Reason why there's an uptick in SaaS companies in Eastern Europe, Asia, and West Africa. They can out-compete on price already and will gradually manage to build software of similar quality as their counterparts living in higher cost-of-living countries.
This has been Freshdesk [0] / Zoho (both based in India) modus operandii for one to two decades now. And one I'm keen on living upto.
the other economic concept at play here is arbitrage, which is being able to buy low and sell high risk free.
In traditional software. SaaS has hosting costs, support costs etc.
If you have minimal customers, then your server costs don't need to go above the double digits. Servers will be almost 1:1, and licensing is usually 1:1. Considering them to be sunk costs is doing the math wrong. It's not like marketing at all.
I thought you meant some kind of pass-through licensing, but otherwise the expensive stuff like database licenses generally charge per core, don't they? That's going to scale very directly with your number of customers. If you need 4 web server cores and 1 database core per ten customers, then you should not be treating servers as a fixed cost, you should consider each customer to cost half a core and 1/10th of a database core license fee. It's not perfect but it's much much closer to reality than thinking about servers as a fixed cost.
Don't go buy 150 servers in anticipation of customers you don't have.
"A direct cost is a price that can be directly tied to the production of specific goods or services." yes that is the case here.
And if I look at the first search results specifically talking about servers:
https://www.ibm.com/downloads/cas/DG7NY5QW says servers are a direct cost.
https://blog.hubspot.com/marketing/direct-costs says servers are a direct cost.
take an accounting or pricing class if you're really interested in this stuff. that will explain it much better and more in depth than a few sentences here can.
And servers do not have to be coarse. They come in all sizes.
In particular I want an explanation of how servers are less direct then the wages of production staff. You can measure output similarly, and you can scale your number of servers much faster than you can scale your number of staff.
So even if you're the rightest person in the world, you've done an awful job of commenting. There's no reason to believe you, or to believe that you would actually address what I said if I did pay you. Otherwise I would actually be tempted to do so.
A bigger issue is that anyone with a VPN can access the discount
Some of them are significant per customer, and some of them aren't.
I wasn't really making a point about privacy.com specifically my comment was more to imply there are services that allow for arbitrary billing addresses.
I not saying it's impossible to bypass these checks, but you either have to be very tech-savvy person to do it right or you you even have to break the law.