Prices should not go up for hosting and development. Prices should go down per user as there are fixed costs. Same with development.
Unless strava is losing users their costs aren’t going up, especially not 30%.
It’s easy to argue that costs go up but that’s not due to development, but due to corporate overhead.
Unless they are doing something really wacky with saas costs, they should have low marginal costs so as long as they have a decent growth, costs go down.
> Prices should not go up for hosting and development. Prices should go down per user as there are fixed costs. Same with development.
That's the naive in theory world. In practice, it is not always the case that economies of scale lend to reduced hosting/infra costs. They can in fact balloon, especially for a small population or a small niche use case.
I think it is always the case that it leads to reduced hosting/infra costs. But that doesn’t mean it leads to lower prices as these cost savings aren’t passed on to users.
A properly designed saas should have a non-linear cost per user so more users means lower marginal costs. If not, then something is amiss or it’s not a digital product. The “increased costs per user” is just marketing PR blargh.
Even then they may have been able to attract a lot more revenue by keeping the old price, or god forbid, offer a discount. If you grow your free users by 100%, and your run costs are only 5-10% of your business, you do not need that much to absorb those incremental costs. However, if your business model requires 20 dollars profit per paying user, then of course your business model needs looking at. Just like Netflix is trying to say.
Unless strava is losing users their costs aren’t going up, especially not 30%.
It’s easy to argue that costs go up but that’s not due to development, but due to corporate overhead.
Unless they are doing something really wacky with saas costs, they should have low marginal costs so as long as they have a decent growth, costs go down.