[cybrexalpha]

> wouldn't there be a huge competitive advantage to being the CEO who said, "hey, we can get rid of all our expensive SaaS, free up a bunch of cash for productive investments, and make a bunch more money"?

Unfortunately, this isn't how large org CEO compensation works. CEOs of large publicly traded companies are mostly compensated by the stock price. Either directly as it increases the value of their significant stock grants, or indirectly as their cash bonuses are tied to stock performance. Stock performance is mostly a result of quarterly financial performance. Therefore, directives that take a long period of investment are much less attractive.

Say you were the CEO of a multi-thousand person organisation. Your SaaS bill is through the roof, and so you want to in-house everything. Not only do you need to disrupt nearly every employee by changing the way they work (depending on what you're replacing), you need to enter into co-location contracts, buy hardware, and hire staff to mange that hardware. It's a very large up-front cost (likely in the tens of millions on hardware alone) that in theory will pay off in the long term, but investors and the market will see a spike in your assets on your P&L, and will question why you're tying up capital in hardware instead of building the stuff that you sell. That's assuming you have the cashflow to buy all that hardware in the first place.

[jeffreyrogers]

That was my point. If it were that much cheaper to in-house everything or if there were cheap SaaS alternatives that worked as well, companies would switch to them. Companies are paying for SaaS because it solves a business need, and for the most part SaaS does it pretty well.

[cybrexalpha]

In the long run, in many cases, it probably would be cheaper. It's just that the incentive structures between the long-term health and executives are not aligned .