Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month.
It's never that simple, though, is it? Suppose that tool solves a problem that a $100/hour employee would have solved manually in a day. How long did it take the employee to identify and choose the tool, arrange the purchase, and then learn to solve the problem using it? Probably a few hours too. So that $50/month tool had better be useful for replacing that job several times in a year or it's unlikely to be a net win in terms of time and money. It's certainly possible that good tools are far better than that cost/benefit ratio and using them is easily justified, but I'm guessing that in these organisations with hundreds of different SaaS subscriptions only a few of them are in that class.
Of course the elephant in the room is that there used to be another alternative, which was buying a tool outright for say $1,000 and then using it indefinitely, which would be a financial win compared to an equivalent $50/month SaaS tool in well under two years. Yes, there are factors like CAPEX vs. OPEX to consider so this isn't so simple either, but ultimately paying much more money for the same thing is still paying much more money, however you slice it.
The other gain you get from having the employee build the tool is that now the employee is better at building these tools, so you fundamentally have a better employee than the one that had to spend the time learning the non-transferable one-off tool.
On the other side of that equation, what you would hope is that your $50/month is buying you a subscription to steadily increased functionality over time. That's something your $1000 up-front payment wouldn't get you, and it helps offset the initial on-boarding costs. It's also probably true that once your one employee has gone through the selection, learning, and purchasing process, getting subsequent users on-boarded is much quicker, because there's someone sat next to them to say "just do it this way".
On the other side of that equation, what you would hope is that your $50/month is buying you a subscription to steadily increased functionality over time.
Some people might hope for that. Personally, if I'm buying a tool for professional use, I want to choose my preferred one and then have it be reliable and future-proof. Things like security updates are one thing, but the last thing I want is random changes in functionality or UI being forced on me.
This worked just fine in the traditional model where you bought a version of some software, and then if there was another version released later with something more that you wanted and adequate compatibility, you bought the upgrade too. The user gets stability and new developments if they want them. The developer gets paid for new developments, though only if they are actually valuable to users. No-one gets forced into anything unexpected changing, or going missing, or breaking compatibility.
Tragically, the whole SaaS, insta-deploy anything we feel like culture that has evolved in recent years has utterly destroyed that stability and reliability. I regard this as possibly the biggest retrograde step in the history of personal computing (and that "possibly" is mostly because the walled garden culture that has also become so powerful in recent years might be a larger backward step).
I don't disagree: there's a reason I prefer Debian Stable on my servers. But when done well, and in the right place, it can be a worthwhile avenue. Github is a pretty good example: they've not stood still (ok, they also haven't moved that fast either), but the core of what worked 10 years ago still works today.
It's easy to say "yes" and difficult to say "no". Becoming a financial steward comes by first saying "no" and only saying "yes" when the ROI worksheet is filled out, completed, and approved. If you want your manager to approve spending some money on tools you can help them by filling out your own preliminary ROI worksheet to show them why you think it's a no-brainer.
Buying a $5/mo subscription by accident, forgetting about it for years, and getting 0 value in return is cheaper than training on a formal purchase system, filling out a ROI sheet, and ping-ponging it back and forth in a few meetings before "responsibly" deciding not to buy.
Giving individual contributors purchase authority and then supervising spend -- the model implemented in every major cloud -- is a much better compromise, because it lets management prioritize where they spend ROI calculation cycles which are not free. Very not free!
What if that SAAS is data mining you though and your company secrets are leaking out? Or claiming some sort of ownership over content you post within it? I don’t know anyone who reads the privacy policies and TOS of those apps but tech companies just let their teams use what they like.
It’s hard to find a good SAAS privacy policy actually, and they target businesses who are theoretically more “serious” than individuals
2. Enter cost per engineer of product (subscription, one time, etc.).
3. Enter required minutes to make worth your time (setup per employee can be factored in).
This may already exist, but if it doesn't it could be a useful tool for Saas companies. Something you could drop into emails to potential customers ("see how much you would save").
I have a spreadsheet at work that does this for manual tasks. It calculates minutes to perform the task X # employees X yearly frequency of task.
Once I've plugged in the values, I go back and ask if we really want to spend 30 hours a year updating intranet employee profiles or if we should use that time to fix some bugs or code a new feature.
Its quite effective to pushing back on unneeded tasks.
I don't think the problem is people at the executive level. It's that all kinds of teams across the org are paying for Saas products and it adds up over time. The other problem is that 15 teams might be paying for small group Slack (insert Saas here) licenses when they should be on a single corporate plan. Ironically I believe there is a startup that looks at accounting and located duplicate licenses.
Hard to find for sure. There was a time though when we didn't pay CEO's & professional managers 500x as much as the lowest paid employee. When we did that we still managed to go to the moon, split the atom, develop computers, create antibiotics, and lots of other neat things.
Do you have evidence for your assertion? Of what significance is the ratio of highest to lowest paid employee? Shareholders of a particular company pay CEOs, not whoever "we" is.
Producing more value than you are compensated for ... hmmm what does that sound like? You could say it sounds like the human condition. Which employees in the pyramid do you think have the worst scalar here?
This may be true for CEO’s turning dysfunctional companies around on personal authority, but I find it hard to believe for companies that are already running perfectly well.
I have yet to encounter a manager who motivates me to get up and find a way to eat that day.
Just because they are there doesn’t mean the achievements are due to them.
There have been a number of attempts, tens of millions of dollars spent on one study alone, trying to quantify what technologies and people generate value.
The meta-conclusion considering all the studies I know of (traveling and not looking them up), is the math becomes so Byzantine it’s a pointless measure and we should just stick with ideology to avoid blowing up society in people’s minds (an idea that was peddled for thousands of years already, reaffirmed by math, glad we spent the time on it.)
Just because we’ve emotionally conditioned ourselves to engage our mechanical agency towards these ends does not imply it’s because of management.
Hm. Allocating credit for achievements is a tricky thing.
Management is necessary to allocate resources (including labor) efficiently at scale, but it comes with overhead.
As such, at smaller companies, startups, small businesses, the overhead of management can be outsized, the pain felt acutely when compared relatively to the actual output of ICs and such.
At larger companies, the massive cadre of management which is necessary to keep the machine running is also very obvious, as the overhead of a large organization is very large, even if the management itself is excellent and highly efficient.
As such... How does one allocate credit? An analogy would be like financing or investment. Necessary. A filtering mechanism. Sometimes helpful in an advisory mechanism. But are they the ones creating output? No. But do they deserve some credit? If something cannot be done without it, then they must deserve SOME credit, it's just a question of how much.
Why does society have to optimize at scale for assigning credit to a minority? If anything the studies show value is emotionally subjective.
A healthy society takes a village. IMO there’s plenty of literal history to show isolating a minority from the demands the rest of us face is ripe for abuse at scale.
One person did not invent languages, lay down the highways and invent computers.
All the people we hold up relied not just on the historical invention to push them forward but society giving them space and not killing them. Every individual inventor is outnumbered.
IMO that space to be and do is what we should optimize for. Not a tether to tradition of emotionally wanking off a handful over what is ultimately a linguistic twist on an idea that was discovered/defined collectively
Valve is, by all accounts, a toxic cesspit that's ruled by various influential cabals. They still have a hierarchy, they just aren't explicit about it.
At least for Medium, "Holacracy" pretty much imploded. Zsppos switched from it to an internal marketplace - which is, oddly, controlled by excecutives.
Flat organizations beyond a certain size either move away from flatness officially, create unacknowledged hierarchy, or fail. I'm really not aware of a single large-scale example that still works.
This is much different for small orgs - there's something about org size that requires some sort of centralization. (I think it's communications overhead + complexity exceeding the limit of what a single person can keep in their mind. I'm not 100% convinced, but these are the pressure points I usually see)
The video game sector is unstable and toxic. IMO, Valve compares favorably to other video game companies as for one thing it’s still in business.
Flat organizations are unusual, but survive about as well as other similar organizations. The difference is when a giant reorganization/buyout etc hits, they more obviously change into something else.
“without” is the wrong word: you need managers but they need to have incentives which align with the actual business and accountability. Most companies have problems with at least one of the two, which is a loss but usually indirect enough that it's easy to excuse or deflect.
You mean the companies where executives use extensive corporate speak and pull deadlines out of their asses, without checking in with the experts on the ground, triggering office heroics down in the trenches. We'll do it - we all get rent to pay.
Yeah, you can fake through it more than half of the time, comfortably. Just be eloquent, tall, and loud.
Has Valve done anything noteworthy in the last 10 years besides milking the Steam store? Their half-baked console seemed like an attempt to do more of the former.
I know you are trying to be snarky but Valve has accomplished a hell of a lot more than most startups ever will. They are far from perfect (hell, they’re known for bugs and their famously poor timelines, and I heard their game Artifact was not good,) but it’s pretty bizarre to suggest they do nothing. Maintaining Steam alone is huge. It’s hard to find a platform with more vigorous fanboys for good reason.
But that all aside... I mean they have a new Half Life game on the near term horizon (later this month apparently) and they have done a ton of work on VR and Linux support.
Summary: the game was brilliant ("uniquely amazing") if you were really good at it but was essentially impossible to get into, and its economy was badly constructed.
Yes, it is. Keeping Steam growing and well-liked is an achievement in itself. They never really stood still with it.
Steam certainly challenged the status quo when it was released, and several times in its life.
Hell, who else is working on Linux gaming right now? They were relatively early on game streaming, VR. Steam Workshop? How cool is it that a large amount of one of their flagship games, Team Fortress 2, not only integrated a lot of third party content, but also paid creators back? How cool is it that many games like Counter Strike began as Half Life mods?
I don’t really use Steam much anymore, so it’s not that I’m personally attached much, but I will admit to being pretty impressed.
Is this sarcasm? Steam has been the only consistent video game Cloud SAAS in the past 10 years.Can you name one time that the service was down without warning/proper recourse, had a data breach, exceeded SLAs, etc?
Also, valve's ther ventures are....massively successful. The microtransaction model in gaming originated with Valve, and now the entire mobile and freemium gaming markets use that business model.
So in this case...I would say yes, everything valve has done as a company trying to make money in the last 10 years is par for other successful SAAS platforms.
The title of this thread is "Companies fret as costs soar for software subscriptions", and this comment thread delved into cloud SAAS providers with a flat org structure.
Steam/valve was brought up because they have a successful cloud SASS model with no subscriptions oand a flat org structure.
Xbox live has a subscription fee since day 1, is maintained by MS (the definition of "non-flat organizational structure"), and is vendor locked. Not even remotely comparable.
We got well over $80k into manpower on optimizing our self-hosted app for resources so that we didn't have to tell less than a dozen big customers to upgrade their hardware before people stopped laughing right in my face for suggesting we just buy them some new rackmount equipment as a gift...
That project died the following year, and I believe the opportunity costs of that work were substantially responsible for the demise.
Lol, I do this. My customers would often try to run my software on dusty old servers and then complain that it's slow, so now I just send them the hardware for free.
Different team, we did a cluster install and they were getting 10% of our advertised transaction rate. Something was clearly off. I commented “did they plug the whole thing into a 10Mb hub?”
They had. We sent someone eight timezones away to find that out.
>Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month.
Sure, but then there's the slightly more complicated economic calculus: do we build our own tooling now, for a significant up front cost, or do we buy the SaaS which we might use essentially forever for an unknown future TCO?
How often do you build in house tooling or applications that have no ongoing operating commitments?
It's upfront capital investment plus generally unpredictable maintenance vs. More predictable but maybe higher operating expenses
I don't know if more predictable is all that accurate. SaaS providers change functionality and UX regularly and that often breaks workflows. Then you have the ones that shut down or get bought out and then substantially change their offerings. Then there are those services that would have been private to an intranet, but are now public, and they get compromised.
I don't think it's clear-cut. Some SaaS has worked out remarkably well for me and others I wish I had just built the thing in-house. Also, few providers give a way to actually get your data back out in a usable fashion, so you tend to get locked in without substantial cost to back out.
Nothing complicated about it. You start with SaaS, validate it's a good tool to have/actually used, evaluate monthly costs vs opportunity costs, build your own when/if it makes sense.
The slightly more complicated question is "do we invest in optimizing SaaS costs/utilization? Or use those resources to start building our own?". But even for this question the right answer is usually fairly obvious.
If it was so easy, why are the companies in the article "fretting"? Because putting values on "good", "opportunity" and "makes sense" (not even counting the fact you have no control over the SaaS raising prices or going out of business in the future) is harder than we can spend $400/month or $50/month.
It is complicated at scale and over time though. Look at Saas infrastructure: How you do it as you grow constantly changes the results of any evaluation.
Then what happens is somebody making $100+/hour would spend several hours to do the job that would be covered by a tool that costs under $50/month.