[Alupis]

There's a lot of unnecessary costs listed. For example, they spend $165.00 on dropbox for the team, but also use Gmail services (meaning they have Google accounts which come with a free 10GB of storage).

The tier of MailChimp they use implies their list is in excess of 110,000 subscribers, and since I do a lot of email marketing for my company, I can guess their open rate is probably somewhere in the 10-20% range, so they are throwing money away on emails that go to spam boxes or never get opened/engaged.

They use a 3rd party team chat service instead of hosting their own local XMPP service (this is a non-critical service I would wager, and could afford some downtime if the server needed maintenance).

All in all, they are spending a lot on things that aren't really necessary. They could bring some of those things in-house and probably save a lot per year as well (low-critical things that would require minimal maintenance).

This is not even mentioning the lack of flexibility they get locked into by using only 3rd party solutions. I've seen this at my company for the few external things we do depend on -- you end up building business practices around the 3rd party service, which may or may not be optimal or how you would normally do things. Having that flexibility, and assurance that service X doesn't go away tomorrow really can improve work-flows and peace of mind.

Seems their business is based entirely around other 3rd parties ... something that would make my company very nervous to say the least.

[cm2012]

Paying someone to micromanage the services to get cost savings would cost at least $60,000 a year and make the company lose focus. There's no way digging into the details of the Mailchimp spend structure, for instance, is worth the time.

[Alupis]

> 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.

[corkill]

They aren't trying to reduce costs, they are trying to focus on their product and growing their company.

[Alupis]

That's fine so long as the money flows nice, but if/when things get tougher, they will have to scramble to find a solution.

There's 2 sides to this business -- the technical/development side, and the business side. The business side should very much care about not wasting money unnecessarily, even during the good times.

~~~~~~~

But it's not just about saving money -- the company has almost zero flexibility when using all 3rd party solutions. If a vendor pushes an update tomorrow and it radically changes the product and causes a large disruption (it happens), or a vendor goes under tomorrow, or [insert dooms-day scenario here], the company will be left scrambling.

Using 3rd party services also forces the company to build business routines/practices around their current inflexible environment -- so if they do have to switch vendors at some point, they will have to likely reinvent business routines/practices too. For some companies/services, that is not a problem -- for others, well, some companies have gone under during major core software changes (imagine your warehouse management system having to change suddenly and unexpectedly).

Just like software engineers try to minimize external dependencies unless the dependency is absolutely necessary -- businesses should too.

[roel_v]

"The business side should very much care about not wasting money unnecessarily, even during the good times."

How many businesses have you run?

[kaolinite]

Very few of these services can easily be replaced. You mention OpenFire XMPP - it has very few of the features that Flowdock has and is more of an effort to set up for end-users (compared with downloading an app or logging in on a website). You'd end up at most paying slightly less for a bunch of services with fewer features, at great disruption to your business.

[Argorak]

For many companies, the chat is critical. Also, if one person has to fix the chat for 1 hour a month, you are easily paying more for that person then for the external service.

I would question that hosting in-house would be cheaper. As stated in other threads: that's less then the cost of an employee qualified to run all those services.

[teacup50]

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.