

SaaS Fatigue - sgdesign
http://sachagreif.com/saas-fatigue/

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patio11
I love all HNers dearly, but I have to say, prior to writing off monthly
payments as a model: consider how much you're likely to gain in business from
someone who occasionally buys apps for $10 and thinks $130 is a lot of money
versus how much you're going to lose by not being able to debit the bank
account of a business $200 to $2k a month. (P.S. Neither of those are large
numbers if you are doing something worthwhile for them.)

~~~
sgdesign
Absolutely, I'm sure that in a lot of case SaaS makes perfect financial sense.
I'm just saying it's not ALL the cases.

For example, would it make sense to run Bingo Card Creator as a SaaS?

~~~
patio11
If I got a do-over this would be the first thing I changed. I thought teachers
would rebel against recurring billing because every other education product
did it. It took me five years to spot the logical flaw there...

~~~
sgdesign
Interesting. If you ever do switch, it would be interesting to see what your
customer's reaction is and how much more profitable the SaaS model is compared
to the current one.

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bdunn
People will always pay for things of value - myself included. I run a
consultancy of 10, and I love the tools I use.

\- I pay $100 a month for Harvest

\- I pay $100 a month for Pivotal Tracker (though we're going to be replacing
that shortly with our first SaaS product, <http://projectorpm.com>)

\- I pay $49 a month for Basecamp

\- I pay $39 a month for Flowdock

Are these worth it? Absolutely. I will gladly pay for products that kill the
pain of running a company (invoicing, project-centric communication) and make
me more money (ability to keep tabs on all of my receivables, etc.)

I don't even consider things like Redmine because I don't want to deal with
managing my own infrastructure. For example, it's up to Harvest (in order to
survive) to monitor, backup and provide a reliable service.

The SaaS model isn't going away anytime soon.

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frossie
Ah yes, the good old days where you bought a program and owned it. I remember
those days. They were the same days in which the computing awesomeness
available to us for $117/mo was only accessible to large corporations.

Sure, review your subscriptions periodically to make sure you are getting
value for money. Don't subscribe to services that lock in your data. Aside
from that, it is at the same level as "don't subscribe to magazines that you
don't have time to read".

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xbryanx
If you do go with monthly payment options, PLEASE make it possible to pay for
a full year of months. Part of my fatigue with these services is the monthly
credit card payment paperwork I have to file at our institution for each of
these charges. As we use more and more of these services, the tracking ads up.

SaaS fatigue wish #2...add LDAP support.

~~~
roam
Build something that can expose any LDAP to any web app safely and you'd
probably make millions.

~~~
_sh
Already exists: JBoss Teiid (<http://www.jboss.org/teiid>) virtualizes your
LDAP (and more besides) allowing you to 'safely' expose your directory as a
restricted view. I use it all the time. Haven't made any millions yet, but
I'll keep smiling.

~~~
roam
Key part: "to any web app". You'll need some kind of OAuth provider on top so
people can just plug it in right next to their Google, Twitter or Facebook
providers.

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atomical
If I'm interested in cutting SaaS costs I think the first thing I would cut
was a site that monitors my SaaS bills. But I'm probably not the target
market.

~~~
Dexec
I agree. The whole time I was reading the post all I could think was "Why is
the author ignoring the countless benefits of SaaS?" - Scale indefinitely,
access from any device, no need to install updates, no need for IT department,
etc.

Then you get to the punchline, "You have too many monthly costs. Now add me to
that list so I can help you remove the others!".

Ironically, the least expensive plan on his monitoring service is almost
double the most expensive plan on the list of his own SaaS subscriptions.

~~~
sgdesign
Sorry if I gave off the wrong impression, but I'm not related in any way with
Cloudability. I just thought it was a cool service.

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zaidf
The reason there is no SaaS fatigue is that $117/month is still chump change
for most companies or even angel funded startups. So yes, if your customer
base is made primarily of individuals or nonprofitable or nonfunded businesses
then there is a chance for fatigue. Most profitable SaaS cos charge what is
perceived as a tiny amount by their profitable or funded clients.

~~~
patio11
Angel funding is very much not a prerequisite to being able to pay for
business tools which cost $120.

~~~
zaidf
It's amongst the possible prerequisites. Others include being profitable, of
course. If you are not profitable, funded or part of a large corp, there is a
real chance of SaaS creep from a cost angle.

~~~
tptacek
Real businesses are either cash flow positive or (somehow) financed. If you
are neither, then for the purposes of market segmentation at SaaS companies,
you are not a real business.

Every time the topic of SaaS pricing comes up, someone makes the point that
3-month-old startups with no revenue can't afford $10/$20/$50/$100 per month.
That SaaS companies could set up a pricing scheme that would allow even
3-month-old startups to use their services. That this might pay off in the
long run when a few of those companies make it big.

SaaS companies _could_ do that, but if their service is truly valuable, they
don't need to --- companies with traction will pay for value whether or not it
comes with warm fuzzies attached --- and if their service isn't truly
valuable, they should fix _that problem_ , not their pricing table.

~~~
zaidf
_and if their service isn't truly valuable, they should fix that problem, not
their pricing table._

Totally agree.

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rb2k_
What pisses me off is when SaaS offers aren't offering a pricing model that
would actually fit for me althoug it wouldn't be a technical difference to
them.

I'm currently trying to move away from gmail to something else that also
offers me caldav/carddav integration. I could run my own mail server, but I
really, really don't want to ...

One perfect solution for me would be atmailcloud(.com). They offer a snappy
webinterface and cal-/carddav for 2 USD/user. The problem: the minimum amount
of users is 5. I could just change the http post and probably get away with
just buying a single user, but I'd rather be able to pay for something I'd
love to use without having to fake my way arround it.

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sgdesign
I'd be interested in knowing which SaaS you guys pay for a monthly basis, to
see where I stand.

~~~
dangrossman
* Rackspace Email ($20/mo)

* SnapEngage ($19/mo)

* ZenDesk ($9/mo)

* RepositoryHosting ($6/mo)

* PayPal Website Payments Pro ($30/mo + per-trans)

* Authorize.net ($40/mo + per-trans)

* Merchant account ($30/mo + per-trans)

* Softlayer ($600/mo)

* Linode ($19/mo)

* Kall8 ($2/mo)

I think that's about it for the monthlies.

If I didn't own them, I'd also be paying $9.95/mo for W3Counter, $69/mo for
w3roi and $20/mo for DialShield based on my own usage.

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bwarp
Considering our org chucks way over $5k a month at salesfarce, I reckon
dynamics CRM would be cheaper...

Oh and don't get me started on Atlassian's products. They are hideously
expensive when you hit 90 users.

SaaS is fine for a couple of users usually but it doesn't scale from
experience. By then it's way too late to switch.

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mikehuffman
I would be interested in hearing results from anyone who has switched the
payment structure of their product. From say, one-time-purchase to saas, or
vice-versa.

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sgdesign
I've written a follow-up to this post: <http://sachagreif.com/saasternatives/>

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comforteagle
Lean startup SaaS tools bundling for cost is an idea I'm vetting now:
leanmeanbundlemachine.com

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jacques_chester
You know what everyone else calls this? _The cost of doing business_.
Recurring expenses are a fundamental part of business life, it's best to get
comfortable with them.

