You’ll quickly learn why businesses make the decision to pay for software instead of cobbling together open source.
Let’s say you’re a small, but growing company doing $2M ARR. You absolutely could run your email marketing using an open source tool hooked up to Amazon SES and save a thousand bucks a month over something like Mailchimp.
But the problem is, it’ll take you up to a week to get setup (thousands of dollars lost already) and then none of your employees will understand how to send emails with it (thousands of dollars wasted in training). Once they do understand how to use it, it will likely still be slower than a dummy-proof visual UI that has been battle tested on thousands of customers instead of an esoteric open source solution. If it wastes 8 hours of employee time per month, that’s another $1k a month lost.
Then when something goes wrong, which it always does, it’ll require expensive developer time (likely costing the company $1000-$1500/day per engineer all-in) instead of a simple support phone call.
And when you realize the open source version is missing a feature you need, you have to build it yourself, of which any trivial engineering task inside the company will cost at least $5k in employee time. Not to mention the cost to maintain the feature when the open source team breaks it with an update.
So, you’re already in the hole and losing money compared to Mailchimp.
This says nothing about the opportunity cost of engineering time that could have been spent serving your own customers, allowing you to generate more revenue.
You can generate revenue to infinity, but can only cut costs to zero. For a growing company, time spent on cost saving over making new sales is likely time wasted.
A startup in say, Mexico or LatAm will look at the OpenSource version of say Business Intelligence applications (Metabase, Superset in the link), then look at the commercial versions of them (Tableau, Lookr). With the price needed to pay for the commercial versions, the startup can hire 2 or 3 developers (at local rates) to do whatever improvements they need to the open source application.
Something similar happened to me with Jumio about 5 years ago: I wanted to use it. I spoke with their sales 2 or 3 times in 4 years. THe problem is that, every "verification" was costing more than $1 USD... for less than that cost, my company could hire 3 people a month to do manual verification and more (considering the cost of hiring + cost to the company, including Mexico's hefty employer costs). It never made economic sense to do implement automation.
Doing your own maintenance, antivirus, spam detection can be a demanding job, but getting out of a blacklist is ten times worse. We gladly pay Google Workspaces to leave that suffering to the specialists, we couldn't do it better if we tried our best.
You either pay with time and work, or you pay with money. Sometimes spending the money is the better trade off.
I started my career in open source and still strongly believe in FOSS tenets, but enterprises are looking more to de-risk their projects and platforms.
Risk is reduced when you have a vendor you can hold accountable for issues in the product, hence making proprietary solutions (and sometimes open source but wrapped in enterprise support solutions) the only viable choice for a business.
For example: a large organization might get a "Microsoft Custom Support Agreement" if they want to get security updates after the date that MS stops providing security updates.
As with any negotiation, if you have leverage (i.e. dollars), you can negotiate.
That's not universally true, of course. That money would buy you a week of developer time in most of Europe, and even a month of developer time in some developing economies.
Most SaaS offerings without free tiers indeed are unlikely to be used.
I even had to buy the JetBrains tools myself to be able to navigate 1M SLoC Java codebases easily, refactor with confidence, whilst not resorting to piracy like some of my countrymen do. Even if definitely worth it, i still had to look at the price tag for a while, seeing as it's essentially food for a month or two: https://www.jetbrains.com/idea/buy/#personal?billing=yearly
Developer salaries vary wildly over the world, though i guess some SaaS solutions also do location based pricing, which may or may not have historically worked.
That's only true if you live in Poland and also ignore the all-in cost of your employees. A good rule of thumb is to assume 2-3x salary for the all-in cost of having a workforce.
Plus some management expenses, and it turns into around 1000 euros per delivery day for a FTE.
Then we can go to the companies doing high level consulting and pull some notches still.
The comment that I was replying to specifically referred to employee time per month. That's naturally going to be different from some high-rate consultant, so this is totally an apples-to-oranges comparison.
Furthermore, it's a large market and there are plenty of consultancies in Europe charging significantly less than that.
* We’re a shop full of developers, but none of us have the required skill set to host and debug a python app.
* We’re fairly well booked. Any time I’d assign one of the folks to maintaining tool X, I’d have to take from time assigned to client work. Which means the internal cost is not what’s interesting. What counts is “how much do I loose by not having them work in billable hours?”
All of this means that the calculation is strongly tilted in favor of buy.
Of course if you hire a freelancer, prices are very different and 1500€/day is very reasonable.