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For me the best example of "rent seeking" is actual rent ;-) You build a building and you rent out rooms in it. It's the initial outlay of capital that you tu

For me the best example of "rent seeking" is actual rent ;-) You build a building and you rent out rooms in it. It's the initial outlay of capital that you turn into a steady income stream without having to put any more work into it. This is in contrast with selling a service where you charge for your labour. My objection to rent seeking with regards to SaaS is similar to what happens with rental properties without regulation: there is a great incentive not to address problems since all labour past the initial capital cost is a cost centre, not a profit centre. Similar to some situations with rental properties, it is also relatively easy for vendors to lock in customers by not providing facilities to move their data somewhere else. As a user of services, I think SaaS is a poor way to offer a service. It's can clearly be a desirable situation for the vendor ;-) Probably that wasn't clear in my previous message.

twic 7y ago
With actual rent, most of what you're charging for is the location, not the building. That's why rents for flats in London or San Fransisco are astronomical, but those for much larger and nicer houses in Chelmsford or Fresno are a fraction as much. The rentier did nothing to create the value of the location, they just bought a slice of it. It's not immediately clear that there is an analogue of location for SaaS. Which is why ytur point about lock-in is interesting. It's not so much that lock-in is part of rent-seeking, so much as that lock-in creates the analogue of "location" needed for rent-seeking (maybe?). Once people are stuck in AWS, Amazon can charge higher prices for shittier services, because people have a reason to be there over and above value for money.