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I think I'd agree. I find SaaS is just outsourcing, and for whatever reason, management types need to come to understand that outsourcing is not always cheaper
by Rury 7y ago
I think I'd agree.
I find SaaS is just outsourcing, and for whatever reason, management types need to come to understand that outsourcing is not always cheaper. It entirely depends on the circumstances.
Most businesses typically see IT as a cost center because they don't understand what IT is. The ones who outsource don't realize that a highly competent IT staff will both cost a lot of money and appear like they aren't working hard or doing a lot. So in the short term it looks like outsourcing (SaaS) is a way for the company to save costs, than doing things in house.
Frankly, the best analogy to SaaS/outsourcing I can think of is leasing cars...
It's cheaper in the short term to lease a car (i.e. outsource), than to buy a car (i.e. "do in house"). However in the long run it's generally cheaper to own a car than lease one. The exception is, if you have a need for a new car every 2-3 years, then leasing will be cheaper than always buying a new one every 2-3 years...
I think the same analogy applies to Renting vs Buying a house.
Anyhow, I'd argue most businesses would be better off in the long run doing things in house, but that requires paying more for upfront for talent (which makes such a prospect seem more expensive at first glance).
- onlyrealcuzzo 7y agoSaaS seems like a trap. Step 1) Offer artificially cheap software to replace employees. Step 2) Attracted by low prices and productivity, employers adopt software. Step 3) Software works. Employers lay off employees. Step 4) SaaS vendor needs to make profit, raises prices significantly. Step 5) Software is no longer cost-effective to employer, but employer doesn't have employees to fall back on.
- patothon 7y agoTalent pool is small and/or hard to access anyway, so even without step 3), as a manager, you always look at ways to do more with less, and SAAS gives you this. It's then a matter of finding the right balance.
- tunesmith 7y agoThis is also part of why I find B2C SaaS so aggravating. Sometimes it feels like there's not a more effective way to get in the way of my retirement plans. I mean, sure, in the prime of my career I like buying a new laptop every year or two, but there will come a time when I want to stop spending and just hold on to my assets until they break. You can't do that with yearly software licenses or subscription services.
- carterehsmith 7y agoSure but you will still be paying property taxes, utilities bills, food and so on. It is not clear just how one would just "stop spending". Unless you want to spend your retirement foraging for food, sleeping under the bridge etc.
- the_watcher 7y agoDo you think that Google Apps is outsourcing? Your company's CRM? The Office licenses that (at least) your finance team depends on? The payments company allowing companies to accept transactions online? "SaaS as outsourcing" is just obviously wrong, as well as "SaaS is rent-seeking" (which seems to entirely misunderstand what "rent-seeking" means).
- Rury 7y agoHah, you apparently don't understand what outsourcing is. It's a simple question of make/buy. All your examples are can be either made in house, or outsourced to someone else to make for you. For example, do we make our own ERP system in house? Or do we use a vendor's (SAP)? Do we pay another company for doing financial transactions, or do we setup our own infrastructure? Companies that use SaaS products are outsourcing a function... Another example: Do we host our own data center, or do outsource and use a cloud SaaS like AWS?