4 ms·
My argument is that spending 10% of their revenue on cloud infra affects their unit economics sufficiently that they'll find it difficult to compete. Perfectly
by halbritt 8y ago
My argument is that spending 10% of their revenue on cloud infra affects their unit economics sufficiently that they'll find it difficult to compete.
Perfectly willing to admit I'm wrong if and when that time comes. At this point, that's my theory.
- alfalfasprout 8y agoYou can't just eliminate that 10%. Even if going to fully bare-metal lowers costs it takes a lot of time and manpower to make that transition. When that investment can be made in other areas that have much more impact it really doesn't make sense. Bare metal works when your workload is well-defined and understood. Then you can actually put reasonable estimates for what you need and hire/purchase infra accordingly.
- halbritt 8y agoNo disagreement here. The balance here is tricky. Based on public data, it seems that Netflix has ~$16B in revenue against $300m/yr cloud spend. 2% seems much more reasonable to me. I feel like a drive toward efficiency is a worthwhile endeavor for a startup in terms of establishing a competitive advantage.