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What are the disadvantages of a Virtual Private Server (VPS) versus the cloud?

08/23/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

A Virtual Private Server (VPS) and the cloud are two different hosting models, each with their own advantages and disadvantages. Below are some of the disadvantages of a VPS compared to the cloud:

Scalability: a VPS is usually limited to the hardware resources of a physical server. If you need more resources, you'll have to upgrade to a more powerful VPS, which may require a server move or downtime for your services. In contrast, the cloud allows you to easily scale your resources as needed, without interrupting services.

Resilience: In a VPS environment, availability depends on the stability of the physical server hosting the VPS. If the physical server fails, all the VPSs within it are affected. Cloud hosting, on the other hand, usually offers higher resilience because your services can be spread across multiple servers and automatically redirected to other resources in case of failures.

Cost: Cloud hosting can be more cost-effective in some cases, as you only pay for the resources you actually use, while a VPS requires you to allocate resources upfront, whether you use them fully or not.

Technical knowledge: VPS hosting usually requires more technical know-how, because you have to take care of the administration and configuration of the server yourself. In the cloud, much of this management is handled by your cloud provider, which reduces complexity.

Geographic limitations: With a VPS, you are typically limited to the location of the physical server. If you need global presence or want to offer your services in different regions, the cloud is often a better choice because you can choose locations in different regions.

Vendor dependency: With a VPS, you are tied to your hosting provider because the server is physically tied to a specific location. In the cloud, on the other hand, you can maintain vendor independence and easily switch between different cloud providers as needed.

It's important to note that both VPS and cloud have their own advantages and disadvantages, and the choice between the two depends on your specific requirements, technical knowledge, budget, and other factors.

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Why AI in B2B SaaS is not a promising business model

08/23/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

In recent years, artificial intelligence (AI) has revolutionized the business world and transformed numerous industries. Especially in the software-as-a-service (SaaS) space, AI has attracted a lot of attention. However, despite the enthusiastic coverage of the potential benefits of AI in the B2B SaaS model, there are some fundamental challenges and concerns that make this business model less promising. In this article, we'll take a closer look at these critical issues.

Complex implementation and integration:

Integrating AI into a B2B SaaS product is a complex task. Most AI models require extensive amounts of data to deliver reliable results. Companies that cannot adequately leverage their own data or access relevant datasets encounter difficulties in implementing AI in their existing SaaS products. This results in high costs for data collection, cleansing, and integration.

High development costs and expertise:

Developing a powerful AI algorithm requires specialized knowledge and talented data scientists. However, finding such expertise is challenging and expensive. The cost of developing, implementing, and ongoing maintenance of AI in B2B SaaS can quickly go beyond budget and become prohibitive for many organizations.

Lack of transparency and explainability:

Another critical factor is the lack of transparency and explainability of AI decisions. In B2B environments, where complex decision-making processes and liability issues play an important role, it is essential that AI models can make their decisions understandable and comprehensible. However, most deep learning models are so-called "black boxes," meaning that it is difficult to understand their decision-making rationale, which can reduce user confidence in the product.

Data quality and ethics:

AI models are only as good as the data on which they are based. If the data used to train the algorithm is of poor quality or contains biases and prejudices, the AI results may be unreliable and inaccurate. This can cause serious problems for companies relying on AI-driven processes and even raise ethical concerns.

Market saturation and competition:

The B2B SaaS market is highly competitive, and many companies already offer established and successful SaaS solutions without AI. It can be difficult to gain a foothold in such a market and convince customers of the need for an AI-based solution. It takes extensive persuasion and investment in marketing and sales to prevail over already established competition.

Conclusion:

While AI undoubtedly offers tremendous opportunities and can be successful in some specific use cases, the challenges and concerns in the B2B SaaS model are not negligible. Complex implementation and integration, high costs and expertise, lack of transparency, ethical considerations, and the competitive market make AI in B2B SaaS a less promising business model. Companies should therefore carefully consider whether and how AI can be meaningfully integrated into their SaaS solutions before embarking on this venture.

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Job hunting in times of challenge: Why IT freelancers in Germany are struggling with inflation, recession and rising demands

08/23/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

For IT freelancers, finding a job in Germany is currently difficult. A combination of inflation, economic recession and ever-increasing demands from clients are presenting more and more IT freelancers with challenges. In this situation, even experienced IT professionals face unfamiliar obstacles and have to deal with the stability and future of freelance work in the IT field.

1. Inflation and uncertainty:

Inflation of 6.2% in Germany, caused by the ongoing war in Ukraine, has far-reaching economic effects. For IT freelancers in particular, this means the need to offer their services at prices that reflect the increased costs. The general uncertainty about future developments means that companies act more cautiously and projects are awarded more hesitantly.

2. Recession at home:

Germany is already in an economic recession for the third quarter in a row, which caused the gross domestic product to shrink by 0.3%. The reluctance of companies when it comes to new projects and investments has a direct impact on the demand for IT freelancers. With shrinking project budgets, outside experts are often the first to be crossed off the list, leading to a noticeable slump in orders.

3. Increasing demands from clients:

The demands of clients have skyrocketed in recent years - a development that poses particular challenges for IT freelancers. The expectation of the "perfect solution" is increasing, which raises the hurdle for many freelancers. Those who do not meet all the required criteria have a harder time acquiring orders.

4. Challenges for startups:

The once-bubbly startup scene faces its own difficulties. The bursting of the startup bubble and difficulties in raising or follow-up funding are impacting the availability of projects once offered by burgeoning startups.

5. The Impact of Rising Interest Rates:

Increasing interest rates have created a domino effect. Companies are more reluctant to make investment decisions, which is hampering demand for IT projects. At the same time, startups are also affected by this development, as financing options are narrowing.

In this demanding phase, flexibility is of the utmost importance for IT freelancers. The ability to adapt to changing market conditions, close cooperation with clients and the targeted search for niche markets could offer ways of asserting oneself in this challenging economic situation. Continuous training and the willingness to rethink existing business models are indispensable. The freelancer community is entering a period of change where adaptability and the spirit of innovation are more important than ever.

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What role do Agile methods play in project management today?

08/23/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

Agile methods are a significant practice in project management today.

Agile methodologies are a set of approaches aimed at promoting flexibility, collaboration, continuous improvement and rapid delivery of products and services. Agile is based on the principles of the "Agile Manifesto" which focuses on the following values:

Individuals and interactions are more important than processes and tools. Working software is more important than comprehensive documentation. Cooperation with the customer is more important than contract negotiations. Responding to change is more important than following a plan. Agile methods encourage projects to be broken down into short, iterative development cycles (sprints) where priorities are regularly reviewed and teams can respond quickly to changes. A prominent example of an agile framework is Scrum, where the project is broken up into sprints of 1 to 4 weeks, and there are short daily meetings (daily stand-ups) to discuss progress and remove roadblocks.

Agile methods have gained importance in many industries and companies in recent years. They offer some advantages like:

Better adaptability to changing requirements and circumstances. Early and continuous delivery of workable products or services. Improved transparency and communication between team members and the customer. Continuous improvement and adjustment based on customer feedback and experiences. It can be expected that Agile methodologies will continue to play an important role in project management as they have proven to be powerful and effective in tackling complex and dynamic challenges. However, you should always consult current sources to keep up to date with the latest developments, as business practices and technology may be constantly evolving.

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Slight increase in consumer bankruptcies in the 1st quarter of 2023 in Berlin

08/22/2023 | by Patrick Fischer, M.Sc., Founder & Data Scientist: FDS

The Berlin-Brandenburg Statistics Office today published the latest data on consumer insolvencies in the first quarter of 2023. A total of 1,043 insolvency proceedings were filed against "other debtors" (including shareholders, formerly self-employed persons, consumers and estates) from January to March. This marks an increase of 2.6 percent compared to the previous year.

Outstanding accounts receivable for the period amounted to EUR 77.5 million, a decrease of 4.6 percent compared to the same period last year when accounts receivable amounted to EUR 81.2 million.

987 of the requested procedures were opened. In 40 cases, however, the case was dismissed for lack of assets, since the debtor's assets were not sufficient to cover the costs of the proceedings. In addition, 16 procedures were completed with the acceptance of a confirmed debt settlement plan.

The proceedings were spread across different groups of debtors. In the first quarter of 2023, a total of 286 insolvent former self-employed were recorded, which corresponds to an increase of 38.2 percent compared to 2022. The liabilities of this group increased by 4.0 percent to EUR 43.9 million. In contrast, 733 procedures were opened against consumers affected by insolvency, which represents a decrease of 7.2 percent compared to the previous year. The liabilities of this group fell by 8.8 percent to EUR 32.0 million. The average debt per consumer was around EUR 43,600, slightly below the level of the previous year.

Looking at consumer bankruptcies by district, most cases were recorded in Marzahn-Hellersdorf and Lichtenberg, with 98 and 82 applications, respectively. The lowest number of over-indebted people was reported in Steglitz-Zehlendorf with 36 cases. With regard to the average debt per consumer procedure, Charlottenburg-Wilmersdorf and Tempelhof-Schoeneberg stood out with values ​​of around EUR 87,100 and EUR 57,300, which clearly exceeded the state average.

An important comment on the interpretation of the data concerns the development of consumer insolvencies since mid-2020. This should be seen in connection with a change in the law that provides for a gradual reduction in residual debt discharge procedures from six to three years. This new regulation applies to consumer insolvency proceedings that have been filed since October 1, 2020. It enables those affected to start a new business faster after the insolvency proceedings have been completed. This could explain why many over-indebted private individuals temporarily withheld their bankruptcy applications in order to benefit from the new regulation. From the beginning of 2021, these "catch-up effects" led to a sharp increase in consumer bankruptcies, which has apparently leveled off in the meantime.

Overall, the figures for consumer bankruptcies in the first quarter of 2023 in Berlin illustrate the complex economic challenges faced by individuals and formerly self-employed in an ever-changing economic landscape.

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