General Consultant Discussion

Love this line from Bob's Top 100 Var's edition. Comes from Scott Irwin at Aktion Associates: ""You rent infrastructure, you don't rent software,"" he says. ""SaaS,"" he continues, ""is for companies that don't understand mathematics."" And the math is simply that subscription pricing becomes far more expensive as time goes on when compared to buying software. Irwin thinks SaaS only works economically for companies that have IT staff to cut. He believes that ultimately cloud vendors will have to cut prices to capture business as the market matures. Mathematically I agree with him. But we have many clueless people out there that read media and drink coolaid and would rather pay more if something seems simpler. Look how people think a $200 iphone is cheap on a $100/month 2 year plan, when in Europe, the same plan is $60, no contract but you pay $650 for the phone. Sounds so much pricier to simple minded people. Even though in the US, you $2600 for 2 years and in Europe you pay $2090.

The mentality of 'give me the value now and defer the cost' is classic Americana. How else did the Federal Government wrack up such a large amount of debt? Same goes for cities and states who gave employees ridiculously lucrative pension plans. They got the value they wanted right then (employees go back to work) and deferred the cost to some other time.

Well as a matter of fact you do rent software. It's called licensing. You don't own it - never have and never will. The difference is in how it's priced. Both initially and for ""maintenance"". Interestingly if you go over Sage's most recent half year report they talk about subscription pricing but I'm convinced they are talking about maintenance. Over time that annual fee we previously knew to cover upgrades is going to be referred to as a subscription. Totally agree and always have on the pricing issue. I think SaaS will have to cut their pricing and at the same time the Sage's of the world will come up market because they can (lock in and because SaaS is much higher). SaaS does make sense but we are starting to see that it's only certain situations where it is an obvious fit. Today that's subsidiaries of large companies, companies with zero IT infrastructure and companies with lots of remote workers.

I'm meeting with alot of companies who think moving all their in-house infrastructure to a place like Rackspace is a good idea. It may make sense some times, but for many they are doing it out of what happened after Sandy and the like. They don't realize they can get that same 'cloud disaster recovery protection' with a Business Disaster Recovery (BDR) solution like our EverSafe! line ( www.eversafe-backup.com ) It's like buying an entire home to go on vacation 2 weeks per year. There's a reason the timeshare industry is so big (and not just because of the free towel :) ), it's cheaper to 'own' the 2 weeks you need than own 52 but only use it for 2.

The difference is if you stop paying maintenance, they can't evict you...

@MarkChinsky - The eviction comparison is not entirely true. For a number of years third party add-ons for MAS90 would stop working if maintenance was not paid. Sage just never moved to that model but I believe it's coming and at that point they can in fact evict you -- or put you into read only mode. Also with respect to companies who want to move their entire infrastructure out of the office and into the cloud. I wonder how much of that is because they've had it with their internal IT staff. It's probably a pipe dream to think they can totally eliminate an IT department but there are few companies I've seen recently who have what I'd term a ""fully functioning IT department"".

Love: ...there are few companies I've seen recently who have what I'd term a ""fully functioning IT department"".

A recent support call started with ""This is probably an IT problem and not an Accpac problem, but I wanted to talk to somebody intelligent so I called you first.

You have very smart clients....