Let us buy our software, and separately, offer us a service agreement that actually has to provide value in its own right. The bundling of these in SaaS is what makes this obscene.
Start with a few services at ~10$/user/month and it doesn’t take a very large org before the numbers get quite high. And you generally still need some technical support in house.
If you're not a larger company you are paying consultants and the licensing fees.
Software pricing is a reflection of the fact that it's not a consumable good and the humans that make it have ongoing expenses like rent— not necessarily that it's hosted. Even in the bits in a box days the business was built around recurring revenue, you could choose to not buy the next version but it implicitly relied on most people not doing that.
In the bits in the box days, quite a lot of the world was skipping version numbers. That was a huge reason for SaaS pricing in the first place. Worse boxed software generally needed some improvement to justify upgrading, SaaS is heavily optimized for rent seeking.
But I can rent a dedicated server at hetzner, use ssh and set it all up. No need for a staff.
The difference is the dedicated server setup requires domain specific knowledge.
If the project needs to scale, a SaaS will become a huge cost in the overall operation and having a dedicated server is much better.
Hiring staff is still cheaper than paying a SaaS, at large scale.
You can pay for a lot of seats with a $70k salary and that's on the very low end.
If you account for opportunity cost you have to be very large before on-prem becomes worth while or your time must be worth so little that you're probably better doing another business.
Take for example my friend who works in a ~15 person office in a specialty finance field. Most of their software is SaaS, but they still need someone to manage that software. Plus, the eternal struggle of setting up, managing and supporting employee machines means they need IT services, they just use a local firm. Before SaaS, they would likely have a small on-prem server, but they would be hiring the same MSP firm and probably paying roughly the same amount. SaaS software is normally way more expensive, and that cost increase isn't often offset by a greatly reduced consulting fee for many small businesses.
I have a friend that works at an MSP, they have customers who need help setting up and managing a Square POS system. While that is easier to configure that a locally hosted windows based one from 20 years ago, it's still more than many people opening a restaurant are comfortable with. And is the monthly fee cheaper that a one-time purchase and setup fee plus occasional paid upgrades? I'd genuinely be curious to see an accounting breakdown for a restaurant's software & hardware costs now vs 20 years ago. Hardware is certainly cheaper, but I'm not that convinced that it's really much cheaper overall. Square POS is 69/mo + 50/mo/device for the minimum anything beyond a popup or food truck would need [0], and $828/year minimum isn't exactly free, damn near doubled to $1428 if you have a second register. Especially if you also need to hire the same MSP, just at a potentially reduced number of hours per year.
[0] https://squareup.com/us/en/point-of-sale/restaurants/pricing
SquarePOS is free. The monthly fees come from addons which you'd be paying for as multiple separate pieces of software previously. Stuff like Kitchen management/time roll/online ordering/etc. Plus your merchant account costs which if I remember right last time I got an actual merchant account about 15 years ago was $500-1000.
Also the monthly fee is per location not terminal so you've doubled up the fee incorrectly.
And if I hit the jackpot and get millions of users, I prefer to pay employee salaries than vendor lock-in SaaS fees.
Until hard drive died on that server and turns out backups were broken for the last 5 years.
Until someone tried to fix some (real or perceived) problem with the server and it suddenly became full of malware.
Also, markets often do come up with better, more ethical alternatives — but only after society pushes back against the harmful defaults. Ecologically, people used to say there was no alternative to burning oil or dumping waste into rivers. That didn’t make those practices okay — and change only came because they were first criticized, regulated, and in some cases outright banned. Progress doesn’t start with “there’s already a perfect alternative”; it starts with “this is no longer acceptable.”
Do you use visa or mastercard? That is SaaS.
The main thing govts need to do is to force companies to allow export/import transparently . But then small SaaS don't have man power to do this (even if they truly believe in cause).
and also penalize or jail both programmrs/CEO that use subscription model with cancellation fee for even cancellations. Lots of people in HN would even be against this - as they claim - I wrote the code only - following orders.
Please, can anybody enlighten me I suppose? I build a lot of side projects, some of which are genuinely cool and I can genuinely see it being a "saas" but like you, I hate saas from a consumer perspective and I love saas as a guy wanting to earn money so my ethics are definitely questionable at the moment.
Also, let's say I want somebody to buy my software. How does that make sense? What if they just redistribute that software without my permission. Doesn't that just eat into the profits when Saas couldn't.
And also I personally am a foss advocate and as you said its economically bad.
I am kind of thinking of creating software which is just source available and that you need a permission / license which you can get by github sponsoring me but I saw this one project doing it and the people in hackernews were pitch forking the poor guy. Its so crazy and bizarre that once you actually try to provide "some" value. You are automatically the bad guy for not using MIT.
I am also thinking of such a license where its SSPL if you don't have a license or BSD/MIT if you have a license (sort of like redis-ish)
But I am not sure if people would buy them. Maybe I can support both I suppose? I am not sure lol, which is why I wanted to get enlightened
PS: I built a way to create your own cryptocurrencies for genuinely free (no jokes)(not sure how to monetize and if, If anybody can help, that would be great!) and a way to get blogs from youtube posts and a way to youtube community post and videos as an alternative to google photos for unlimited storage (though the privacy aspect for community post is a little bad but I guess I can fix that as well)
How is that rent seeking?
No, because that would require everyone to own and operate their own servers. I am very happy I do not have to share my bedroom with a server rack so that I can operate my company - not to speak of the cost to deploy a 15gbit/s line to my apartment…
By this logic, my house cleaner is rent-seeking because I pay every week, but I could do the work myself. That’s not what rent-seeking is. That is a garden variety service.
All of the anti-subscription sentiment just sounds like “I want perpetual support and updates for a one-time price”, which is just silly. It’s actually bad for the customer because once the service provider has your one-time payment, they have zero incentive to keep you as a customer.
It leads to misaligned incentives as sellers seek to expand to new markets to reach new customers while neglecting existing customers who are nothing but expense.
Further, SaaS produces net lower costs because resources can be utilized more efficiently. Great, you can do an on-premise server, but you need to spec it to support the busiest second in the busiest day of your year. Most of the time it will be underutilized.
Sorry, this whole claim is such a massive misunderstanding of Smith and SaaS that it’s making be a bit crazy.
The anti-subscription sentiment is not without merit, however. Software that just runs on your computer now has a fucking subscription for no reason. Adobe, games, etc. That is rent-seeking, because I want to pay for the goddamn thing once and own it. I don't care for support or upgrades; if I do, I'll buy the newer version.
If I think a service is worth $20 month, that will not change if their cost structure changes and suddenly it costs them $1 or $100 per month to offer. It’s worth $20 to me either way. If their cost becomes $1, I rely on competition to create the consumer surplus.
Every commercial company is free to charge whatever they want, it's not rent-seeking (unless there is a monopoly, but your argument is applies to small companies as well).
And yes, the fact that you cannot find the software you need for the pricing model you like sucks.. but it is not rent-seeking. And the fact that my local Home Depot does not have cheap, but reliable refrigerators is not rent-seeking either. At worst, it is collusion between manufacturers.
Many companies don’t have a prem on which to run.
This is very specific contribution in economic productivity, as the company gets no work done when the communications system is down.
I doubt anything has literally perfectly zero contribution.
The problem is that you have really only little competitors on the market.
Eg. Microsoft 365 namely being the one that has outgrown any competitors that can seriously threaten them. They can dictate the prices and they do it willy-nilly and there is no-one that forces them to be cheaper.
I kind of like this idea personally instead of electron
Raising the price of your product isn't rent seeking.
For example take Google Workspace - email, calendar, docs. Google has no particular patents for those, and I've never heard about startups in this area not getting traction because of IP troubles.
Same goes with Jira, or Github, or Slack, or AWS S3 - all of those don't have particularly many patents and in fact there are plenty of alternatives, self-hosted or otherwise. People still pay for them happily.
What’s the economic explanation then for why so much high quality (or at least, widespread and critical) free software exists?
Take the Linux kernel as an example. If you were a kernel hacker, even a minor one, from the 1990s, it's quite likely you could parlay that experience into a good job today doing something similar. Those 50-100 hours decades ago have compounded quite nicely for you. But your contribution didn't decay over the next 30 years - worst case scenario, it stayed exactly as good as it was when you stopped, and best case scenario it's been substantially rewritten and incremented upon.
That's how I explain it to myself at least.
I am curious, have you had any moment of insight following your initial comment?
OR is this the hill you die on?