We spent 2 manic weeks scrambling to implement alternatives but we have now done so and in the process saved ourselves several hundred thousand bucks and got arguably better systems as a result.
Lean doesn’t have to mean poor.
They did this to me and I was shocked and disappointed, especially since their entire business model is to become the plumbing between your different systems. Seems predatory.
The only thing that really stood out to me was the Google storage price increase, which seems rather large, as in way out of line in comparison to our 2023 spend and 2024 budgeting.
It would also be nice to see what exactly is meant by SaaS vs presumably IaaS. I.e. would Amazon Glacier (random selection since we've been comparing the pricing with tape recently) fall under their definition of SaaS.
Someone like Google cannot ever lose data of any customer. So if you pay for 1GB of storage, they probably actually store 5GB of data or more for you. It will be redundantly stored within the datacenter across different racks, but also stored (also redundantly) in different datacenters in case of flood/fire. Theres probably a copy on tape incase of a catastrophic software bug that wipes all the drives. Or two copies on tape because if there were a software bug that wiped all the drives, the chances that every single tape was readable for a restore is low - so more redundancy needed.
However, if you go for a smaller player, they probably still keep multiple copies of your data, but it might be a RAID-5 -like setup, requiring only 1.3GB of storage for each GB you store with them. It can survive a drive failure, but two drive failures or a datacenter fire or an engineer fat-fingering an erase-all command and your data is all gone.
Thats (part of) why the big players charge so much for storage. I actually wish I could choose less reliable yet far cheaper storage option with a big player, but they don't want to offer that because of the PR hit when they do lose customer data.
It doesn't explain a huge percentage increase though. Presumably they (Google) were already doing due diligence there with respect to reliability.
Essentially agreeing with you on all those points though. Especially the bit about the PR hit. It's a constant factor in our budgeting with the understanding that if you "lose the backups", you are probably out of a job.
The actual factor is most likely around 1.4-1.5x and for sure can’t be any more than 2.2x in this day and age. Dumbest possible implementation will be “only” 3x so no it’s nowhere close to 5gb
Edit: looks like it’s public so i can actually tell you that google uses RS 3,2 which gives 1.5 replication factor. When i was there a few years ago storage folks told me they never lost a single stripe of data
We also used cheap supermicro and had no service contracts or warranties we had on site staff. Their salaries were included.
Small DC 2mw.
These are the drivers I’ve seen, with cost a distant third, fourth or fifth. Can’t wait to see what happens this economic cycle.
I know “nobody got fired for choosing AWS” but the real value seems to be in burst loads. If you have predictable, stable workloads I can see on prem or hybrid making more sense.
If a SaaS product is $100k per year (subscription) the equivalent perpetual license cost is probably $200k (one off) + $40k annual maintenance (my very rough rule of thumb after doing lots of tenders - a perpetual license is usually two years of the subscription fee plus 20% of the perpetual license cost as support fees).
You won't find any, not easily anyway. The world of enterprise SaaS follows a different business model that I refer to as «hiding the dead horse in the cloud» and holding the customer to ransom.
The premise: the customer is already locked into the wares the vendor supplies, and the customer can't easily migrate away from the product. Oftentimes, the product is also ridden with the technical debt, but it either has a feature critical to the business or there are multiple business (and technical) processes that have a deeply ingrained reliance on the product. It is either the data or the integration with the product. Regularly both.
The vendor repackages the product («the dead horse») as a SaaS, rolls it out into the cloud (the act of hiding the said dead horse), bumps prices up and slips the bill under the customer's front door (the ransom). Cloud costs are passed onto the customer at a markup. The product (and sometimes the customer) might get minor tangible benefits from the repackaged version, e.g. improved availability and reliability, although even that is not always the case. SaaS products typically do not use native cloud services, they run on EC2 instances (or their equivalent in Azure, less often GCP) and are cobbled together just enough to make them not fall apart.
SaaS, as a business model, is not about the engineering excellence most of the time. It is about squeezing the last drop of blood that there is left in a legacy product, now being offered as a shiny-shiny SaaS version («hey, lookie, we are also int the cloud!»). This is the reality.
The theory is somewhat different. In between 2000s and 2020 (approximately), vendors used to tailor their products to specific needs of each specific customer which increasingly became difficult to maintain, update and upgrade as there would be no single product titled «ABC», there would a «ABC customised/hand-rolled for customer 123», «ABC customised/hand-rolled for customer 456» and so forth. So the original premise of SaaS was to have a single version of the product for ALL customers that exposes simple data centric and whatever other technical interfaces that the customer would hook into. The enterprise world does not work that way, though.
There are positive exceptions in the world of SaaS, and almost all of them are in the startup universe and outside the enterprise.
From the start though they offered more expensive to run features (a consistent list api, 1GBit transfer per file vs 100mbit for S3 at the time, Glacier-like storage with instant retrieval).
I think this pricing jump is mostly pricing it at what it always should have been. Plus a bit of the now being so focused on enterprises that the list price means less and its all about "call sales for more information".
S3 has built most of those features since then though, without a price increase.
Many (most? Except maybe asana) public SaaS companies have 20% cost of revenue AFAIK
Source: https://blossomstreetventures.medium.com/q1-saas-metrics-dat...
I guess they are betting that R&D costs are fixed(ish) or at least will grow slower than revenue. Which of course doesn’t always work, especially over the last few years where free money resulted in massive bloat.
(Feel free to modify the name to something less clunky.)
A SaaS can provide a useful tradeoff. Just don't get scared by FUD marketing tactics, like "Why you shouldn't build your own X" etc. It's a tradeoff: you introduce an external dependency and give up control.
I think this is why self-hostable solutions are becoming more common.
When a solution is self-hostable, both sides win.
The SaaS provider can operate the solution, which offers revenue. Customers like it because they can get going quickly.
Or the customer can host it. This allows them to control where the data goes and minimize costs. I like the way this tweet puts it "The real reason to buy SAAS is for someone else to do the ops work"[0].
In both cases the customer benefits from the continued development of the software (similar to how a library improving benefits all applications which depend on the library).
And the ability to self-host removes a business risk. If the SaaS vendor fails, well, we have to support it ourselves. If it is OSS or we have the code in escrow, all the better.
[0]: https://twitter.com/rickasaurus/status/1700697140492648454
I think that transition costs are high and they’ll find that some customers will stick with them even with higher prices.
It's the basic economics of SaaS, endoflife was just too soon.
This is such a frustrating perspective. I have so much respect for people who build projects and companies with a profit margin that lets them earn a comfortable living, without trying to extract as much as they possibly can from everyone around them.
The basic premise is that in a very resource constrained environment, there’s never enough money to invest in infrastructure and the continuous improvement of process and product. This affects most vendors that serve the nonprofit market exclusively. The price you can charge your customers lets you earn a modest profit and pay your employees, but eventually your chronic lack of resources to invest in your people and product kills your business when a fresh product with fresh funding comes onto the market. The cycle then repeats as that new vendor is unable to make the investments needed to keep up with the broader industry state of the art.
So file this under one of those things that sounds nice in theory but kills your business as competitors eat your lunch in practice.
For example, you are bidding for a business, and buyer A models max profit/lowest costs, and buyer B models less profit/higher costs (such as paying employees more), buyer A is going to be able to offer more money and secure the asset.
Personally, I find the ballgame price exploitive, but the food truck has added a bunch of convenience (and a few pennies of refrigeration cost) and that's worth paying $0.85 extra to a lot of people.
You can translate "the market can afford" to "customers are still paying".
Amazon/Google/Microsoft/IBM et al. all know this, it's why there are significant incentives if they know you can walk.
A shame companies started being greedy in 2023.
Or just keep raising the bar and watch people go crazy because you already have something like 1% of all the money ever printed. Why? For the sheer cruelty of it, seems to be a good answer.
A lot of decisions being made at the moment seem to be 'we could be empathetic and kind but where's the fun in that, lets rinse them out like rags' type of decisions.
With diminishing access to venture capital we see companies go to the greed phase faster than usual.
Nothing? Well that seat would vanish pretty quickly.
This was after several years of using Google's tools (though not with the same level of commitment -- we still used Office, and had Exchange and AD on premises). Google jacked their prices for Workplace so that was the motivation to move to Microsoft. I fully expect Microsoft to do the same, in another year or two, but this time around I don't think we'll change -- this time we're too invested, it would be too big a project and have too many ancillary costs.
If we had been more "all in" on Google, we probably would have just paid the increase.
Price always has nothing to do with input costs. That is not unique to SaaS.
CTOs get lots of free credits, downsize their infra staffing.
Start using the basic building blocks, but then of the basic building blocks (servers & storage) are marked up and expensive.
Next, to find cost savings their org need to move deeper and deeper into alphabet soup of cloud vendor proprietary stack, at which point they are locked in.
Now SaaS and cloud is free to squeeze as hard as they want. The lock in is strong.
Saw this coming miles away. Nobody listened of course. This industry worships fads. When the buzz becomes “everyone is doing X” it becomes truly hard not to do it too. All your bosses, employees, investors, etc push for it.
You’re not going all cloud? What are you? Old?
For example, you can't lose data in the cloud. There are very much operational mistakes you can make with combinations of S3 settings around versioning and deletes, that result in permanent irretrievable dataloss.
My last shop managed to do this and then was implementing some sort of cloud data backup scheme.. in the cloud, lol.
The other assumption is that sure compute is costly, but since you can spin it up&down you'll save so much. As it turns out, most apps, most of the time, do not have bursty use cases that merit paying 2-3x for compute in hopes of spinning it down when idle. The funny thing is the same people selling this line are also the ones telling you to negotiate savings with some of those annual agreements that require a minimum amount of compute/spend.
The last one is assumptions about hockey stick compute growth needs, and that of course choosing AWS will make this easier than having to constantly procure servers. Maybe! But few have hockey stick compute growth needs for long. And it's not that impossible to trade your servers out every 18 months to get your compute density growth. And you aren't always guaranteed AWS compute at prices you want, as we've seen shortages of certain classes compute and needs to reserve up front, etc.
On the other hand now they are free to concentrate their labor on their core business and competencies. Why on earth would they want to tie up payroll and benefits on people running the company email?
So, after all these years of hearing "who cares about performance and cost - just buy more engineers, CPU, and memory", gravity is once again being the bitch that it is.
The big mistake most companies made is that they applied the old-school "Fortune 500" way of company building to software businesses (i.e., bigger is better). Humorous, because the promise of software was that it reduced the need for that behavior.
The end result is that they've built companies which ironically have great margins (or at least, should), but they burn cash like they're still in their seed round. Even worse, this behavior pushes out most of the early talent which means you need ever-more people to fill in the skill gap created by hiring lower quality talent. This also creates the problem of a once-great product deteriorating into mediocrity over time which also threatens grip on market share.
The whole phenomenon of huge SaaS companies with huge prices and huge workforces seems like a zero interest rate phenomenon.
Not that there hasn't been inflation, but prices have gone up much more in the last year than inflation itself has. Inflation is 3.2%, lower than the 100-year average in the U.S. It was higher a year ago, but still only about 9%. All of the price increases in that article are significantly higher than that, most are multiples of that. Even if they hadn't raised their prices for a few years prior, that still doesn't add up. I don't buy inflation as a valid excuse, though I would it as an invalid excuse they're still using because people perceive it as true.
Increased interest rates have meant an end to cheap credit and put a damper on stock prices.
Companies are trying to shore up their valuation by signalling to investors that they are driving towards profitability rather than debt-driven growth. This means raising the price of their product and cutting costs (ie layoffs).
That's because nobody is calling the administration to task for allowing the REAL cause of recent spiraling costs: monopoly and oligopoly. This is straight-up corporate profiteering and price-gouging. It's infuriating to see the dereliction of the press's duty in its failure to demand answers, and to regurgitate embarrassing circular "logic" by saying "higher prices are driving inflation!"
In other news: The heat is driving up temperatures around the world.
https://www.abs.gov.au/statistics/economy/price-indexes-and-...
Here is the latest quarter and each element's contribution https://www.abs.gov.au/statistics/economy/price-indexes-and-...
I red somewhere that 80% of dollars were printed (=made up digitally) in the last 3 years. so the inflation is now coming fast, 1$ = 20$.. that's 5x the prices. And most common things have only gone up 50 to 150%.. more to come
Doesn't seem like it [0]:
> [...] so it printed about 8% of the currency. An approximately equal amount of currency was destroyed
> The reason for the sharp upturn in M1 in 2020 is that the measure was redefined in May 2020
