How we’re spending $55,930.08 a year on SaaS products (opens in new tab)

There are risks to building in house too: Things will break over time Key programmer leaves, no good documentation or succession plan left behind New needs will arise (e.g. if you built an expense tracking app before smartphones, you'll now need to build a iPhone/Android app) Maintaining security - is your security team really better than the outsourced service's? API support Developer ecosystem

There's always a build vs. buy decision and sometimes you should build, but this is why even huge companies use Salesforce over maintaining an internal CRM.

There's also considerable risk-aversion at large enterprises. Getting themselves into a position of significant dependence on a SaaS provider can be unappealing for at least two reasons, even if the pricing works for them initially: 1. risk that the pricing gets raised significantly, or the business's employee/customer profile changes in a way that raises the price to them significantly; or 2. risk that the SaaS provider goes out of business, is acquired, pivots, or otherwise significantly changes the service.

Building something in-house probably doesn't usually result in a better product up front (and definitely not for less up-front expenditure), but it can reduce some risks and be less constraining to future moves if you own the app.

I realise some of those services aren't directly f(team size), but as a general rule of thumb, f(projects) is a proxy for f(team size).

Likewise, your CircleCI bill is going to be higher with more team members as you mention.

That's all very imprecise, it's not like there will be a direct linear relationship. But close enough compared to Mixpanel etc which scale with f(users) or f(transactions).

So you're saying we need a SaaS service for managing other SaaS services and integrating them and keeping up to date with changes! :p

actually....

> There's no way digging into the details of the Mailchimp spend structure, for instance, is worth the time.

Actually that's one point where you are not correct. For a good email campaign, it's imperative that you manage your list. You need to be looking at stats from the previous campaigns and making changes for future campaigns. If you have a lot of low-engaged/no-engaged emails, you need to try to re-engage them and/or drop them from your list. If you send 1 email a week to an address for 5 years that never opens, you are literally throwing money away. MailChimp (which we use too) has a lot of very good tools to help prune your list and glean a lot of insights into your engagement rates.

> Paying someone to micromanage the services to get cost savings would cost at least $60,000

Not necessarily. Download a copy of Openfire XMPP server, stick it on one of your spare windows/*nix boxes in the corner, and it will run un-maintained for years. Just cron/schedule the OS updates automatically and it takes no more effort/skill than logging into a website to manage user accounts.

And nobody says they need an expensive seasoned SysAdmin to manage these services. Hire a college student for $15-$18 per hour part time to come in and tidy things up.

There are other opportunities to be had with their list of services, such as taking advantage of the drastically lower cost BitBucket (if they must have their source code repo's external).

There's certainly a lot of waste listed here.

I set up OpenFire ~7 years ago for our company, and I think I've spent less than two hours on maintaining it in that time.

Started working on one of those on a conceptual level. The main problem is that some of those services provide no management API nor want to resell, which would be the best source of revenue in my opinion. Without that, you have a glorified "I'm using this/that" list.

What we really need: an idea list manager and an endpoint for all of your ideas.

I don't understand why you would host your source code externally?

You can buy Atlassian Stash, once, for $1800/25 users, and use it forever: https://www.atlassian.com/software/stash/pricing

And yet, you're paying those engineers (and every other employee) to waste their time using N different non-integrated services, all of which change at random whenever a new release is pushed out, disrupting your processes.

I've been involved in this side of a startup 3 different times over a couple decades: IT systems are not a full time job for a startup. They're not even a part time job. They're an every-once-in-a-while type job. At <30 people, all you need is one engineer that can also run a single small internal server. Just one.

Salary is just a part of the total cost of an employee. You have to take into account: recruiting, office space, food, medical insurance, payroll tax, stock options, etc. Usually these things will be equivalent to the salary.

So $55k isn't really enough to hire an engineer, but generally speaking many of these services can be setup in a day or two based on open source software or other free tools. I wonder if you made a clear business case based on the features you need, what the result would be. That being said, not having to run it is worth something.

yes that's the tradeoff/investment, where people differ of opinion and I (very technical person, not management/paper pusher), find it more important to have in-house capabilities (even at higher cost) then to simply rely on a third party vendor.

Plus that you are not making any third party aware of anything, as you don't need them. And might save you a lot of hassle in the middle of the night and you need vendor support, which generally at such hours could generate even more cost.

In my humble opinion, technical pov, the more you do in-house, and the less you rely on third parties, the more freedom the company has.

Also any in-house developed product, could be sold, generating income. Also, i believe, that developing your own, gives you a certain knowledge which you don't get if you are simply adopting third party software.

It's of course way easier/more clear to calculate ROI when you spending specific amounts instead of investing in knowledge, control and self power. The returns on that can very a lot.

But, generally speaking, things are only 'expensive' if you think they are not worth it.