[jariel]

This is questionable advice.

1) Any SaaS that actually provides values is probably worth 10-100x what it costs.

Of course, it doesn't mean they all provide value.

There's a mistake in your comment ('we stopped using them and didn't miss them') which is the assumption that SaaS doesn't provide value, which is obviously not the case.

Good tech is an amplifier - that's why it exists.

You're telling the farmer don't spend money on fancy tractors, toil the land with a sickle.

For every $ you spend, the idea is that you are generating ROI, ergo, you want to spend more.

If this 4-person team is hauling in $400K/year it's precisely because of those tools, without which they literally might not be able to do it.

So the advice there should be:

"Don't use the things that don't help, definitely use the things that do"

2) The mindset of 'FOSS is Free' is completely wrong.

Every tech has a 'total cost of ownership' and if you have to spend any time at all installing, fussing with, maintaining it - it's probably worth paying for a SaaS.

$5/month is literally 5 minutes of an employees time.

Think about that: if the SaaS saves you 5 minutes - it's worth it - OR - if the FOSS takes more than 5 minutes a month in over head, it's not worth it.

One of the many reasons that Windows dominates Linux (it's more complicated obviously) - is that Windows is somewhat easier to use and support out of the box. So if Windows saves a single support issue per year, per user - then it's worth it.

3) Data Ownership - like everything, the pragmatic reality of the situation matters more than ideology.

So many factors: security, integrity of host, does the data have 'long term value' (do you need granular data from 5 years ago?).

Do you really think that your home-baked file server in the corner hosting your shared documents is more secure, supportable, maintainable, lower cost than the SaaS?

Maybe - but probably not.

Summary: invest in things that are materially useful to your operations, and if they do 'help' they are probably worth quite a lot but have the self awareness to not get addicted to 'distracting' SaaS, and make pragmatic decisions about what data will sit in the cloud and why, and finally you can still push vendors to provide more 'controlled' data scenarios, such as co-locating services that they run etc.

[prepend]

My issue is that value based pricing sets up incentives against one of the coolest parts of software and digital goods- near zero marginal costs. Software is kind of magical in that once produced it doesn’t cost much to add a second or billionth user. Of course SaaS has more costs, but not nearly as much as the “charge 5% of value” or whatever.

So I think it’s foolish to not buy tractors and till the land by hand, it’s also foolish to think of a hammer as a value add so that the cost should be 5% of the benefit gained by using it instead of some reasonable profit on top of cost. I’ve bought some plumbing tools decades ago that are really useful, they are well made and should last decades more. Saying that I should pay based on value might make sense but isn’t a good user strategy in the long term.

[jariel]

So that's a fair point ... but 1) 'value based' pricing is inherently part of capitalism, and it's more or less a 'good thing' ... and 2) the upside in general is still pretty huge for most services. The fact that software has 'zero unit cost' is for the most part, built into the price.

It's the reason you can try 100 services for free before buying. The challenge is, to find things that really work for you and that do provide value.

[nytgop77]

Your summary is totally right. But first part of the comment feels too one-sided (pro-saas). So couple of balancing thoughts for each point.

(1). Tractor analogy seems too extreme - it's about skiping automation in farming. But if one skips saas, one still automates in house (the amplifier is the automation). Also, frequently "saas" feels less like "tech" and more like "outsourcing".

(2) Total cost of ownership applies to saas as well. Lawyer's time for contract. Developer\architect time to figure out documentation, so company would know what configuration to ask for. Communication being external also costs time.

(3) Solutions for data ownership exist, but it's one additional thing to worry about.