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> We have become a rent-seeking society It just dawned on me while reading the article that this accurately describes the shift from licensed software to SaaS

> We have become a rent-seeking society It just dawned on me while reading the article that this accurately describes the shift from licensed software to SaaS that has been happening in the past decade.

savanaly 9y ago
That's not what rent seeking means in this context. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking
- frgtpsswrdlame 9y ago
  Eh, it still applies. There's plenty of articles that have been posted here talking about how the real way to make money is SaaS, not on-prem. In that context, the provider is making more profit with no further innovation, in fact the only thing they've added is a limitation. To quote from your link: Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.[5] Now maybe, the program used to be $40 and not free but switching to $20 a month is definitely rent-seeking.
  - yannyu 9y ago
    To universally label the move from on-prem, perpetual licensing to SaaS as pure rent-seeking is to misunderstand how different kinds of software products are purchased and used by different users. As far as enterprise/business customers go, SaaS has been huge in reducing vendor lock-in and enabling customers to choose the best fit for their use case. SaaS has removed the huge costs of PoCs and initial adoption, meaning it's easier to evaluate vendors and switch when you're ready. You no longer have to buy the hardware to get the service up and running, or allocate as many employees to maintain the hardware and software. The explosion of vendors and competition in the SaaS space has forced more interoperability and customer-focused feature development than ever before. SaaS has been great for pretty much all business customers. At this point, I don't think any but the largest companies, most specialized companies would rather build their own services at this point than try to purchase off the shelf when possible.
    - frgtpsswrdlame 9y ago
      Damn I got a buzzword bingo on your second paragraph, holy crap man. Do you think a toll-road operator couldn't also describe all the benefits of a toll-road? Does that make it not rent-seeking? Look, we're on a (at least mildly) technical forum, we can be honest here - SaaS has been great for providers and sometimes great for customers. And I'm not talking about off-the-shelf vs built-in-house, I'm talking about billing method.
      - yannyu 9y ago
        You can attack the presentation of the content, but do you think anyone wants to go back to the days of dealing with Oracle and SAP charging you for perpetual license and support, and then also needing consulting by the hour from them or a Deloitte/Accenture? Things really sucked in enterprise software in the 90s, and SaaS has made a lot of things so much better. And I'm not talking about off-the-shelf vs built-in-house, I'm talking about billing method. In many cases, the billing method has influenced the way the products work and how they're developed.
wu-ikkyu 9y ago
The digital landscape seems to be growing increasingly feudalistic. Users have increasingly less control over the products and services they use. -Instead of buying a movie or a song, you stream it -You don't own your data in the cloud -You don't own the music you buy from Apple -You can't even take the battery out of many newer model phones
- deusum 9y ago
  feudalism n. A political and economic system of Europe from the 9th to about the 15th century, based on the holding of all land in fief or fee and the resulting relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture.
  - wu-ikkyu 9y ago
    Seems like an apt description of tech giants like Facebook, Google, and Apple. Consider the inordinate attention (~homage) and data forfeiture which billions of people submit to those walled gardens (fiefs). It seems symbolic that so many spend so much of their day with their heads bowed down towards their phone.
  - trophycase 9y ago
    Parent clearly means feudalism in the abstract sense.
    - deusum 9y ago
      Honestly, I searched for the definition expecting to disagree. I posted it when I realized parent was right, and figured I'm not the only person who hasn't studied feudalism in a while.
- CaptSpify 9y ago
  I don't think he came up with the term, but: https://www.schneier.com/blog/archives/2012/12/feudal_sec.html https://www.schneier.com/blog/archives/2012/12/feudal_sec.ht...
chasing 9y ago
That's paying for a service, not rent-seeking.
L_Rahman 9y ago
SaaS is essentially an acknowledgement that the most profitable and extractive business model in modern capitalism is to build a capital intensive product and rent it out. With software there is the added benefit of low-cost, highly scalable replication of the capital intensive product.
zanny 9y ago
Intellectual property in general is rent seeking. The fixed costs of producing IP are on the hands of creators, who often use third parties (or parent companies) that act as middle men who take fixed resources and extract infinite revenue from them through rent seeking on either licenses or subscriptions. This is how all the stores selling IP make so much money, how all the streaming services are so profitable, etc all while not producing any original content themselves. And it applies to creators who direct sell themselves, because they aren't charging marginal costs on IP licenses - they are rent seeking their existing properties. Often to fund the creation of new ones, but I don't think many people argue the morality of rent seeking based on how the owner spends the rent. Any landlord can invest the rents they collect into new building construction, but that will still just lead to generating more rents.

savanaly 9y ago

That's not what rent seeking means in this context. https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking

frgtpsswrdlame 9y ago
Eh, it still applies. There's plenty of articles that have been posted here talking about how the real way to make money is SaaS, not on-prem. In that context, the provider is making more profit with no further innovation, in fact the only thing they've added is a limitation. To quote from your link: Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.[5] Now maybe, the program used to be $40 and not free but switching to $20 a month is definitely rent-seeking.
- yannyu 9y ago
  To universally label the move from on-prem, perpetual licensing to SaaS as pure rent-seeking is to misunderstand how different kinds of software products are purchased and used by different users. As far as enterprise/business customers go, SaaS has been huge in reducing vendor lock-in and enabling customers to choose the best fit for their use case. SaaS has removed the huge costs of PoCs and initial adoption, meaning it's easier to evaluate vendors and switch when you're ready. You no longer have to buy the hardware to get the service up and running, or allocate as many employees to maintain the hardware and software. The explosion of vendors and competition in the SaaS space has forced more interoperability and customer-focused feature development than ever before. SaaS has been great for pretty much all business customers. At this point, I don't think any but the largest companies, most specialized companies would rather build their own services at this point than try to purchase off the shelf when possible.
  - frgtpsswrdlame 9y ago
    Damn I got a buzzword bingo on your second paragraph, holy crap man. Do you think a toll-road operator couldn't also describe all the benefits of a toll-road? Does that make it not rent-seeking? Look, we're on a (at least mildly) technical forum, we can be honest here - SaaS has been great for providers and sometimes great for customers. And I'm not talking about off-the-shelf vs built-in-house, I'm talking about billing method.
    - yannyu 9y ago
      You can attack the presentation of the content, but do you think anyone wants to go back to the days of dealing with Oracle and SAP charging you for perpetual license and support, and then also needing consulting by the hour from them or a Deloitte/Accenture? Things really sucked in enterprise software in the 90s, and SaaS has made a lot of things so much better. And I'm not talking about off-the-shelf vs built-in-house, I'm talking about billing method. In many cases, the billing method has influenced the way the products work and how they're developed.

wu-ikkyu 9y ago

The digital landscape seems to be growing increasingly feudalistic. Users have increasingly less control over the products and services they use. -Instead of buying a movie or a song, you stream it -You don't own your data in the cloud -You don't own the music you buy from Apple -You can't even take the battery out of many newer model phones

deusum 9y ago
feudalism n. A political and economic system of Europe from the 9th to about the 15th century, based on the holding of all land in fief or fee and the resulting relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture.
- wu-ikkyu 9y ago
  Seems like an apt description of tech giants like Facebook, Google, and Apple. Consider the inordinate attention (~homage) and data forfeiture which billions of people submit to those walled gardens (fiefs). It seems symbolic that so many spend so much of their day with their heads bowed down towards their phone.
- trophycase 9y ago
  Parent clearly means feudalism in the abstract sense.
  - deusum 9y ago
    Honestly, I searched for the definition expecting to disagree. I posted it when I realized parent was right, and figured I'm not the only person who hasn't studied feudalism in a while.
CaptSpify 9y ago
I don't think he came up with the term, but: https://www.schneier.com/blog/archives/2012/12/feudal_sec.html https://www.schneier.com/blog/archives/2012/12/feudal_sec.ht...

chasing 9y ago

That's paying for a service, not rent-seeking.

L_Rahman 9y ago

SaaS is essentially an acknowledgement that the most profitable and extractive business model in modern capitalism is to build a capital intensive product and rent it out. With software there is the added benefit of low-cost, highly scalable replication of the capital intensive product.

zanny 9y ago

Intellectual property in general is rent seeking. The fixed costs of producing IP are on the hands of creators, who often use third parties (or parent companies) that act as middle men who take fixed resources and extract infinite revenue from them through rent seeking on either licenses or subscriptions. This is how all the stores selling IP make so much money, how all the streaming services are so profitable, etc all while not producing any original content themselves. And it applies to creators who direct sell themselves, because they aren't charging marginal costs on IP licenses - they are rent seeking their existing properties. Often to fund the creation of new ones, but I don't think many people argue the morality of rent seeking based on how the owner spends the rent. Any landlord can invest the rents they collect into new building construction, but that will still just lead to generating more rents.