Seems the words "rent seeking" should appear more in this discussion. "B2B SaaS" companies may well be cargo cults; but the blessing they're dancing to secure, the goal they seek, is "passive income".
Accounting really loved the predictable expense, and it was easy for us to scale price with activity, so our customers paid less during slow months or as user count fluctuated.
We even had a competitor which was about our size nearly go bankrupt, as their customers weren't interested in the .Net rewrite they had spent 2 years on, opting to keep the old version rather than buying the new, but functionally very similar, version.
So it's not clear cut IMHO.
Eventually, some country is going to realize a piece of software is essentially a utility and letting some private company keep a sector of the economy in it's grasp prevents progress and it'll be nationalized.
everything in China already was nationalizes and they've been trying to give some , mostly fictious freedom.
we're talking and socialism and European compromises.
it's really weird you think we're talking about China.
I assumed we were not talking about the U.S. (and to a lesser degree European countries) since nationalization of the private industry is anathema to these countries. To be sure though I know nothing about nationalization sentiments in Europe these days.
they were never independent to begin with. you have a naive comparison and force it uncritically into this conversation.
This is highly ironic.
I was replying to your second paragraph. But on Oracle: I don't like Oracle very much, but you'd be wrong to think that the jump into relational databases on commodity hardware wasn't massively facilitated by Oracle. We aren't all renting mainframes in the cloud right now in a large part down to Oracle's advances in the last quarter of the 20th century. Oracle is still the world's third-largest tech company. That means what it does, even today, is extremely valuable.
Not going to refute that, but what is that value really? Database software is readily available for free, so there's actually very little value in just the software right? Is it the stability of the product? Support? Just the big name behind it? Those are probably part of it.
The software may be beneficial, but the siphoning off of "profit" only benefits the company owners. It's friction. That's not to say it's bad.
I once had a conversation with a reasonably successful investor. I tried to point out that he didn't contribute anything and get lectured on how hard he works to pick good investments. I really had to spell it out - the money comes from a transaction between the company and its customers. The customer gets something and the company gets money. The money pays for the employees who make the things or provide the service or whatever. Profit goes to the owners/investors but it really does nothing for the people who actually provide something or pay for that something. There was a time when a company issued shares to raise money, and those investors actually did something for the company. Every trader since then is simply trying to profit on what those before them did while offering zero value in the actual transactions making money for the company.
I'm not saying that's bad, its how the system works today and it seems to work reasonably well. But lets not pretend the "profit" isn't friction between the parties involved in the transactions that lead to that profit.
That's not rent seeking.
SaaS companies are quite literally charging rent for the use of software. Presumably that software does something of value, so they call it a "service" so people can feel like they're getting something for their money.
You're paying for the use of something (software) not a service. I can rent a U-Haul by the day (rent) or I can pay for the use of some software by the day (rent). Calling the use of software a "service" was just a fancy way to disguise what's really happening to make it sound more acceptable.
More to the point, rent seeking involves taking money for something that provides no additional value in return, usually because you have a monopoly on something that isn't related to the service you charge for.
For example, you own the land so you charge for passage, without building a road or giving back anything or investing any of that money back to create wealth. That makes almost 0 sense for most software corporations. Sure, they might not be profitable but SaaS is basically the opposite since you get the service or a value out of the service directly, and if you don't, there's no reason to pay for it .
I can't think of a lot of cases where a SaaS product is more or less "forced" on you to the point where you continue paying for something that doesn't provide you value. Rent seeking isn't profit seeking.
That's not rent seeking either. Look up rent seeking and see if it means "charging for the thing you sell or lease". I don't think you'll find that.
It made sense when it was coined; it's not like that was the day before yesterday. (Can't recall for sure, but I'm guessing Adam Smith, in The Wealth of Nations.)