
Cloud Software Begins to Lose Altitude - T-A
http://www.bloomberg.com/gadfly/articles/2016-05-31/cloud-software-industry-heads-into-some-turbulence
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seibelj
I think it's more that all types of software tech companies have been
overvalued, rather than a specific cloud-based company problem. If it's a pure
software product that works in a web browser, like marketo and zenefits seem
to be, then you could stop innovation and maintain it with minimal development
for a good long time.

Anecdotally, my father has been doing tech support for a product that hasn't
seen any new features in over 10 years, but customers keep paying for it. His
team is only 5 support people and a part-time developer loaned from another
department who fixes an occasional bug. It makes many millions of dollars
every year, and my dad doesn't even make $60k, so you can do the math.

If a company wants to sell-out to PE and stop innovating, good for them.
That's the nature of business, and it opens up the market for a more
innovative company.

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tyre
Just to clarify, Zenefits is an incredibly manual operation. The client facing
side suggests things are automated, but there are brokers and automated
scrapers and fax machines to make that happen.

(I was an early ZenPayroll employee)

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joshmn
And an autohotkey script. Can't forget the autohotkey script.

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vasaulys
Isn't it unfair to think of Saas as a classification of software a la "word
processing software" and more as a business model?

Like, nobody sets out to build a page that will host ads. One builds the
product and then later settles on a way to get revenue. I've always thought of
Saas like this, just another potential business model to follow.

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tcskeptic
From an Enterprise perspective (and I'm in the belly of the fortune 50 beast
at a division level ~10bn/yr mfg) SaaS discussions internally aren't really
about data security -- they're about lock in and leverage by the vendor. For
anything of a certain level of criticality SaaS is just too much vendor
leverage. Enterprise software licensing is a vicious lawyer on lawyer
battleground with deeply unethical behavior and brinksmanship regularly
displayed on both sides. If you think I want to give any of those vendors the
possession of my server and data during a dispute, you're nuts. The enterprise
SaaS model seems fundamentally flawed.

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briancl
The challenge is to provide more value than the alternative. Enterprise SaaS
works where it makes sense, and it doesn't where it doesn't.

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SFJulie
On its tomb will be written : The over-promising Cloud has been an under-
delivering clown.

A quite vulnerable OS (by lack of ease of maintaining the state) running in a
quite hackyly (thus porous) secured envelope is no more cheaper nor efficient
than correctly written software running in a diminished context (jails,
chroot, pledge)... coders that write correct software are expensive and cannot
be compensated by more CPU, RAM, bandwidth.

If common sense does not work, and financial sense cannot convince you ... I
hope some will get your senses back before their customers change their mind.

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pinaceae
PaaS and SaaS are here to stay. Whole industries are moving systems into SaaS
solutions - the overhead of running data centers, OSes plus dealing with
software upgrades is just too much.

What is happening right now that the market is shaking out the winners and the
losers - Marketo has failed to keep track, Adobe and SFDC MarketingCloud
(Exacttarget) have eaten their lunch.

Getting acquired is not a goal, it is failure. The good SaaS ones are standing
on their own. ServiceNow, SFDC, etc.

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anupshinde
I think this article tries to justify cloud from a financial perspective,
where margins have shrunk obviously . But the volumes will keep increasing for
quite some time. The value from cloud services is just increasing and The
Cloud movie has just started.

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deegles
I believe cloud adoption will also jump at the next economic recession as
companies try to cut costs.

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slantaclaus
"Think inside the box."

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wheatbin
If anything, self-hosted cloud software will continue to grow in popularity.
It's cloud-based Saas companies that are more hype than substance (read
Disrupted for an unsavory inside look).

Self-hosted cloud software will continue to grow in popularity though.
Shameless plug alert: I recently released Wheatbin which is Open Source and
100% free: [http://wheatbin.com](http://wheatbin.com). Github repo is here:
[https://github.com/wheatbin/wheatbin](https://github.com/wheatbin/wheatbin)

~~~
fasteo
Duane history [1] is worth reading

[1] [https://github.com/wheatbin/wheatbin/blob/master/doc/seed-
of...](https://github.com/wheatbin/wheatbin/blob/master/doc/seed-of-
entrepreneurship.markdown)

