| the right answer.
|
| Not only does a subscription fee act as a constant resource
| drain (as opposed to a one-time charge) but it further pushes
| society into the zone of "you won't own anything and like it".
|
| Human life and the ability to interact with others and our
| environment should not be reserved to those that can sustain a
| high velocity of money.
|
| Focusing on a consistent cash flow makes financial management
| easy but makes everything else suck. It optimizes for the wrong
| metric.
|
| UPDATE: You can also look at subscription fees as a tax on
| productivity. If I pay once for Adobe software I can amortize
| that over the entire time I use it, and eventually the monthly
| cost will reach nearly zero. With a subscription fee I can
| never amortize the software, meaning the fee is effectively a
| tax. And if I stop paying the fee I completely lose my ability
| to use the product.
| WA wrote:
| On the other hand, you can regard one-time fees as
| subscriptions in disguise, because hardly any useful software
| can be used forever. File formats change, collaboration
| changes, operating systems change.
|
| Yeah you could run your bought-once MS-DOS accounting
| software in a VM forever, but most useful software has a
| clear expiration date, especially if you try to collaborate
| on data.
| everforward wrote:
| Subscriptions are almost definitely more profitable.
|
| E.g. Photoshop is now $240/year. The last price I could
| find for a version you could actually buy was $500.
| Assuming someone uses it for 4 years (which might be short,
| the few people I know who use PS latch onto a version for
| forever), it would be ~$1,000 for a license.
|
| A lot of stuff would be fine for about a decade. That would
| be ~$2,500 for comparable income.
|
| Subscriptions tend to be dramatically more expensive than
| buying software was. $5/month over a decade is $600. A lot
| of stuff wants to charge $5/month for something I wouldn't
| pay $600 to own for a decade.
| jimmygrapes wrote:
| I understand this perspective and sometimes I want to agree
| with it, but it requires some kind of
| competition/innovation/refinement process to exist. One
| time purchases means the provider needs to entice you to
| upgrade one way or the other - compatibility with new
| formats and paradigms, better X, something. Subscriptions
| don't have that incentive once they're relatively
| entrenched as de facto standards. Granted, one time
| purchases also suffer from hubris at that stage (see
| unnecessary UX changes to Photoshop, Windows, etc.) but
| it's more obvious with SaaS due to the sunk cost fallacy.
| josephg wrote:
| Even knowing that, I much prefer software I buy and own
| forever. I have too many subscriptions already and I feel
| icky knowing there's all these leeches draining money
| automatically from my bank account every month, with not
| enough visibility.
|
| A few weeks ago I was looking at iPad apps to help me learn
| piano. They all want a $15/month subscription or something,
| and I hate it. I know what I'm like - I'll subscribe then
| forget and end up spending $100 for an app I use twice. I
| ended up getting an in person music teacher instead. It's
| more expensive, but it feels better spending the money like
| that.
|
| Software I buy then own (or even, pay for once a year for
| updates like Jetbrains) feels better because each renewal
| feels like an active, conscious choice.
| birdman3131 wrote:
| I have a file manager for my phone. (File commander) They
| have a pro version that I would gladly pay for but the
| only way to get it is as a monthly subscription. So I
| just don't buy it.
| layer8 wrote:
| I would guess that in many cases, you could use it longer
| than the SaaS would exist.
| NotYourLawyer wrote:
| It also puts the burden on the user to remember to cancel
| things. If I stop using my bike, it just sits in my garage.
| If I stop using the gym, I keep paying for it until I jump
| through their hoops and cancel my membership.
| didgetmaster wrote:
| I actually don't mind subscriptions if they are structured
| correctly. If I had the choice of buying a software package
| that I could expect to be useful for 5 years (even good
| software becomes out-of-date over time) for $100 or paying a
| $20 yearly subscription; I would rather have the
| subscription.
|
| The problem is that most vendors want you to pay about half
| of what a package would normally cost for a perpetual license
| on a yearly basis. Anything over 2 years becomes more
| expensive.
| tryptophan wrote:
| Yeah this. I don't mind SaaS in theory. In practice it is
| just a more expensive and invasive way of a way to get your
| software.
|
| Too many apps think 10$/mo is reasonable. Thats 120$ a
| year. Absurd.
| asdff wrote:
| You would think lump sum is better. Monetizing sooner means you
| can put that money into other investments sooner that will
| generate greater return for you overall than having it dripped
| out to you at a fixed schedule.
| xboxnolifes wrote:
| In the perfect world where every monthly subscriber would be
| willing to pay 20-100 times (or more) the amount for a one-
| time, up-front purchase, sure. But that's not reality.
| sofixa wrote:
| No, because the lump sum can't be depended upon, it's
| unpredictable. Will you have 50 buyers this month or none at
| all because it's holiday season? Or maybe you'll saturate
| your market niche. You can't plan anything ahead.
| asdff wrote:
| You can say the same for whether or not you will net a
| subscriber next month or have cancellations. What I'm
| saying is that if your license is priced correctly, that
| revenue the consumer pays up front can go into a fund that
| exists to perpetually support this software indpendent of
| having to maintain an appeased subscriber base in
| perpetuity. It's this idea of having a growing pile of
| money that exist because of what already happened, versus
| having constant revenue that must continue to be depended
| upon indefinitely.
| lotsofpulp wrote:
| > In some sense, every business dreams of wanting to be a
| recurring revenue business.
|
| As do individuals. The only thing preventing it before was the
| expense in enforcing licensing terms. Today's software and
| cloud hosting makes that much more trivial.
| phkahler wrote:
| Repeat business at your local pub is recurring revenue. SaaS is
| just collecting rent.
| intelVISA wrote:
| SaaS is also quite easy to churn out as a lone SWE, think most
| of us prefer to make our own income than toil on legacy CRUD
| apps all day.
| ineptech wrote:
| Imagine a world in which most middle-class families have a cloud
| VM where they run server-side stuff (Mom's blog, Junior's
| minecraft server, etc), and when a software vendor sells you
| software with a client/server model, it's normal for them to
| deliver the server component as a container to run on your
| server.
|
| That's the world in which you can buy the software you described
| without SaaS. As long as the vendor is running the server side,
| you're paying by the month.
| PaulWaldman wrote:
| I won't elaborate on the very real pessimistic comments because
| those are addressed from others.
|
| What I haven't seen mentioned are scenarios with non-technical
| customers. In the extreme use case of resource intensive software
| with completely non-technical customers, who is going to man the
| ship? It's like selling someone a car who is incapable of
| driving.
|
| Even if you provide an on-prem system turn-key, who is going to
| manage and maintain the system? Yes, you can sell perpetual
| licenses with support agreements, but the delimitation of
| responsibilities will be difficult for non-technical customers to
| understand.
|
| SaaS essentially allows customers to outsource their IT
| operations.
| whizzter wrote:
| Exactly, as much as we love open source in many ways it's also
| kind-of destroyed the mid-segment of fixed-software sales(the
| dBase, Lightwaves, Turbo Pascals,etc) and we really need a way
| to find back to it.
|
| Because not only is people not gaining income from their work
| (even if for example the Blender foundation exists.. how many
| people can live off it?) but we're also straining a lot of open
| source developers with support that really needs to be paid-for
| in some fashion.
|
| I don't fault Stallman in this instance(not a fan in general),
| the GPL always allowed re-sales and I think he did see
| something akin to the shareware world even with free software,
| but what happened was the combination with the Internets
| ubiquity made everyone just jump to the source (kind of
| rightfully due to bad shenanigans by middlemen actors like
| SourceForge or worse) leaving potential supporting middlemen
| screwed.
| mjevans wrote:
| Stallman would probably be happy with the idea of paying an
| expert who used open tools. It's no different from taking a
| bus, or hiring a taxi if you don't know how to drive.
|
| My impression is that the key aspect revolves around freedom
| to participate in society. In theory anyone can run their own
| email, irc, matrix, etc servers. Anyone is free to use an off
| the shelf open source product, a paid product, or even write
| their own if there is need.
| themoonisachees wrote:
| Ms exchange and aws, azure come to mind. The cost of paying $10
| closeparen wrote:
| There's a deep and rich ecosystem of IT consultancies that
| sell, operate and maintain shrink-wrapped software and
| appliances from the likes of Microsoft, Cisco, VMWare, Citrix.
| These consultancies sell "SaaS" in the form of, like, we'll
| have a technician drive to your site, get the keys to the
| server closet, and spend N hours checking on and maintaining
| things every month. You can make a living as the SQL Server guy
| for Duluth or the Cisco phones guy for Milwaukee.
|
| It's hilariously inefficient compared to cloud/SaaS, and no
| surprise that cloud and SaaS are eating this world's lunch.
| theonemind wrote:
| I really dislike the subscription model and avoid it wherever I
| can. It serves the software publisher at the expense of the user.
| If I can't license your product, I'll pay by usage of resources
| or usage of minutes or hours. I won't pay for _access_. I will
| pay to _use_ the product.
| joewadcan wrote:
| People have already mentioned all the technical aspects, or
| blamed capitalism... but I really think it's just the best fit
| for the benefits that software delivers. It provides lower
| barriers to try for consumers and higher long term rewards for
| the company that builds the software. You can certainly find
| companies that have a flat rate or fixed price, but the incentive
| to build those projects from the beginning is usually outcompeted
| by the incentive to build a subscription product.
| JohnFen wrote:
| > I really think it's just the best fit for the benefits that
| software delivers.
|
| How so? The only "benefit" you cite for the user is lower cost
| of entry, but the total cost of using the software over time is
| higher, so that's not a clear benefit.
|
| From a user's point of view, SaaS does have some other
| benefits, certainly, but it also comes with some rather large
| drawbacks. So it seems to me that, on the whole, it all just
| adds up to software costing more.
| 0xbadcafebee wrote:
| Besides the recurring revenue, SaaS is also a lock-in device, you
| can surveil your users to find new ways to make money off 'em,
| and many people are more apt to pay $10/month because they figure
| they can cancel it at any time. All of this is more attractive to
| venture capitalists than the JetBrains model.
| jrockway wrote:
| Providing software for users to host themselves is quite
| difficult. We do it at Pachyderm. Our software is basically data
| version control where you can incrementally process data as it's
| added (or your code changes). This is much more business-y than
| the use cases you list, but I can describe why it's tough even
| when your customers are compute platform teams.
|
| Pachyderm started off as a self-hosted offering, but we did try
| doing a fully-managed hosted solution, because it would be super
| easy for users to get started. You write some automation to make
| a perfect install in your preferred cloud environment, and then
| users click a button and have a perfectly configured, monitored,
| and backed up environment. If there's a problem, customer support
| can go play with the underlying resources (always with explicit
| user consent, of course; we were super strict about this), and
| that means that users get a solution instead of a fun debugging
| problem. Less surface for them to configure, less chance for
| configuration problems. Ultimately, this turned out to be
| unappealing to users, for many of the reasons that you list.
| People want to own their own data and not have to trust even the
| nicest and most competent people with it. For that reason, we
| doubled down on the self-hosted option.
|
| There are many pain points with self-hosting. From the start,
| it's difficult to offer something like a free trial. We'll give
| you the software for free (hey, it's open source), but you're on
| your own to find a computer to run it on. You'll need to setup
| DNS. You'll need to get a TLS certificate. For our software,
| you'll need to run Kubernetes. Before you can even see what value
| we offer, you have to do a lot of grunt work. What this means is
| pretty long sales cycles (while we assist you in navigating all
| those requests through your organization), and a dropoff among
| people that just want to have their problem solved today. (You
| can see this yourself. I bet you'll click any link on HN that
| sounds interesting. But if I just said "download and run this
| .exe", you'd probably be quite scared, and it would take some
| convincing. And rightfully so! That's the difference between SaaS
| and self-hosted, at the earliest possible phase, "do I even want
| this thing they make?")
|
| From a technical standpoint, the amount of work you have to do
| increases dramatically. We have to write code to talk to every
| variant of object storage. We have to provide configuration
| documentation and advice for 3+ cloud providers. (For example, we
| used to depend on etcd pretty heavily. etcd's performance is very
| heavily dependent on disk iops, and the standard storage classes
| in your average cloud provider's are woefully inadequate. So we
| have to get people's data from the inadequate storage to one that
| is fast enough, and that's just a lot of work.) We have to
| support customers' internal security initiatives. If you thought
| keeping up with changes to one cloud provider for one instance of
| your application was a lot of tedium, multiply that by 3 cloud
| providers, by ARM and AMD64, by 6 ingress controllers, by 5
| Kubernetes versions, by Local SSD, networked SSD, spinning rust,
| by corporate-mandated HTTP proxies, etc. It is a ton of extra
| work to make software that fits the customer's environment over
| just making your own environment that is perfect for your
| software.
|
| Users dictate the upgrade cycle, not software engineers. I have
| worked on teams where every commit to master just gets deployed
| to production within 5 minutes. It's awesome. All you can do when
| you self-host is to make available another version; if users want
| it, they will upgrade it. Upgrades are always risky, especially
| when you wait a long time. So every release has to provide value
| worth the risk, or the same bug from 2 years ago will be reported
| again and again. Because of the risk, we have to maintain stable
| and testing release channels. Customers that want to try a new
| feature in their dev environment can get a nightly build with the
| latest features, but we still have to maintain a stable branch
| for customers that are happy with the featureset and just need
| security and bug fixes. We have to do work to lower their ops
| risk. This is honestly twice as much work as just pushing master
| to prod every so often. Backports cleanly apply most of the time,
| but when they don't, you're just implementing the same fix
| against slightly different code. It's work. (I'm a "if the tests
| pass, there are no known bugs in the code" kind of guy, so I've
| never been worried about deploying master to production.
| Obviously, some care in your software engineering is required and
| this doesn't work for many people, but it does work for me with a
| very good track record of uptime. None of that matters when you
| self-host, nobody would simply trust my assurance that the new
| version is good to upgrade to.)
|
| Even ignoring all of that, it's quite the change in how you as a
| software engineer operate. You can't reach out and touch the
| system, ever. You ship a build artifact, suggest that the
| customer install it, and wait for their feedback. If you need
| certain information to show health/non-health, you have to make
| that understandable to the operator (who is often different from
| the user, who has other health concerns). If you need to be able
| to debug something, you need to add code to your app to do
| everything that you would think of doing if you were debugging a
| live environment, and make the results understandable to the
| user.
|
| The tooling around this is pretty much the wild west. I recently
| investigated using Bazel to build our software, because we have
| three parts that are pretty much completely coupled to each other
| bidirectionally; Go, Typescript, and Python. There just isn't
| tooling around all of our requirements (we support both AMD64 and
| ARM deployments, as customers like those cheap ARM instances and
| developers like M1s without binfmt_misc hacks), because big tech
| companies that make these tools have the liberty to dictate their
| requirements. As a result, we spend a lot of time hacking
| together tools that meet our customers' requirements, but as a
| startup, don't have the resources to build something perfect, so
| developer experience honestly isn't as nice as, say, writing an
| internal app at Google.
|
| Finally, the hiring situation is complicated. Pretty much nobody
| is building software that users deploy themselves, so it takes a
| certain rare type of developer to be productive in this
| environment. Your code has to show its work; operators that
| didn't write the code will be running it in production, and your
| software has to lead them to a solution to their problems. (Even
| things like "my job ran out of memory" are hard to detect and
| convey to users and operators.) You can't just push a fix you
| think will work to prod to see if it fixes things; you have to
| reproduce the customer issue in your own environment and fully
| test it before your code goes into a release. It's slow going,
| and care is of the utmost importance. Code review has to be
| thorough; you need to understand your customers environment and
| ensure that a fix for one doesn't break some other. (Yes, we have
| tests for this sort of thing, but great care is the last line of
| defense against regressions.) It's not just software engineers;
| marketing types always want to run A/B tests, and customers don't
| want to be subjected to this sort of thing. We have to make the
| right decision in advance, we can't give 10% of users an
| experiment and see if they rage-unsubscribe over the change.
|
| All in all, it's a very different world. If you feel like your
| job isn't hard enough just running one instance of your software
| in an environment you control, selling your software for self-
| hosting is the job for you. It's hard. It's a slog. But, it's
| great for your users.
| d_t_w wrote:
| We have modelled our company/product specifically on JetBrains.
| We're also bootstrapped, self-funded, etc.
|
| We build a tool for Apache Kafka (https://kpow.io), it's not a
| SaaS product, it's a single docker container or JAR that runs in
| air-gapped environments, our users install it in their own
| network and it just runs. That's what we thought engineers
| wanted, and tbh it turns out we were right in plenty of cases.
|
| Our licensing is an annual subscription however - but then again
| so is JetBrains (well at least for the Intellij product that I
| happily pay ~$150 a year for).
|
| I think for us the recurring revenue is really important, we
| wouldn't be able to sell you a perpetual license as we have
| commercial costs that are ongoing and related to maintaining the
| quality of the product. Not only is it better for us
| commercially, but also we have only had one customer in the last
| three years request a perpetual license, and we we explained we
| don't offer that model they bought a subscription.
|
| So I completely agree on the non-SaaS JetBrains model, and I love
| that you mentioned that company. We often get asked about
| Confluent in our area of expertise but quite honestly from day 1
| in 2018 we've been aiming to be the JetBrains of distributed
| systems. We even followed their dark branding style.
|
| Edit: Just to add one more bit of context now I think of it.
| Don't underestimate the power of the hive-mind.
|
| We have spent four years building a boostrapped non-SaaS product.
| We spend all our time talking to customers, shipping features,
| squashing bugs - living the dream basically. That's a really rare
| path to follow this decade.
|
| We've also had four years of often well-meaning people trying to
| intro us to low-information 'startup investors' or god-forbid
| another startup 'accelerator'. We stopped talking to all of them
| about two years ago, but for a while there we got told repeatedly
| to build a SaaS product.
|
| And the single worst piece of advice I've ever received which
| nearly made me puke, when we were in year one of our product and
| already had a reasonable number of users / clusters:
|
| "Just grab all their information and stick it in an S3 bucket,
| that information is what everyone wants! Number of clusters,
| users, version, etc - you can sell that!"
|
| Some people just don't understand that you can sell a tool that
| does something valuable without making your customer base some
| side product that you sell on the open market.
|
| It has been hard at times when we see startups raise tens of
| millions, but we're now in a position where we are miles out in
| front of the pack, have a rock-solid product, a great roadmap yet
| to go, and s stack of great customers who we respect. At no point
| would someone else's cash or terrible advice have left us in a
| better position - though we might have ended up with a SaaS
| product instead..
| ss48 wrote:
| In many cases, it's easier to support. You control the hardware
| serving the application to your users. You have access to more
| information for troubleshooting issues your user may have. You
| can better predict how many paying users you will have and be
| able to allocate support staff more effectively. You can ensure
| more of your users are on the latest version of the application.
| CharlesW wrote:
| Because businesses with a recurring revenue/subscription model
| are valued far higher than comparable "buy" businesses.
|
| _And of course, the more guaranteed revenue you can demonstrate,
| the more valuable your business is going to be for potential
| acquirers. "Because a high percentage of the revenue of a
| subscription-based business is recurring, its value will be up
| to_ eight times that of a comparable business _with very little
| recurring revenue," claims Warillow._
|
| https://www.techradar.com/news/how-recurring-revenue-can-inc...
| karatinversion wrote:
| My pet theory is that the rise of SaaS in the 2010s is largely
| a function of the low prevailing interest rates. Standard
| pricing says that if interest rates are 0.5%, an annual
| recurring payment of $100 is worth $20,000; but if interest
| rates are 5%, like in the 90's, it is only worth $2,000. With
| the fed increasing rates, maybe we'll see a return to pay-once
| software?
| benlumen wrote:
| Are you saying that because for the SaaS company, $100 in
| income can service $20,000 in debt?
| autoexec wrote:
| Money and power. It lets companies squeeze more cash out of their
| customers over time and it lets them make whatever changes they
| want to something people have already paid for, leaves the door
| open for things like continuously collecting their user's
| personal data, and can help make it more difficult for users to
| migrate away from their product.
|
| It's terrible for users who value their money, security, and
| privacy, but vastly more profitable for companies so most
| companies will offer it increasingly leaving users with fewer
| options for anything else.
| [deleted]
| tchock23 wrote:
| I have a software product that began with a traditional SaaS
| model before I realized that usage was project-driven/sporadic
| and it was better for the customer to do a pay-as-you-go model
| with no subscriptions.
|
| What happened after I made the switch away from subscriptions?
|
| I received a bunch of support questions asking for the
| subscription options back. People were truly confused/upset that
| hosted software wasn't being sold on a monthly or annual
| subscription basis - even though per-project was more flexible
| and cheaper for them.
|
| My takeaway is that - for better or worse - the SaaS subscription
| model is just so expected among buyers these days that to defy
| those expectations is just going to shoot yourself in the foot.
| heavyset_go wrote:
| Subscriptions are the ultimate rent-seeking business model for
| software and online services.
|
| When you need to increase profits to justify insane valuations,
| eventually you need to start wringing your customers dry.
| falcolas wrote:
| See: Adobe Cloud
|
| I cant think of a more exploitative "SAAS" off hand.
| llanowarelves wrote:
| They buy good software and then neglect them until they fall
| into disrepair or kill them off. Extracting rents the whole
| way.
|
| Slumlords of software.
| CharlesW wrote:
| BTW, subscriptions/recurring charges aren't "rent seeking" per
| se.
|
| https://www.investopedia.com/terms/r/rentseeking.asp
| JohnFen wrote:
| As I read the article you link to, the vast majority of SaaS
| appears to qualify as rent-seeking. The exceptions would by
| the things that can only usefully operate "as a service". But
| that's a minority of the SaaS offerings.
| JohnFen wrote:
| Everything is SaaS because rent-seeking is hugely in fashion.
| Companies want you to pay them on an ongoing basis.
| phpthrowaway99 wrote:
| If people actually looked at what they were paying for MS Office
| over a decade they'd wonder wtf they were doing.
|
| Small numbers are easier to sell. Before a company spends $20k on
| a PM tool, they would discuss it to death. But signing up for
| $299 a month and giving it a shot is easier.
| ozim wrote:
| To add to "they would discuss it to death" - yeah now imagine
| you need to start a company and you have to shell out $300k up
| front for multiple software licenses.
| btbuildem wrote:
| The questions feels directed more towards B2C, but let me share a
| B2B take:
|
| From a business perspective, a SaaS solution can be a ramp to
| platform lock-in. Once your customers have committed, and your
| software is part of their business workflows, it's expensive to
| move away from it.
|
| Another reason is that (for sufficiently complex solutions) the
| software portion is just part of the service - the business can
| also offer consulting services for onboarding / migration and
| customization. That's an entire new revenue stream.
| dugmartin wrote:
| For your two specific product questions:
|
| > 1) Personal photos and videos backup and viewer. - Just give me
| a cheap cloud for backup and a desktop app for viewing.
|
| It sounds like you want a one time purchase for backup that lasts
| forever? I'm not sure who is going to rationally offer that
| service as there are ongoing costs.
|
| > 2) Personal budget - Just give me a desktop app that connects
| to my different accounts and gives me overview.
|
| At least in the US that means you have to directly work with
| banks (ala Quicken), use a third party service (like Plaid) or
| maintain your own scraping system that perpetually breaks and/or
| violates the bank TOS. Any of those options is going to cost the
| software provider ongoing costs. Again nobody is going to take a
| one time payment and be liable for ongoing costs.
|
| I do think there is money to be made in the right industry for
| desktop apps that charge a decent amount ($100 and up) and offer
| 1 year of updates and then perpetual use with the final updated
| version for that year of use. This incentivizes the developer to
| maintain security updates and make feature additions so users are
| willing (but not required) to pay again in the future.
| Garlef wrote:
| Delivering the software is much easier:
|
| * Do you want to build it for mac? And windows? And linux desktop
| (lol)?
|
| And from the clients side, it's also easier:
|
| * You just need to open your browser you're good to go.
|
| * No need to install updates. Just imagine what kind of hassle
| rolling out updates for desktop software is in a company with
| more than a few employees. This used to be a dedicated job.
|
| And feature wise, it's also better:
|
| * Compare working with google sheets to excel files being sent
| around as email attachments.
| slt2021 wrote:
| 1. everything is mobile: people consume software from phones,
| tablets, personal laptops, work laptops, desktops, corporate
| servers. How do you imagine yourself installing your software 5-6
| times for a single customer???
|
| 2. now imagine updating your software with new release/bug fix.
| royal pain. these two factors are enough to choose saas
| fdr wrote:
| Personally, I find it a lot easier to address bugs on the
| producer side of SaaS. Back in the Bad Old Days where I worked on
| a proprietary database delivered to a customer to run on their
| servers with general-purpose staff, getting high quality bug
| reports and working our way to resolution was a major issue, and
| a very expensive part of the development process.
| mfer wrote:
| There are a few reasons:
|
| 1. Higher total revenues. If you compare the subscription fee
| with the sale fee and how often sales happen.
|
| 2. More predictable revenue. There are many reasons people want
| that.
|
| 3. The more information (metadata/telemetry) they have on you the
| more they can use that for something else. That could be details
| on how you use the app. If they host your photos they may use
| those photos to train an AI. Things like that.
|
| 4. Finding and tracking unlicensed users is easier to stop and
| manage. Everything is tied to a SaaS. Less stealing software
| which cuts into revenue.
|
| There are other reasons, too.
|
| In a capitalistic society where the goal is constant revenue
| growth, SaaS provides a means to do that more effectively. Look
| at the goals.
| stingraycharles wrote:
| I'd also add: it's easier to operate and iterate.
|
| If you have a thousand different installs that you need to
| provide support for, that makes for a very challenging support
| and maintenance responsibility. People need to be able to
| operate the software themselves, and may not upgrade when you
| want them to.
|
| SaaS on the other hand means you, the vendor, are in full
| control. Sure, it means you need to be able to scale it, but
| you and only you completely own the infrastructure, which makes
| things so much simpler.
| moomoo11 wrote:
| It's a model that makes money printer go brrrrr
|
| Most customers like it, it keeps the company able to push newer
| features and maybe up sell them.
| pryelluw wrote:
| Rent seeking behavior is being adapted into all products with the
| goal of replacing ownership with controlled access. Once people
| use your service they are likely to be locked in and stay
| rvz wrote:
| They slap anything they can find with a subscription because it
| is an easy way for them to rent seek and grift as much as they
| can.
|
| They don't want to admit that they are part of the griftopia that
| they are creating; especially building a SaSS on-top of something
| that does not need to be a SaSS or that can be done for free.
| pier25 wrote:
| Because having a constant cash flow fits better the model of a
| software company since you need to keep a dev team in perpetuity.
|
| You can't hire devs per project like in construction. Developing
| commercial software requires maintenance, knowing the codebase,
| etc.
| postalrat wrote:
| The difference is software companies hire programmers while
| companies that sell physical goods hire engineers. Engineers
| work hard to get it right the first time while programmers are
| constantly fixing their mistakes.
| candiddevmike wrote:
| This is a dumb take, product recalls happen all the time if
| the issue is bad enough, otherwise everything else flies
| under the radar. All physical goods eventually need upkeep,
| too.
| [deleted]
| conductr wrote:
| Are they fixing mistakes or constantly adapting to
| new/expanding requirements?
|
| Try adding an extra bedroom or 3 mid-construction on a house
| that had perfectly designed plans. One might be doable, seem
| easy even but 3 might require a new foundation or something
| to carry the load (scale).
|
| What if the ask is to pivot to a commercial property. Now you
| have to physically move it to piece of land that is zoned
| appropriately. Or maybe just tear it down and start over
| (refactor).
|
| Those aren't mistakes, they just weren't planned when
| construction began yet have insane implications to the
| builders. Planning and expanding software never ends like it
| would when you complete a tangible finished good.
| JohnFen wrote:
| > Are they fixing mistakes or constantly adapting to
| new/expanding requirements?
|
| Fixing their mistakes. Constantly adapting to new/expanding
| requirements doesn't require SaaS.
|
| But the way it's worked out is that SaaS lowers production
| costs because code can be shipped fast -- with minimal
| testing and before there's any real reason to have
| confidence in it -- on the theory that you can just push
| out updates later for any bugs that customers find too
| annoying.
| pier25 wrote:
| It's a bit of everything. Sure there are mistakes, but
| OTOH the complexity also grows exponentially.
|
| And it's literally impossible to make software without
| mistakes. Doesn't matter how much money you throw at it.
| JohnFen wrote:
| True. However, companies used to engage in comprehensive
| testing before release. SaaS removes the need to do that,
| saving a lot of money in exchange for a lower-quality
| product.
| conductr wrote:
| Non-SaaS still exists. Why does my OS update every week?
| zihotki wrote:
| You probably don't understand how either of them work. Do you
| remember for how long Apple was trying to fix problems with
| their butterfly keyboards?
| [deleted]
| Jolter wrote:
| I'm not saying you're wrong, but you can absolutely hire devs
| per project. My employer has done it many times. I was in a
| project that scaled up from 10 scrum teams up to 120 over a
| year and a half, and then once the product was launched, down
| to ~25 teams again for the maintenance part of the product
| cycle. This would have been impossible without contractors.
|
| That said, your first argument is sound.
| pier25 wrote:
| > I'm not saying you're wrong, but you can absolutely hire
| devs per project
|
| You're right of course. I should have written a more nuanced
| comment that I had time for :)
|
| My point was only that in other types of businesses it's
| possible and common to hire the whole team per project or
| season.
| macspoofing wrote:
| >I understand the advantages of Saas - transparent updates, cloud
| based, redundancy, subscriptions, scaling, unicorns etc.
|
| You answered your own question.
| dboreham wrote:
| Because money
| claudiulodro wrote:
| Even if we disregard the recurring-monthly-fee part of SaaS,
| which is popular because it makes more money, I think the "cloud"
| part is a main reason there are so many. Nobody wants to deal
| with creating installable business software, and businesses
| mostly don't want to deal with installing software across their
| systems. It's much simpler for a small dev team to have the
| software live inside a website, and it's relatively simple to
| bolt on a monthly fee for access to a website.
| dgudkov wrote:
| > businesses mostly don't want to deal with installing software
| across their systems
|
| And now they have to deal with cloud leaks of sensitive data
| that they no longer control and various SOC2/ISO
| "certifications" increasingly look like security theater and a
| "feel good" measure because they don't guarantee anything.
| lotsofpulp wrote:
| What is there to deal with? No one cares about leaks, and at
| most you give out some cheap credit reporting nonsense. A
| data breach is hardly news anymore.
| jaywalk wrote:
| This is the big one. It's far easier for both sides to use the
| "cloud hosting" model. The seller only has to worry about
| deployments on their own systems, and the buyer doesn't have to
| worry about deployments at all. It really is a win-win.
| ppjim wrote:
| This has to do with both a technological and economic change.
| Let's say it's the equivalent of music and movies we go from
| "owning" through physical devices, then to virtual and now
| streaming. We are moving to a society where we will no longer own
| anything and will only use services. This is not only happening
| in software. We can have car-as-a-service, food-as-a-service, and
| the list goes on.
| RobRivera wrote:
| gotta pump those ARR numbers baby
| pastacacioepepe wrote:
| It's just that having a recurring revenue allows you to offer
| features that you wouldn't be able to otherwise, and people WANT
| those features.
|
| For example, as a B2b software company, there is no way I'm
| offering customers any complex cloud functionality, especially
| involving data storage, if I can't guarantee that I will be able
| to cover the costs in the future. Thus recurring revenue is a
| must.
|
| On the other hand, if you just need an offline app that can work
| fine without being updated frequently, probably a single upfront
| payment is better suited.
|
| This is nothing new by the way, multiplayer games have worked
| this way for a long time. In general a multiplayer game that asks
| you a subscription fee has a much higher chance of being kept
| online for longer. See WoW. Without subscription fees they would
| have probably shut down a long time ago.
| AussieWog93 wrote:
| As someone who runs a retail (eCommerce) business for a living, I
| think it's also worth pointing out that people get far more
| "rational" about their purchases when you ask them to spend a
| large chunk of money at once.
|
| The same person who would think "do I really need this?" when
| faced with spending $1200 on a high-end automatic espresso
| machine wouldn't even think about spending $5 a day on a takeaway
| latte (which ends up being an order of magnitude per expensive
| once you amortise the cost of the machine over the number of cups
| produced).
| somesortofthing wrote:
| One reason is that SaaS pricing is an easy way for people to
| "hack" corporate spending restrictions. You need accounting
| approval for that perpetual $10000 software license, but a $500
| monthly subscription payment is totally at your discretion, even
| if you end up spending more of the company's money in the end.
| wolpoli wrote:
| I am not in accounting/finance, but the world has been on SaaS
| for so long that it's hard to imagine that the department
| responsible for controlling spending hasn't caught on and
| plugged this loophole.
| somesortofthing wrote:
| Yeah this is less true than it used to be but it's a big part
| of how SaaS initially came to be the only game in town.
| recursivenature wrote:
| Completely understand the comments around valuation of a
| recurring revenue business and ongoing maintenance. Those are all
| true and accurate.
|
| I've also been thinking about this from an ecosystem standpoint
| that it is now very difficult to develop a software product that
| is _not_ SaaS.
|
| If everyone else is SaaS, and you are not, your business will be:
|
| - Valued lower than equivalent revenue SaaS businesses, because
| revenue is lumpy and comparatively unpredictable
|
| - Have greater difficulty raising capital, because investors
| aren't used to valuing non-SaaS businesses any more
|
| - Have greater difficulty hiring engineers, as they know the next
| job they have will likely be SaaS related
|
| - Slower sales cycle due to higher upfront price required (IE -
| Doesn't automatically fit on an employee card for land and
| expand)
|
| - Higher customer acquisition costs, as most customers, other
| than those on HN, are used to the subscription model and prices,
| and would encounter sticker shock at the high prices required to
| make a one time purchase work
| pleas4nt0ne wrote:
| TAForObvReasons wrote:
| > most customers, other than those on HN, are used to the
| subscription model and prices, and would encounter sticker
| shock at the high prices required to make a one time purchase
| work
|
| This one has basically come full circle last year. [1] Many
| "customers, other than those on HN" have been burned by
| subscriptions in the past and are rightfully using pricing
| models assuming a 10x service spike in the future. We've found
| it easier to sell one-time units for $25000 than subscriptions
| of $250/mo
|
| [1] https://news.ycombinator.com/item?id=28372532
| [deleted]
| asdff wrote:
| I don't get it. It used to be software licenses were being sold
| for like $10 or $20 dollars. Now $.99 a month is somehow more
| palatable than $20 for life? I don't believe it. I think
| perhaps organizations got too large in their bureaucracy. Times
| were probably leaner for the business folk when software were
| sold for $10 and $20 or even $120 dollars for Adobe products.
|
| All that being said, it stands to reason you could structure
| your business to be lean enough to ask for $10 or $20 or $120
| licenses again, because it worked fine a decade ago, and
| nothing significantly changed to make it not work now other
| than all the sexier corporate real estate these companies have
| invested into across the US and expanding administrations.
|
| You could take a share of that profit from license sales after
| paying your immediate overhead to set up some sort of trust
| that can pay out maintainers for that software long into the
| future. It can even be structured to outlast the development
| company if done correctly.
| lotsofpulp wrote:
| I know a lot of small business owners love SaaS that reduce
| their IT department to someone who can buy a new iPad and log
| into the apps again.
|
| Payroll, POS, inventory, backup, etc and the owners can keep
| track of everything remotely. Setup a backup mobile internet
| solution, and your biggest IT problem becomes regional loss
| of electricity.
|
| Nothing for employees or others to steal, nothing to spend on
| tech support labor, and being up and running again is just a
| matter of replacing the iPad.
| Mikeb85 wrote:
| ??? JetBrains definitely offers monthly plans, SaaS-style.
| scarface74 wrote:
| You can't sustain a business on one time sales. Operating systems
| change, markets change, and products need continuous updates.
|
| Besides, managing servers is "undifferentiated heavy lifting",
| why would most companies invest in infrastructure that "doesn't
| make the beer taste better"
| llanowarelves wrote:
| Yeah but it's not like that software had lifetime free updates
| either.
|
| You pay for that full version (3.x to 4.0, or 3.2 to 4.2). Want
| updates? Pay for an upgrade.
|
| This is how a lot of software still works, and so the devs
| aren't perpetually working for free to existing customers.
| scarface74 wrote:
| In that case you are holding back updates even though they
| are ready for the "major" update. What if the "update" is
| just compatibility/features for new browsers/mobile OS
| versions? Besides, there is no "upgrade pricing" in either
| mobile OS.
| ggregoire wrote:
| Interesting that you chose the "JetBrains model" as example cause
| everyone I know who uses one or several JetBrains products uses
| cracked versions. I know like 10 developers who use their
| products and I don't think a single one of them paid for it. So I
| guess one of the advantages of the SaaS models is that you can't
| actually use the product without paying for it. And if you detect
| that an account is fraudulent (hacked account, account sharing,
| fake banking info, etc) or late in its payment, you can just
| temporarily or permanently disable it with a simple UPDATE query.
| togs wrote:
| Capital in the 21st Century by Piketty claims the trend is labor
| -> capital in terms of power, I.e. labor becoming worthless,
| capital becoming more valuable.
|
| Makes sense then that software among other things becomes a
| service.
|
| Problem is same old conflict: I work for money, they own my work
| and take money, I resent that, they like it, then violence or
| legislation or something.
| JAA1337 wrote:
| In general SaaS vertically scales to increase demand which means
| factors of increased revue with no new work.
| enos_feedler wrote:
| Everything is a SaaS product because that is what users want.
| That is the simplest answer. Innovation always comes back to the
| end user. If SaaS was not a business model innovational that the
| user wanted it would simply die out. Instead, it's growing.
| bearjaws wrote:
| It's best to think of it as three loops.
|
| 1. The loop of just regular maintenance. How long is that version
| of Node supported? 2 years? Alright assuming you did literally
| nothing, no bugs, nothing else your software is already needing
| to be tested against a new major version in just 2 years.
|
| 2. External loops, integrate with XYZ platform? Oh version 1 is
| EoL in 2 years? Guess you need to get on upgrading to API version
| 2!
|
| 3. Someone uses your out of date software and runs into an issue,
| now they email you, tweet at you, complain that your software
| sucks and you should support it better. (My first job would get
| this all the time for software we released 6+ years ago) Oh you
| fixed that bug in the new version? "I should get it for FREE!!"
|
| Who is going to do this work for free?
|
| Even if you cut the support emails down to a minimum, that alone
| costs money to automate...
|
| Another favorite of mine was complaining about price, "$5,000 for
| a perpetual license?!"
| xtracto wrote:
| I just recently cancelled a $5 a month subscription to an Android
| App/website service for storing food recipes. I was subscribed
| for about 2 years to "support" the small developer, but really
| could not justify paying any monthly fee for a program... I
| replaced it with a self-hosted RecipeSage install.
| Melatonic wrote:
| It is all about money and ease of use. What you are describing is
| how the software model used to work - it is simply easier to
| outsource everything. But as you note, of course, this usually
| makes things more expensive.
|
| Cloud providers and software engineers have of course come up
| with tons of new tools to make this outsourcing (or you could
| also call it renting + outsourcing) cheaper (autoscaling being a
| huge one) and this incentivizes moving to SaaS or PaaS
| infrastructure. However as these new products mature companies
| are also realizing they can use those same innovations in their
| own "on prem" infrastructure. Most of the time it comes down to
| how big the company is (do they hit the threshold where hiring a
| bunch of people to run their own datacenter or machines makes
| sense) and is their business long term focuses enough that they
| care more about the big potential cost savings vs the advantage
| of (from an accounting perspective) recuring regular costs per
| quarter vs larger occasional purchases of hardware.
|
| Personally I think we are going to see a huge "private cloud"
| movement in a few years once the market matures and companies
| realize they did not need to give absolutely everything to AWS. I
| have always liked the hybrid cloud model and then using SaaS only
| for things that are a huge pain in the ass to manage (since with
| SaaS you are not just renting/outsourcing the hardware but also
| all of the software work as well). Email is a great example of
| this - its a huge PIA to manage yourself and often not that
| costly to just pay someone else to do it.
|
| In my opinion the holy grail for many companies is having their
| big "regular" workloads (especially stuff computationally
| expensive or requiring special hardware or large storages) run
| themselves on their own hardware + seamless integration with a
| cloud provider for autoscaling that process up as needed.
| kaffee wrote:
| Ben Thompson nails it, as usual:
|
| "The brilliance of paying on a subscription basis is that a
| company can buy exactly what it needs, when it needs it, and no
| more."
|
| From https://stratechery.com/2019/microsoft-slack-zoom-and-the-
| sa...
|
| He's written about this in other posts too.
| cammikebrown wrote:
| Capitalism, baby! Companies have figured out they can take more
| of your money if they extract it little by little instead of in
| chunks.
| drivingmenuts wrote:
| Rental fees, so to speak.
|
| Software as a service becomes a rental property and owners can
| milk consumers for more money over time as well as introduce
| features to encourage lock-in. Basically, you're teaching frogs
| to boil themselves.
| UI_at_80x24 wrote:
| Rent seeking behavour
| stetrain wrote:
| For 1), what exactly are you expecting to happen to enable this
| cloud backup to continue working?
|
| You pay once for someone to set up a hard drive in the "cloud"
| you can put your photos on?
|
| They charge you enough for a lifetime of transfer bandwidth?
|
| What happens when the hard drive dies? Do you want redundancy so
| that if one drive dies the photos aren't lost? Who pays the tech
| to go change out the first drive when it fails so it can recover
| before the others in the array also die?
|
| What's your personal risk aversion for losing this data? Even a
| two-drive RAID array can lose all of your data in some scenarios.
|
| For 2), you want an app that connects to all of your accounts.
| How does it do that? Usually by using web APIs or a third party
| interconnect like Plaid.
|
| What happens when they bank you use updated their API? Who is
| going to provide you with updates to keep all of these account
| connections working?
|
| ---
|
| Both scenarios you describe have ongoing maintenance. Things
| weren't SaaS when they existed solely on your local computer and
| continued working without constant maintenance, but your two
| examples that come to mind show how our expectations of
| technology have changed and we expect things to work online,
| backed-up, and to keep working even as integration partners, OS
| vendors, etc. update their systems.
| teraflop wrote:
| I think the point is that you should be able to use _one_
| commodity service to handle your data storage and syncing
| needs. (Or maybe a couple different ones, if you 're worried
| about your account getting terminated.) But that doesn't mean
| you should have to be nickel-and-dimed by subscriptions for
| every individual application you want to use.
| stetrain wrote:
| Sure, I could build a photo app for a one-time purchase that
| lets you add your own credentials for S3, B2, etc.
|
| What's the market size for users who will set this up
| themselves (versus going for a competing app that bundles the
| cloud storage), how many platforms will I have to develop for
| (Windows, Linux, Mac, iOS, Android?) and will they promise to
| never complain when an OS update or API change breaks the
| app?
| swatcoder wrote:
| We did that for _decades_. Many products still do. The
| model is plenty well proven, and the markets well
| demonstrated, so this kind of rhetorical "well what do you
| expect?" stuff is unconstructive.
|
| There are reasons a business may _prefer_ to provide their
| product as an SaaS, but it's hardly some necessity.
| yibg wrote:
| If that's the case you should be able to build a non SaaS
| competitor and take their market share. In the end if
| SaaS is really bad for the end user, competition should
| take care of that should it not?
| stetrain wrote:
| Yes, but that market mostly existed before everyone
| expected every app to be online and connected to other
| services, and since then the market has moved to SaaS. So
| if customers will pay more for a subscription that is
| inclusive of these details and maintenance, why would I
| choose the option that leaves me with less revenue and
| fewer customers?
| lolinder wrote:
| We did cloud backup as a single-purchase pluggable-into-
| any-provider desktop application for decades? I don't
| recall anything like that.
|
| The features OP is asking for in their not-SaaS product
| wishlist just plain didn't exist before SaaS. There was
| no cloud backup, there was no automatic account
| connection in your budgeting app. It's not obvious to me
| that things that _require_ a connection to an always-on
| server (and some features really do require that) could
| be sustainably delivered in a one-time purchase model.
| ensignavenger wrote:
| Microsoft Money and Quicken absolutely had account
| syncing abilities in their one-time purchase software
| license budgeting apps.
| lolinder wrote:
| Ah! I stand corrected.
| count wrote:
| Those decades didn't include the features, functionality,
| scalability, or user-friendliness required by the
| BILLIONS of people online now using services that weren't
| able to use them when they required you to do your own
| setup.
| asdff wrote:
| Software should be maintained in an almost private trust model
| imo. Pay upfront for the license which generates a bunch of
| money for the developer upfront. That money along with all
| future revenues from new licenses are put into a trust that
| grows over time and is used to pay salaries for maintainers and
| to pay for server hardware. Maybe if you own your own hardware
| you could even have a side business of leasing your spare
| compute capacity and that perhaps could cover its costs.
| cinntaile wrote:
| Nothing is stopping you from having such a model, but why
| would everyone need to do this?
| bluedino wrote:
| Because the MBA's decided they could make more money that way.
| SilasX wrote:
| Because enforcement of their copyrights in the digital asset
| itself, that you would prefer to by, is extremely difficult. SaaS
| sidesteps the piracy problem entirely.
| maxwell wrote:
| Margins.
| somenameforme wrote:
| Large companies are growing to levels that are arguably
| unsustainable. When you have billions of dollars in baseline
| overhead costs, an amazing product may not even get you in the
| black. You'd need to do that every year, and likely multiple
| times per year. It's simply not realistic. So the solution these
| companies are choosing is rent seeking.
|
| I'd add that this issue is affecting many other industries as
| well. Entertainment being a visible one. Hollywood has big
| budgets, big overhead, yet increasingly difficulty finding the
| big ideas. So we get "Men in Spandex Save the World #83." AAA
| games are behaving similarly. There seems to be less of an effort
| than ever to even feign that "Next Big Shooter" is essentially
| last years next big shooter, reskinned.
|
| This is why I hold the certainly uncommon view that we are
| probably nearing 'peak big business', at least until the next
| great frontier emerges. It's difficult to imagine these
| increasingly widespread "solutions" being sustainable in the
| longrun. One issue, among many, is a tragedy of the commons with
| many solutions. Charging rent sounds great for the individual
| company, but the more companies that charge rent - the more
| intolerant consumers become of it. See how online streaming went
| from a golden goose to a bloodbath for everybody once "too many"
| companies got involved.
| Macha wrote:
| Jetbrains wanted to go full subscription too but their userbase
| revolted.
| cosmin_caruxell wrote:
| 1. Recurring revenue - revenue is repetitive, with, ideally, a
| low churn rate. 2. Revenue forecasting (being able to predict
| growth with higher precision than ever before, and also check out
| how fruitful your marketing campaigns are). 3. Flexibility. If
| users like your product (there's a real value that your product
| or service provides to them), they'll stick around. If not, they
| won't. 4. Profitability. The SaaS model tends to be a lot more
| profitable (especially in the long term).
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