Cloudy with a Chance of Lock-In
jacquesmattheij.com
jacquesmattheij.com
In some ways this is the end of the software piracy wars. Software as a single purchase that you buy once and use forever without restriction is basically over. Besides, it needs updating to cope with both security threats and changing ecosystems. So that requires ongoing effort. But users don't want to pay for it in the first place.
So the solution we've arrived at by default is for the software to remain inside the datacentre fortress where the user can't pirate it, and make the user bring their data inside the fortress instead where it can be ransomed. Quite a lot of SaaS is "free!" but with monetised privacy invasion or the questionable gimmicks of free2play games.
IoT makes it possible for this untransparent renting business model to be brought to physical objects. If you buy an appliance once and then use it for 20 years, to the capitalist you're a bad customer. Why do that when you can pay for annual fridge software updates and a new fridge every 5 years when it stops being "smart"?
The subscription business model is the end result of piracy. For some applications, it's a legitimately better model. For most...it's basically just a business decision.
This isn't made any easier by component suppliers, such as chip makers, which also tend to support their chips for very little time. Last I checked, even Qualcomm, the dominant player in the mobile chip maker, was supporting its SKUs for only 18 months. Basically, the whole ecosystem has decided to support their hardware as little as possible.
I agree with your point though. I wish tech was more "recyclable/upgrade-able" than "disposable".
I recently bought a Volkswagen 2013 model and have been playing around with its bluetooth. Unfortunately the good stuff is only available in this years models - which is a hardware upgrade as well as a software upgrade. (Think Android Auto, automatic mirroring of the smartphone onto the car console, etc)
The only situations in which the Internet of Things will work is where it is acceptable to replace the Things on the same cycle as we replace phones - every year or every other year. For the vast majority of appliances, this is not the case.
Will it become as annoying as my printer that tells me when it's time to order genuine non-warranty voiding ink (just click here!)?
Or detect if I haven't used OEM parts or a factory certified repair service?
Edit: Wait, I thought of one. A Weight Watchers tie in that detects how many times I've cheated and locks the door.
I'm afraid that the only way it's going to happen is if the government wades in. But first enough people have to give a shit about these systems, and that'll require them actually being useful to a majority of consumers.
Unfortunately, I have no idea. Obviously I can say "only buy systems that are open", but it'll take a lot of people to make a significant impact. Hopefully, when things die, we can say "I never had that problem with $vendor because their systems are open!"
It's kinda ironic - during the Bush II presidency everyone was talking about the "ownership society", but the trend today has been toward the "renters' society", where consumers own nothing, the means of production are increasingly centralized in a few specialized producers, and everybody pays out of pocket for momentary needs. It's accelerating, too: car ownership => leases => Uber, suburban homes => urban apartments, vacation homes => timeshares => prepackaged "experiences", careers => gig economy, pay for printers => pay for ink, books => the Internet, videos & DVDs => Netflix, CDs => Spotify, exercise bikes => gym membership, building companies to last => hitting quarterly numbers.
I wonder sometimes why consumers put up with it, but most seem to actually prefer renting things for the short term rather than buying them for the long term. It's like the time preferences of society have compressed radically, and where people would used to think about investing in things that last for 30 years, they now focus on what they need in the next 30 minutes.
The main problem with this trend is not that it's happening, but the way that a few companies are able to position themselves as gatekeepers. This will lead to abuse or at least monopoly pricing. Unfortunately, competition isn't really a good solution. I don't want a second Spotify.
When you sell a physical product, there are inherent inefficiencies in distribution & usage that allow for some differentiation; this allows multiple firms to exist in the same market. When you sell a service, your distribution goes straight to the consumer at the moment they have a need, and you have the opportunity to tailor your service directly to the customer. It becomes more efficient to buy up small companies that offer slightly-differentiated variants of your service and incorporate them into your own offering than to maintain separate firms.
Interesting. This seems like a tradeoff of efficiency vs. freedom: the more you outsource a task, the more convenient things become for yourself, but the less agency you have over the terms under which that task is conducted.
Another factor is that selling physical products often results in a market for lemons, where the buyers can't figure out which product will last longest and so purchase based on other more visible factors. Buyers can try to trust brands, but many brands will cash in on their brand by switching to greatly reduced quality at the same cost.
Replacing a product with a service can better align the incentives. If, instead of a refrigerator, you purchased a service contract for refrigeration for X years, then the supplier will want to provide a refrigerator that doesn't break.
There's something, I don't know, honest about building something that works, and works well, and just selling it to people who then own it.
The audio quality of streams are often sub par.
What about Youtube and then buying MP3 files from Amazon/etc? And Audio-CDs are still the best for lossless audio.
I understand that companies prefer to rent or lease because of tax avoidance and/or lowering overhead (fixed costs) (because of inflexible accounting programs, blabla).
On the otherside, as a consumer (and if you have the money and your interest is longterm), why not just buy it? Why rent/lease something? In the long term you are better of buying it. Renting/Leases are always more expensive in the long run.
Also owning something is a lot more rewarding, relaxing, (and it can be used many years later) than handling some leased/rented subject with utmost care.
Of course they get burned but that won't stop them from repeating the same mistakes over and over again.
Because in the short term all these things are convenient and attractive.
The generations that grew up in the 50s-80s could be reasonably confident that the world a decade later would be more or less what it was before. Fashions would change, social movements would get started, more home appliances would be introduced, but as long as nuclear war never happened, the basic economic underpinnings of society wouldn't change too much. And so it made sense for them to buy things for the long term, because the purchase they made now would still be relevant & useful in 20 years.
Starting with the Netscape's IPO in 1995 and perhaps exacerbated by the fall of communism in the early 90s, that changed. Even before they came of age, Millenials had witnessed the dot-com boom & crash (in which many of their elders lost their life savings); obsolescence of PCs every 2-4 years; 9/11; the rise of MP3 sharing and then its clampdown; the rise of cellphones, their replacement by smartphones, and then the 1-2 year upgrade cycle of continually getting a new smartphone; the 2008 financial crisis; manufacturing jobs moving from the U.S. to Japan to India to Bangladesh to China to Southeast Asia; and the rise of sharing-economy companies providing services that you previously needed to buy a product for. Many have also been personally burned by investments in skills that were supposed to be a sure thing, like taking on $100K in student loan debt and not being able to get a job afterwards or landing your dream job and then being fired or laid off 3 months later.
The combined effect of all these is to send the message that the future is not worth planning for. There will be better products on the market in 2 years. There will be new services. That skillset that's so hot right now may be completely obsolete. The education that everyone says is crucial to your future won't get you a damn thing. The financial investment that's up 400% now may crash to zero tomorrow. You may have to move to a new city to find work, or to follow a significant other who needs to find work.
When the future becomes radically unpredictable, it makes sense to buy for the here-and-now, because the durable product you carefully invested in may be useless anyway.
You can see it clearly in things like tool and machinery quality. 60's stuff is nigh on indestructible and still in use today, 70's stuff is gone as if it never existed.
Also Plastics technology improved and started to be widely used during the 1960s. This took into the 1970s to be widespread.
The biggest money maker for such subscription type purchases are impulse purchases. Buy now on cheap credit, pay a premium for a long time on top of the value of the item. And for those type of purchases if you were to do them with money saved over time you probably wouldn't buy them at all. (And your life would be better, not worse, all this stuff is really owning us.)
car ownership => leases => Uber suburban homes => urban apartments vacation homes => timeshares => prepackaged "experiences" careers => gig economy pay for printers => pay for ink books => the Internet videos & DVDs => Netflix CDs => Spotify exercise bikes => gym membership building companies to last => hitting quarterly numbers.
Gig economy and short-term companies are arguably not a choice but exogenous. The job for life has been replaced by "at will" redundancies.
Home downsizing is clearly down to rising cost; saving up gets less and less feasible. But the move from suburbs into the centre is cultural.
Home gym => gym membership I suspect is also down to increasing real estate cost. A gym is much cheaper than the incremental mortgage cost of an extra room.
Media libraries => Spotify/Netflix is about increasing choice. They're not entirely replacing the library (people are buying more vinyl for totemic ownership), but replacing the radio and TV channels. Replacing someone else's limited range of choices with a much wider one. It then gets put on in the background as wallpaper.
(dear god this site needs a formatting reminder and preview button)
When I bought my Honda Fit in early 2009, for example, new cars were selling for less than used cars. Many of the new car owners had bought at inflated prices in 2007, sometimes $2000 over MSRP, and with Hondas holding their value well, they were hoping to get something close to what they paid for it. Meanwhile, the economy had cratered, and dealers were trying to move the inventory off their lots ASAP because nobody was buying. I ended up buying my car for under invoice price, about $3-4K off of the inflated prices that buyers a couple years before had paid and a good $500-1000 under what used car sellers were asking. Needless to say, the used cars weren't selling.
Similarly, I have several friends who bought houses a couple years out of college who ended up taking a $50-100K capital loss on them when they went to sell them. The high end of that is close to what I've paid in rent over my entire life, and doesn't take into account interest payments on the mortgage, which themselves were close to my rent.
It only takes a couple incidents like this to turn people off of owning things forever.
I don't see how you can say that is the case for everything. Look at Netflix. Most stuff people watch only once. Why buy a bunch of discs to collect dust on your shelf?
Do you use a flat-rate meal delivery service or eat everyday at the same all-you-you-can-eat restaurant?
Instead of buying ingredients to cook a meal at home or going to different restaurants?
Consuming a flat-rate service from a single vendor is alright for the internet connection, but for many other things it asks for troubles in the long term.
Back to movies:
DVD/BlueRay gives a lot better experience than streaming. The movie is in higher resolution, with many more audio options and not forget the bonus/extra content that alone is worth something and often quite interesting and funny.
Yes - Blue Apron. Although not exclusively. But I don't exclusively consume media content from Netflix either.
> DVD/BlueRay gives a lot better experience than streaming
First, I often don't care about the video quality of the content I'm consuming. Sure if it is a sci-fi action film I want surround sound and 4k or whatever. But most the time, a degraded qualify for a standup act or period drama doesn't really matter nor is it noticeable to me. Also I can't really tell the difference as much on a tablet or phone rather than my big screen.
Second, the streaming services are cost constrained right now on the quality front, but it seems like that is improving and likely to change at some point in the not too distant future. And some of the services let you get higher quality, right now, just with additional cost.
Third, streaming is right now much more convenient in meaningful ways. It doesn't have the hassle of dealing with physical media (acquiring it, storing it, sorting through it, loading it, discarding/reselling). It provides access to a larger library of content on demand. It allows for seamless resumption of paused or interrupted viewings on different devices. Access if available for any internet connected location. Content is often available faster, such as within minutes of broadcast, rather than waiting for a delivery or next day to head to a store.
Fourth, with the exception of a few beloved films, most the content I watch isn't something I ever intend to watch again. Purchase just doens't make sense in that context.
Yeah, well there is also the argument that I can run an environment of literally thousands of machines and a very complex stack with a crew of literally four OPs guys.
In europe there's a seven day money back no question answered right to protect consumers from hardware trying to pull these tricks. Won't last forever, but I could recently return a digital camera trying to pull this very trick.
Vote with the wallet, educate those who don't etc etc. It wont ultimately work, but if we can postpone it enough it'll become a next generation problem.
Yap same here. Bought a TV (Vizio). Without agree-ing to their "we'll monitor everything about you" disclaimer couldn't connect it to the wifi, couldn't start any of the apps. So agreed to it. Then had set up rules in the router's firewall to block it and have to un-block it if I want to watch Netflix for example. What a pain. Supposedly I could make a more complicated rule to allow only netflix traffic and no other traffic from it...
There was no, "let me connect to Netflix" but don't auto-update anything, don't phone home, don't send metrics etc. It was all or nothing. And then of course the apps are slow, crappy, and buggy.
At least Apple provides regular updates.
And of course, most people actually don't care about this.
Thinking about it, I guess I made a (perhaps bad) bargain -- you can have my data if you give me something useful and working that I want back. Roku works and gives me something useful, working apps and I expected I had to do it when I bought it. Google gives me Gmail, so it can spy on me. Vizio gave me a TV, but I paid for it, and I didn't expect that it would need an invasive home phoning agreement to be usable.
Microsoft is even worse, not only do they have their own annoying cloud "features" they opt you into, now they've decided to administer your computer for you from afar. I had to wait an hour yesterday for Windows to install a giant update that requires multiple reboots because they tried to install it overnight. Worse, it was applying it at the boot screen, so I couldn't even pause it or read the web while I waited. If Microsoft can just put my laptop out of commission for hours on a whim, with no warning, I can't trust their os for anything important. I'm not a Linux fanboy in the least, but since both major os's make me feel like I'm just renting my own computer I might make the switch.
It, along with my phone that continues crashing and the useless smartwatch I sold, have convinced me to never buy another Samsung product.
The cause of Jacques complaint is that it is very hard to sell a perpetual offline version at the true economic value of the software. In my case the customer would need to pay 72x the monthly cost for the value to me to be equivalent. Everytime I discuss this with a customer they don't want to pay anywhere near this amount. I know much more about how likely a customer is to keep using a product long term than the customer :)
Some things just work better with centralized cloud-based storage, but there's no reason users shouldn't be in control of that data. Social networks are the big exception. People are working on decentralized social networks, but it's a much harder problem. Many cloud services are just data storage, though.
For example (plug), we offer a product called Userify (ssh key management for the cloud) but we also offer a (rather expensive) enterprise version for people to deploy it on-site. In fact, we recommend that, since it's more secure for you to deploy and lock down your own version in your own VPC or DC.
And this is good for us, since the cloud version is free in its base form, and the enterprise version is currently the only way we're driving any revenue.
As time goes on, these models will stabilize and companies will go back to giving people what they actually want. You can't optimize for yourself forever; at some point, you lose customers.
So, as a counterpoint, large mobile providers have largely stopped subsidizing phones (which was blatant lock-in) in order to give people what they really want, which is choice. It makes more sense for the customer, and therefore automatically makes more sense for the company. Unless they have absolute market power, they can't throw their weight around that much.
So I'm not worried about TV manufacturers that require a monthly subscription. Those will get returned to the store fairly quickly and the ones that hide their costs will have a growing black stain on their brand and eventually fade into oblivion. It's said that customers are fickle, but customers as a whole are really quite rational.
(Counterpoint to this counterpoint: Apple and everything they make.)
People pay $10K per license to Altium or Solidworks for a reason.
Businesses and professionals would still pay for valid licenses and enthusiasts get a 'community edition' to get them hooked. It seems like it's a win-win.
Basically, someone slapped the UI of an integrated development environment onto a CAD program. That's so open source.
This is a rather good program, too. The underlying solid modeler seems to have all the right stuff. That's the hard part. Then they blew the UI.
3D content generation UIs are very hard. Some of the issues:
- Things may be very cluttered. Selecting can be difficult.
- Some systems allow you to select volumes, faces, edges, or vertices. In tight spots, selection needs smarts.
- For some operations, you need to select a subject and an object. But you may need to pan, zoom, or rotate between those two selections. Exactly when thing get deselected is a big issue.
- Most GUIs are subject-verb. (Select something, then do operation.) That follows Macintosh and Windows practice. This doesn't always work out for CAD, where you may need to select multiple things, multiple kinds of things, deselect mistakes, and perhaps perform other operations while selecting. Bad solutions involve holding down SHIFT or CTRL or two mouse buttons at once.
I understand why companies aim for this lock-in, but I believe that the question to ask is: why are such companies successful with such lock-in based products? I believe that they are successful with such strategies because of the lack of matching alternatives that offer the same usability for the majority of users. And when talking about usability I explicitly include the aspect of operation management. With cloud-based solutions, operation management is effectively zero from a user perspective.
During the past 10-20 years, the web has evolved significantly w.r.t. content rendering, content authoring, and content transport solutions. Today people can very easily watch movies, read articles, listen to music, or write articles, upload movies, and share music themselves. At the same time, the web did not (or only slightly) evolve in its underlying architecture. It does not provide the primitives required to bring content producers and consumers directly together. If you are a content producer, you either need to use a centralized service operated by a third party, or you need to have the technical skills to setup and operate your own IT-infrastructure.
The effect of this gap is even more significant if you look at todays users. Since they have multiple devices, the become content producers on one device, and their own content consumer on the next device. While technically skilled people could easily implement own alternatives (that run on their desktop) in the past to get away from online services and protect their privacy, they are faced with the challenge that such an application needs to feature smart synchronization among multiple devices in order to provide the same level of usability.
So, they only ever made the original $120 off of me, years ago. But they obviously still need to be making money in the meantime; but short of incompatibility in some way, i doubt i'll ever upgrade. So, I'm a huge fan of their software, but they could go out of business for being so good, if nobody ever upgrades. But if they went to a cloud solution, I wouldn't pay for that either, because I don't use it THAT much, and already have the app which works fine.
Same goes for Sublime Text; I paid for 2, but I doubt I'll buy 3; or even use it. But yet there's a company behind it that obviously needs to keep making money.
The answer, classically, seems to be new users, and new versions. If your software is really good, different products. Or just target Enterprise and charge a ton.
It's a tricky situation if you're trying to make money in software.
But on the web, you can build one thing, and people can pay you every month to use it. You don't even have to change anything, just keep it running. That's a pretty attractive model in contrast.
I don't like office in the cloud, and I don't like adobe in the cloud. I think there is probably a market of people who do, and that's great. But for those things, I prefer them on the desktop.
Same goes for music. I like having it with me; not tied to a music service.
But movies and TV shows are often watch-once for me, so a service like Netflix works well for something like that.
But as someone launching a collaborative SaaS, I can appreciate both sides. For me, the immediate need is SaaS, and secondary to that is offering buy once, use forever, once the economics are in place. I think there will always be some people who just want to pay for a SaaS, and others who refuse to but will pay for onsite. So, I think the best thing you can do is target both. People usually want to pay for something, if its worth it and fair. But what's fair and reasonable is different for everyone, so cast a wider net and you'll catch more fish.
And maybe one day, I'll buy that new version of Omnigraffle.
Email services like "SendWithUs" which allow for A-B testing of your emails... It has very little use being on someone else's servers. If your server can send an email, you can easily run a lightweight service that does more or less what they do. They sell a product, you pay for updates.
There are many such examples of services which don't really need to be online, but they want that monthly payment.
Furthermore, I remember buying SpaceMonkey. It was a great idea, except that I had this 2tb hard drive that was just sitting around being unable to be used because I refused to pay a yearly $50 fee. I ended up just prying it open and using the hard drive (mind you, you pay for the drive too).
One positive one is WesternDigital's NAS drive (my cloud). It has a feature you can turn on to use it as a "cloud storage device", but that is an optional feature which you don't have to use, instead you can have it 100% local NAS, or turn it on (granted from a security perspective, I'd rather NOT have it open to the open internet)
Companies who don't understand the value of these services are quickly left behind by those who do. Sure, there are some overpriced SaaS, but the rest are successful because they are correctly priced.
I have only experimented a bit with these services and am not actively marketing, but it is my understanding that there are several reasons to use them:
> you can easily run a lightweight service that does more or less what they do. They sell a product, you pay for updates.
* You can run your own git/github repo, make your own irc setup and write your own javascript framework but you can get to market faster using React, github and slack.
* Mail is annoying from what I understand. You can have your servers blacklisted pretty quickly even if you are simply trying to do casual email, this is abstracted away.
* I have build email templates, and it is pretty annoying because cross compatibility is hell. The assumptions and basic template I used to put together my email was from a service like this, I think mailgun. They keep updated info on compatibility and provide free templates and inline tooling to get this done quick even if you don;t use the service. However, if no one used the service these resources would have to be found from various blogs, etc. More time not developing.
* Building tracking and programatic email generation and transactional logic is probably not so trivial that the free for < 10K email limit most providers have would make the engineering spend worth it.
So the point is, some services are useful because they provide more value than building them in house. I have never used spacemonkey but the value prop is you can keep your data locally and back it up yourself. If you didn't want to pay the fees you could just buy 1 (or if you wanted redundancey) 2 drives and do it yourself.
The value propositions are presented up front. The real issue is when these services pivot or change and you are left in the lurch.
I'm glad that I'm not the only one who thinks this way when I see those words.
When I see "to better serve you", all I can think of is: "we found a way to make things better for us"
http://www.theregister.co.uk/2015/12/11/adobe_q4_fy2015_resu...
The UK student monthly fee for a student for their own use at home is a tad under £16. Probably ok for an undergrad but a little steep for a 16 year old in an FE College who needs access to Illustrator now and again at home...
A sort of silver lining is that with the rentier model companies will have an interest to produce more reliable products, rather than ones which break exactly one day after the warranty ends.
I have a Photoshop CS5 license, and I can't ever conceive of any reason I'd pay for CC. I have gotten my money's worth out of Photoshop CS5, and I'll continue to get that value, but I don't use Photoshop nearly enough to ever justify a monthly cost.
I have both and I get what I pay for in both cases.
Many people wouldn't buy the newest version that only included 1 or 2 extra "features". No longer can you buy Photoshop and use it for 5 years.
As consumers we don't have any right to demand software at whatever price point we want.
Only non-professionals have a hard time justifying the low monthly price. For them there are plenty of other competitive options. No one is forcing you to buy Photoshop -- use one of the other tools available.
As software developers we should all be able to understand: pay the price for the professional software, or if you think you can do it better, write a competitor.
Microsoft is pushing it now with their development tooling (e.g. Visual Studio). First, it was "sign in" to synchronize your settings across instances. Now they're encouraging monthly subscription based licensing, which requires you to be "signed in", instead of the traditional perceptual license.