> We have become a rent-seeking society
It just dawned on me while reading the article that this accurately describes the shift from licensed software to SaaS that has been happening in the past decade.
It just dawned on me while reading the article that this accurately describes the shift from licensed software to SaaS that has been happening in the past decade.
Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.[5]
Now maybe, the program used to be $40 and not free but switching to $20 a month is definitely rent-seeking.
As far as enterprise/business customers go, SaaS has been huge in reducing vendor lock-in and enabling customers to choose the best fit for their use case. SaaS has removed the huge costs of PoCs and initial adoption, meaning it's easier to evaluate vendors and switch when you're ready. You no longer have to buy the hardware to get the service up and running, or allocate as many employees to maintain the hardware and software. The explosion of vendors and competition in the SaaS space has forced more interoperability and customer-focused feature development than ever before.
SaaS has been great for pretty much all business customers. At this point, I don't think any but the largest companies, most specialized companies would rather build their own services at this point than try to purchase off the shelf when possible.
And I'm not talking about off-the-shelf vs built-in-house, I'm talking about billing method.
In many cases, the billing method has influenced the way the products work and how they're developed.
-Instead of buying a movie or a song, you stream it
-You don't own your data in the cloud
-You don't own the music you buy from Apple
-You can't even take the battery out of many newer model phones
n.
A political and economic system of Europe from the 9th to about the 15th century, based on the holding of all land in fief or fee and the resulting relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture.
Consider the inordinate attention (~homage) and data forfeiture which billions of people submit to those walled gardens (fiefs).
It seems symbolic that so many spend so much of their day with their heads bowed down towards their phone.
This is how all the stores selling IP make so much money, how all the streaming services are so profitable, etc all while not producing any original content themselves. And it applies to creators who direct sell themselves, because they aren't charging marginal costs on IP licenses - they are rent seeking their existing properties. Often to fund the creation of new ones, but I don't think many people argue the morality of rent seeking based on how the owner spends the rent. Any landlord can invest the rents they collect into new building construction, but that will still just lead to generating more rents.
With software there is the added benefit of low-cost, highly scalable replication of the capital intensive product.