Comment by freeopinion

5 years ago

At $40K/seat, that must be some special software. Simple economics invites competition. Depending on the software, it may not take too many seats to incent the funding of an alternative.

Maybe this is the kind of software that requires huge development costs. But maybe it would be worth 20 seats' worth of customers joining forces to fund a team of 5 people to build you a competing app tailored to your specific needs/wants and completely under your control.

Granted, that could bump your costs from $800K/year to $1.6M+/year. But only short-term. Once your software is production-ready, you drop the costs of your current software. So think of it more like going from $8M/10 years to $6-10M/10 years but having complete control to add the features you want. And perhaps having the opportunity to recoup $millions/year by licensing to others. Or, open source it and give others the same kind of control while benefiting from the features they add. Spread your development costs across more seats to further lower your $/seat.

Or, look at the 100 employees your vendor currently has and lose heart, then hope somebody with deep pockets funds a competitor.

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freeopinion

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lbutler  5 years ago

This particular software is for water utilities to model and simulate their water and waste water networks.

It's mostly used so utilites can forecast growth in their areas for the next 25+ years and see the impact on their networks and feed into their capital work projects.

A decently sized utility may spend up to $200M/yr on capital works so $40k isn't even a line item!

There is completion in the market but consultants are forced to use what their clients pick and most utilites aren't that price sensitive.

There are also open source alternatives by the EPA[1][2], and most commercial operators are just wrappers around this public domain software.

I'm trying to create FOSS to help view and run these models.

[1] https://en.m.wikipedia.org/wiki/EPANET

[2] https://en.m.wikipedia.org/wiki/Storm_Water_Management_Model

  • divbzero  5 years ago

    Thanks for sharing! Your FOSS projects [1] look awesome, wish you the best in building them out. I’m fascinated by examples of niche but critical software applications. It reminds me of Patrick MacKenzie’s thesis that there are more B2B software opportunities out there than you’d expect. [2]

    [1]: https://github.com/modelcreate/

    [2]: https://twitter.com/patio11/status/1213188681843892224

  • blackrock  5 years ago

    It sounds like they are using just a basic Linear Regression to forecast growth.

    And to the uninitiated, this sounds like a very fancy word, that makes the software seem smart.

    But really, it’s just drawing a straight line. And as you add more counts to your x axis, the Linear Regression “forecasts” what the value is on the y axis. This is the magical number, given by the computer, and is used to determine future load or capacity needs.

spacedcowboy  5 years ago

shrug I used to own a company (since sold) that sold software for $50k/seat. Most people who bought it also bought the automatic failover option, which was another $50k/seat.

The movie business doesn't even blink at that sort of cost if it there's even a small chance to prevent having to set up the remote shot again. The logistics, time, hiring, transport, accommodation, equipment, wages, etc. etc. etc. all make $50k a drop in the ocean.

We spent 2 years writing the software, developing the add-on hardware that helped, and touting it around various Post-production houses. It was used on Star Wars I, The Matrix, etc. Post houses started to take it on board as well. Then we were bought, and the product discontinued. C'est la vie.

  • blackrock  5 years ago

    I’ve been thinking that the next realm for movie studios is to use the random AI face generated people, that look real, but don’t exist.

    These faces can be planted on other fake AI bodies, that move like real people.

    Then, what you have is a background full of fake AI people. They look like real people. They move like real people. No more need to hire extras.

    You can just have your primary actors act in a green screen. And virtually change the world all around them.

    The first company that can commercialize this, is going to make a ton of money. And might even be able to gain first-mover advantage, as they lock in all the studios.