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      This in particular feels outright silly:

      Like spending $15/month per seat on Salesforce’s Slack in a company of 2,000 people comes out at over three hundred grand per year. Just for a chat tool!

      You are spending at least about 160 times that much on salary and that’s assuming everyone gets minimum wage for California. I did also assume they are all full time but I skipped the price of office space.

      If your employees need to talk to other employees regularly in order to do their jobs, then it seems to me like maybe a little overhead (maximum 0.7% ish) is cheaper than paying people to communicate less efficiently.

      (I will not contest arguments to the effect that maybe Slack isn’t an excellent chat tool. Or that many companies may get negative utility out of chat instead of positive.)

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        Does self-hosting Rocket.chat or similar cost 300k/year? Even assuming that you have a person full-time on it and running it on fairly beefy hardware, the costs would probably come out to maybe 150k/year. But I’d bet it wouldn’t take much more than maybe 20% of a of somebody to maintain it, even for a 2000 people company. These costs go down as you get more employees.

        The fact that overhead is fairly small doesn’t mean that it can’t be meaningfully reduced.

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          These numbers are proportionally small enough either way that I strongly feel you ought instead to make the decision based on which one works better. Effectiveness is more important than efficiency.

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          It is not just the cost in dollars. I think a lot of these companies just don’t want to be responsible for it. They have in their head that they must focus on their own core thing and that everything that is not part if their primary process should be outsourced. Because in theory the outsourced activity (like chat) is done by a company focused on that and they should be more efficient and thus cheaper.

          What these people conveniently ignore is that by outsourcing you also make yourself dependent on another company that is as ruthless it in its pursuit of making money as you are. And they will not hesitate to exploit your fear of a large migration to a competitor.

          It is like unlearning how to cook on purpose and outsource all your food preparation to restaurants and take-outs. Not a healthy way of living.

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        Also I’m reasonably sure no one who’s buying Slack for 2000 seats is paying list price. That’s just not how enterprise sales works.

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        That’s roughly the business model for a lot of these companies:

        They start offering something that’s cheap per-seat, and you have few employees. If it costs well under 1% of a salary and delivers a much greater than 1% it’s easy to lost it in per-head overheads. By the time that you’ve grown to the point where the total cost across employees is noticeable on your balance sheet, you’re locked in and migration would cost a lot as a one-off cost, in addition to the long-term cost of maintenance.

        This is why I’d look for things like hosted Matrix instances, rather than Slack. Up front, someone else handles everything and you pay a per-user fee (it’s a shame element.io has a minimum of 50 users, which rules out a lot of early-stage startups). Once you’re big enough that it makes sense to bring the maintenance in-house (particularly if you’re doing this for a bunch of services and so can have an admin to maintain a few things, rather than an admin maintaining just the Matrix server), the code is all open and you just export the data and import it locally.

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      This seems kind of dumb. $88,000 is the annual salary of a junior software engineer in the US. If it will take more than 1/4 of the time of a senior engineer to make monitoring work as well as it does now without datadog, that’s probably a net loss. Certainly you’ll pay the opportunity cost of spending engineering resources on redoing all your monitoring.

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        I’m surprised by your stats of $88k for a junior developer. Do you have a source for that? I can believe that might be the case in California or New York, but it feels off for a national average. Our junior devs make less than half that. Heck, I’m only making a little over half that. My boss’s boss’s boss isn’t making $88k and I’m not entirely sure her boss is making that much.

        Don’t get me wrong, I know we’re underpaid, but, out of the last three places I interviewed at, no one was offering more that $60k for senior devs. And one of those was in New York.

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          I made $65k my first year out of school working a government-ish job at a university research center 20 years ago. $45k for a dev in the US in 2023 is WILDLY underpaid.

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          Yes, junior devs here in Minnesota (low cost of living area) are routinely getting offers for $100k or so. There’s a ton of data on levels.fyi.

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          You should be more ambitious about compensation.

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          Junior dev at big bank in a random city got that within 1 year of learning to code.

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      I wish there was a real analysis of the buy vs build decision here. I cannot tell if $88k per year is too much money for the service because I don’t know the number of metrics they send, dashboard usage, other features they use, etc.

      My sense is that this has the same considerations as whether a company should use the cloud or not.

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      I would put Vercel in this category. If the $20/month/person Pro Plan doesn’t quite meet your needs and you need something custom, the next option is their Enterprise plan at a minimum of $36,000 per year. There’s nothing in between.

      This seems to be the playbook for SaaS nowadays: Get people in at free or low-cost “hobby” level, then create maximum dependency so that when the customer outgrows the low cost plans, the provider has dialed in the cost to be right at that level where moving to another solution is too risky or expensive for the customer so they end up just paying. Oh and to make sure you don’t change your mind, the minimum contract is one year.