SaaS is just vendor lock-in with better branding
111 comments
·June 6, 2025lokimedes
paxys
If you are so passionate about it then start a company that builds, deploys and maintains SaaS software on-prem for a comparable cost (say $10/user-mo). If you can provide the same service, guarantees and price points as the typical SaaS while letting companies keep control of their data and preventing lock-in then you'll have the largest market in the world.
lokimedes
It was just called software. People ran it on their own servers. It worked just fine.
sanswork
and instead of a monthly license you paid an annual support contract plus salaries of staff to maintain your servers and on site support for staff.
theamk
Until malware (viruses back then) came and data got lost.
Until hard drive died on that server and turns out backups were broken for the last 5 years.
Until someone tried to fix some (real or perceived) problem with the server and it suddenly became full of malware.
SpicyLemonZest
It didn't universally work fine. Every non-technical organization I know of in my circles remembers "the server" with huge disdain, and they're very glad that Google and/or Microsoft has allowed them to get rid of it.
pistoriusp
We should chat. We're busy building a store for source code.
bravesoul2
https://onestack.cloud are doing this
mindwok
This would be possible if we could commoditise the operational aspects of cloud computing and SaaS providers. Some companies are trying!
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luckylion
But you'll also compete with very deep VC pockets that don't mind burning lots of money to entrench themselves, so you usually can't compete on cost, until they start the squeeze.
Imustaskforhelp
For what its worth, I always feel as if we could provide a binary and then let the binary run on things like aws/gcloud/ preferably cloudflare workers as cf workers feels genuinely good if you focus on typescript/imo sveltekit as well
Please, can anybody enlighten me I suppose? I build a lot of side projects, some of which are genuinely cool and I can genuinely see it being a "saas" but like you, I hate saas from a consumer perspective and I love saas as a guy wanting to earn money so my ethics are definitely questionable at the moment.
Also, let's say I want somebody to buy my software. How does that make sense? What if they just redistribute that software without my permission. Doesn't that just eat into the profits when Saas couldn't.
And also I personally am a foss advocate and as you said its economically bad.
I am kind of thinking of creating software which is just source available and that you need a permission / license which you can get by github sponsoring me but I saw this one project doing it and the people in hackernews were pitch forking the poor guy. Its so crazy and bizarre that once you actually try to provide "some" value. You are automatically the bad guy for not using MIT.
I am also thinking of such a license where its SSPL if you don't have a license or BSD/MIT if you have a license (sort of like redis-ish)
But I am not sure if people would buy them. Maybe I can support both I suppose? I am not sure lol, which is why I wanted to get enlightened
PS: I built a way to create your own cryptocurrencies for genuinely free (no jokes)(not sure how to monetize and if, If anybody can help, that would be great!) and a way to get blogs from youtube posts and a way to youtube community post and videos as an alternative to google photos for unlimited storage (though the privacy aspect for community post is a little bad but I guess I can fix that as well)
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chermi
Kind of, but not really. I would instead say that the idea of "stickiness" or trying to make your software sticky is rent-seeking. Of course, most SaaS companies vigorously pursue stickiness, but it is not an intrinsic property of SaaS.
jamestimmins
I don't quite follow this logic. Nearly all SaaS has ongoing costs from the provider: hosting, support, r&d, etc.
How is that rent seeking?
lokimedes
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.
brookst
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.
nkmnz
> 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…
theamk
That's just called "over time, some products become worse and more expensive"
Every commercial company is free to charge whatever they want, it's not rent-seeking (unless there is a monopoly, but your argument is applies to small companies as well).
And yes, the fact that you cannot find the software you need for the pricing model you like sucks.. but it is not rent-seeking. And the fact that my local Home Depot does not have cheap, but reliable refrigerators is not rent-seeking either. At worst, it is collusion between manufacturers.
tonyhart7
Yeah but who going to fund R&D and stuff like that???
jen20
> Most of that software could run on prem.
Many companies don’t have a prem on which to run.
hansvm
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.
paulryanrogers
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.
tshaddox
They presumably charge much more than their ongoing costs. Rent seeking doesn’t mean zero costs.
victorbjorklund
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.
satvikpendem
That's just profit, their incentive to actually build the thing in the first place.
mypornaccount
I sell my saas to willing buyers at the fair market price.
tshaddox
That’s not mutually exclusive with rent seeking, of course.
missedthecue
But rent seeking implies some sort of external party enforcing a non-competitive environment that benefits you. Like tariffs or aggressive zoning laws.
Raising the price of your product isn't rent seeking.
csomar
Nah, rent seeking happens when the customer is faced with little choice (ie: constrained market, can only live there, can't build more, etc...). This is not the case for most of SaaS where you can just signup to another service.
missedthecue
Exercising available pricing power isnt the same thing as rent seeking.
tshaddox
> Now the other extreme of free software is, arguably, also (economically) bad, as it fails to reward the effort of the creators proportionally to the value gained by the user.
What’s the economic explanation then for why so much high quality (or at least, widespread and critical) free software exists?
hiAndrewQuinn
Probably that free software never actually dies or even really degrades in the traditional sense. Given decades of time, even small incentives to make things better, like the reputational increase one gets from contributing to good FOSS projects, compound really heavily.
Take the Linux kernel as an example. If you were a kernel hacker, even a minor one, from the 1990s, it's quite likely you could parlay that experience into a good job today doing something similar. Those 50-100 hours decades ago have compounded quite nicely for you. But your contribution didn't decay over the next 30 years - worst case scenario, it stayed exactly as good as it was when you stopped, and best case scenario it's been substantially rewritten and incremented upon.
That's how I explain it to myself at least.
AlienRobot
That's only true for libraries because developers benefit from bugs getting fixed. FLOSS applications are far from high quality.
pistoriusp
This is exactly how I'm thinking of monetizing the framework.
citizenpaul
IMO Vendor lock in is when you ask your boss why cant we use tool NEWTHING? Then they tell you its because they have a 5 year contract with Oracle/MS/IBM/Salesforce and that is what we are going to use. We aren't going to have 10 platforms.
Which means in 10 years they will really be locked in because no one is going to un-entrench that thing.
pistoriusp
if you've made it to 10 years, that's a really nice problem to have (or maybe a really boring problem to have). But if you're just starting out, I want to prevent you from making all those decisions when you could really be focusing on your startup instead.
So I'm trying to encourage you to consider picking a platform and just sticking with the tools of the platform rather than bundling it yourself together.
tough
You can stick with it without legally getting trapped by some shady BD getting their sales quota filled
pak9rabid
It's still a good idea to abstract away these services behind a standardized interface. This way switching from one service to another is just a matter of providing an alternative implementation to said interface.
Granted this approach requires a little foresight...something many companies seem to not have nowadays.
bigfatkitten
The problem is people don’t just store data on systems like Salesforce, they use them to build very complex applications.
Getting your data into and out of Salesforce is easy, it has excellent APIs. Rewriting your applications is the bigger hurdle.
theamk
Abstractions are not free either, so if you are creating this "standardized interface", the complexity price you pay is better be worth it.
Often it's less effort to lean in and use all features of the service than to limit yourself to a least common denominator between all competing services.
jgord
Perhaps the difference between a religion and a cult is that you can leave a religion.
Likewise .. if you can get your data in a standard format and walk away, you are not locked-in.
Customers tend to feel less aggrieved when they have access to their data - too many SaaS platforms dont allow this.
Imustaskforhelp
Really interesting.
As someone who wants to monetize his side projects, I am not sure what I should do.
Should I make it 1) open source under permissive license (MIT)
2) open source under restrictive license (AGPL/SSPL)
3) source available and only permissive if you pay me a license (like how redis did it in the middle but actually this time , instead of changing license after project is already famous, I do it from the start of the project)
4) not make its source available and distribute a binary for fixed one time.
5) I do any of the above things but with primarily supporting saas? and supporting the ability to move out as you mentioned
Currently, most of my software that I write is just open sourced with MIT and I just private the software that I think has value.
0xbadcafebee
So the author is saying, don't buy SaaS, that's vendor lock-in. Instead just go all-in on one platform... like Cloudflare, the one (& only) platform that the SDK he writes works on. Which isn't vendor lock-in? No, wait, everything is vendor lock-in:
No matter what choice you make, it's always going to be vendor-locked in.
Switching out something, even if it's open source and self-hosted,
means that you're rewriting a lot of code.
Locked-in means that switching it out for something else is either A) impossible, or B) would require an investment greater than just sticking with the existing thing.
When you write software in a loosely-coupled, highly-cohesive way, the intersection between different components is designed to not take much work to replace one component or another. The same is true of systems. If the interfaces of those components are simple, and their use is cohesive, it should not be difficult to replace a part. However, if your components are not cohesive, then it will be a huge pain in the ass to replace anything.
So, no, it's not a good idea to choose a platform because "everything is lock-in, so fuck it, i'll lock myself in even more!" As a developer, I can see the appeal, as it means less work for you. But as a business owner, this is a stupid reason to choose a solution. Choose solutions that will support the business and give it flexibility to change over time.
pistoriusp
> But as a business owner, this is a stupid reason to choose a solution. Choose solutions that will support the business and give it flexibility to change over time.
I agree with you. If you're starting out, if your business is not profitable, don't pick SaaS. Don't take the time and pay those 5 taxes. Rather just use the platform, and if you're scalable and profitable and growing, pick some other technology that supports you in the long run.
Imustaskforhelp
for what its worth, I use cloudflare workers a lot and I write it in a way where my code can run on anywhere else (and heck, if you really want it, you could run the code locally using wrangler dev I suppose? )
But I guess my software can work with only some changes or I suppose even without some changes on pure node/bun/deno as well
AstroBen
So to fight vendor lock in.. double down by locking yourself in even more, tying everything to one platform?
pistoriusp
> locking yourself in even more, tying everything to one platform?
I'm saying that if you don't want to use a platform because it's "lock-in," but then use SaaS... then the argument doesn't hold true, especially if you consider the "taxes" of using SaaS.
solatic
OP isn't really arguing against SaaS (after all, OP recommends in the end either Cloudflare or Supabase, which are provided as a service...), that's just the clickbait title, rather OP is arguing against signing up for a hundred different vendors and the overhead of commercial relationships with a hundred different vendors.
Which is... not really controversial. Fewer vendors makes your life easier. Fewer dependencies makes your life easier. It would be awesome if you could build your entire product based on the standard library alone! Sadly... that's not really realistic. Nice pipe-dream though.
pistoriusp
Thanks! I think you summarized exactly what I was saying, and pointing out that I had a clickbait title. My goal here is if you're starting out with something new, consider reaching for a platform rather than a bunch of services.
The reason why I really love Cloudflare is because of their bindings. A lot of the time you are simply using fetch, so request and response to interact with their services. It feels as if fetch has become like the Unix pipe of the web.
foundart
With SaaS you mostly give away the chance to benefit from the near zero marginal cost of software. The vendor probably shares the benefit of the marginal cost via lower prices, but at some scale of users and some price per user, the SaaS customer will end up getting a bad deal.
The problem is, you'd be foolish to run your own thing in the early days of a company. It's only when you've succeeded and scaled that it becomes a problem. You survived long enough to need to scale in part by keeping costs low and one way you did that was by using SaaS services instead of building and/or running versions of those tools yourself. That was smart.
As the business grew at least one or two of those SaaS services got so entwined into the daily operations of your company that there is now no way to replace them without a lengthy, risky, and expensive migration project.
The SaaS problem is a negative side effect of your success.
edited - a typo and a word change
abelanger
This reads more like a pitch for open-source than anything else.
> Switching out something, even if it's open source and self-hosted, means that you're rewriting a lot of code.
The point of something open-source and self-hosted is that it resolves nearly all of the "taxes" mentioned in the article. What the article refers to as the discovery, sign-up, integration, and local development tax are all easily solved by a good open-source local development story.
The "production tax" (is tax the right word?) can be resolved by contributions or a good plugin/module ecosystem.
roncesvalles
Open source is free if your time is worth nothing.
tonyhart7
some people just don't understand business
people is gonna find out why companies pays top dollar for close source alternative vs open source product
pjmlp
SaaS is the solution to get devs to actually pay for tooling, like other professionals.
Who doesn't like it, should promote that upstream gets more than bug reports and push requests, as means to pay their bills.
paxys
I'm at the stage of my career where vendor lock-in (aka "we are going to use this stable boring corporate-backed tech forever instead of migrating between your hot new JS frameworks every 6 months") is a godsend. Yes I'll happily use AWS. No I will not spend my time to learn and implement RedwoodSDK, whatever that is.
tough
There's a RedwoodJS frontend framework, never heard of RedwoodSDK
Nobody ever got fired for hiring IBM
pistoriusp
RedwoodSDK is the successor to RedwoodJS. We've rebranded RedwoodJS as "Redwood GraphQL" and built this new thing from scratch. We are the same people with the same ambitions, but more focused. With a narrow niche. I believe that a framework requires a platform to be competitive today.
Because of AI, the difficulty in writing code is greatly reduced. And because of platforms, the difficulty of shipping to production is greatly reduced.
That combination can be really great for your velocity when trying to build a business.
sakesun
No you didn't rebrand RedwoodJS. You just silently abandoned it. The doc is not even be revised for the proclaimed new name. Paying for vendor to be locked-in into well-funded platform should not be considered as a bad choice after all.
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lazide
I can’t tell if serious or not, but I threw up in my mouth a little regardless.
tough
Thanks, that does make sense, I just hadn't heard about the new direction/rebranding.
Agreed on both of your assesments Best of luck!
missedthecue
That's why there's so much of it. Annuity like income and pricing power is an attractive business model to create around.
gavmor
The discovery tax is actually something like O(n log n), because you have to also search and also compare. It's part of The Mess We're In[0].
roncesvalles
To some degree this happens if you're trying to optimize and find The Best solution for something that isn't core to your product's value proposition. Just take something that meets your requirements and you'll probably be fine. And if you need to switch to something else down the line then, oh well, pull a couple of all-nighters and get it done. Dealing with the ground shifting below you is part of the job.
It is Adam Smith’s “rent seeking” in a modern hyper-scalable form. It should be shunned and criminalized on a basis of anti-social economics. Now the other extreme of free software is, arguably, also (economically) bad, as it fails to reward the effort of the creators proportionally to the value gained by the user.
Let us buy our software, and separately, offer us a service agreement that actually has to provide value in its own right. The bundling of these in SaaS is what makes this obscene.