Most of that software could run on prem. The problem is that bundling hosting with the actual software in many cases translates into a way to confuse the expense of one for the other. Things that don’t incur operating expenses shouldn’t be charged as a monthly fee, that is rent seeking. Forcing someone to pay for “services” like hosting, “upgrades”, etc. to gain access to the software is what I find problematic. Now that the business model has become dominant, it is hard to find any software not on a SaaS-like payment plan. Adobe, Autodesk, Microsoft, etc. all sold software and now all sell subscriptions with little added value to the customer. But the cashflow of a rent model, as forewarned in “Wealth of nations” is so ensnaring it can only be avoided by law. Yet here we are.

But this is still such a bastardization of the term “rent seeking” that is is somewhere between disingenuous and flat out lying.

By this logic, my house cleaner is rent-seeking because I pay every week, but I could do the work myself. That’s not what rent-seeking is. That is a garden variety service.

All of the anti-subscription sentiment just sounds like “I want perpetual support and updates for a one-time price”, which is just silly. It’s actually bad for the customer because once the service provider has your one-time payment, they have zero incentive to keep you as a customer.

It leads to misaligned incentives as sellers seek to expand to new markets to reach new customers while neglecting existing customers who are nothing but expense.

Further, SaaS produces net lower costs because resources can be utilized more efficiently. Great, you can do an on-premise server, but you need to spec it to support the busiest second in the busiest day of your year. Most of the time it will be underutilized.

Sorry, this whole claim is such a massive misunderstanding of Smith and SaaS that it’s making be a bit crazy.

SaaS may not be a particularly good example because like others have mentioned, there are costs to it, and it's up to you to decide whether the price is worth the convenience.

The anti-subscription sentiment is not without merit, however. Software that just runs on your computer now has a fucking subscription for no reason. Adobe, games, etc. That is rent-seeking, because I want to pay for the goddamn thing once and own it. I don't care for support or upgrades; if I do, I'll buy the newer version.

Nobody cares about the costs to offer a product. People care about the value provided.

If I think a service is worth $20 month, that will not change if their cost structure changes and suddenly it costs them $1 or $100 per month to offer. It’s worth $20 to me either way. If their cost becomes $1, I rely on competition to create the consumer surplus.

Sure, but some of us are old enough to remember computing freedom, and for us, it isn't worth it.

> Most of that software could run on prem.

No, because that would require everyone to own and operate their own servers. I am very happy I do not have to share my bedroom with a server rack so that I can operate my company - not to speak of the cost to deploy a 15gbit/s line to my apartment…

> Most of that software could run on prem.

Many companies don’t have a prem on which to run.

Yeah but who going to fund R&D and stuff like that???

The thing it's being compared to (desktop software) had the same functionality with none of those costs, and it was easier to develop. That's somewhat like a grocery store hiring a dozen egg-sitters to keep the egg supply emotionally supported or some other nonsense and then using that as a justification for the high prices they're able to charge, where an x% profit margin on the unnecessary job translates to significantly more money to the store.

Was desktop software easier to develop than SAAS? It was hard then and is hard now. Even using Electron doesn't remove the need for installers, upgrade paths, logging, diagnostic measures for client installs, troubleshooting when bad hardware is in the mix and only the client can change it.

I kind of wish if we could just slap a desktop software which just runs it on localhost. And that when I click on it, it opens up any of my browsers.

I kind of like this idea personally instead of electron

They presumably charge much more than their ongoing costs. Rent seeking doesn’t mean zero costs.

Doesnt most companies in all industries charge more than their operating costs? Same with people, most work for a salary higher than their operating costs.

Yes, but the point is that rent seeking profits come from things which don’t contribute to economic productivity, which is the accusation being discussed. Having non-zero costs doesn’t imply that you’re not rent seeking.

I know what rent seeking is. That is why it is wrong to claim any salary/profit above operating costs are rent seeking.

I didn’t claim that and neither did the commenter before me. The commenter implied that, because the operation has non-zero costs, it must not be rent seeking. I offered a correction.

So then what is the cutoff and who gets to decide it?

I doubt anything has literally perfectly zero contribution.

The market does. So competitors and demand.

The problem is that you have really only little competitors on the market.

Eg. Microsoft 365 namely being the one that has outgrown any competitors that can seriously threaten them. They can dictate the prices and they do it willy-nilly and there is no-one that forces them to be cheaper.

The market doesn’t write comments on HN… clearly another entity must be typing out readable comments.

That's just profit, their incentive to actually build the thing in the first place.

Most SaaS contribute to economic productivity though. I see the uptime of local services that our IT maintains, let's just say it's not good. By paying a monthly fee for Slack, we get a working communications system which much better uptime than what we could get from self-hosted.

This is very specific contribution in economic productivity, as the company gets no work done when the communications system is down.