3 ms·

MSFT gross margin is 72B, this number better matches GDP and its c.70 rank by nominal GDP. Interestingly, Luxembourg has $69B GDP with 590K population, MSFT's "

MSFT gross margin is 72B, this number better matches GDP and its c.70 rank by nominal GDP. Interestingly, Luxembourg has $69B GDP with 590K population, MSFT's "population" is 131K. Each MSFT citizen is 4.5x more productive. And Luxembourg is the top country by nominal GDP per capita.

sytelus 7y ago
It’s not that MSFT citizen is 4.5x productive but rather they are able to create product that is inexpensively and infinitely replicable. On the other hand majority of Luxembourg citizens probably are mainly just renting their time which is highly limited resource. I would actually expect much bigger ratio.
Traster 7y ago
Is Gross Margin closest to GDP? In GDP when I sell Paul a loaf of bread for £5 I'll probably make £4 gross margin but my revenue is £5. GDP measures the total cost of the output, not the output minus the costs (in fact for the GDP of the whole system it's output PLUS costs since the costs count as outputs of other people in the economy) I think a better comparison would be revenue surely?
- buybackoff 7y ago
  Company costs are revenues to someone else (even payroll is then spent on goods & services). Revenue will double count. Also I just did a very quick number lookup without pretending for scientific correctness, just became curious after reading the parent comment. GDP is C + I + G + NX. In MSFT 10-K R&D are after the gross profit, so I is there. C attributable to MSFT is sales less costs to avoid double counting. G are taxes which are also there. We should also add D&A and Capex normally as a part of I, but for software companies it's mainly R&D that is allowed to be recognized as cost (which gives huge tax benefits and should stimulate R&D activity, in theory).
btown 7y ago
The MSFT campus is practically a utopian city. I actually think that if you included contractors, support, restaurants, city utilities, etc. you’d have a reasonable basis for a high-producing self-sustaining economy.
- buybackoff 7y ago
  Isn't this economy called Seattle?
  - btown 7y ago
    Referring more to just their campus in Redmond, including surrounding residences and corporate housing: https://www.google.com/maps/place/Redmond,+WA/@47.6425094,-122.1328938,15.39z/data=!4m5!3m4!1s0x54900cad2000ee23:0x5e0390eac5d804f2!8m2!3d47.6739881!4d-122.121512 https://www.google.com/maps/place/Redmond,+WA/@47.6425094,-1...

sytelus 7y ago

It’s not that MSFT citizen is 4.5x productive but rather they are able to create product that is inexpensively and infinitely replicable. On the other hand majority of Luxembourg citizens probably are mainly just renting their time which is highly limited resource. I would actually expect much bigger ratio.

Traster 7y ago

Is Gross Margin closest to GDP? In GDP when I sell Paul a loaf of bread for £5 I'll probably make £4 gross margin but my revenue is £5. GDP measures the total cost of the output, not the output minus the costs (in fact for the GDP of the whole system it's output PLUS costs since the costs count as outputs of other people in the economy) I think a better comparison would be revenue surely?

buybackoff 7y ago
Company costs are revenues to someone else (even payroll is then spent on goods & services). Revenue will double count. Also I just did a very quick number lookup without pretending for scientific correctness, just became curious after reading the parent comment. GDP is C + I + G + NX. In MSFT 10-K R&D are after the gross profit, so I is there. C attributable to MSFT is sales less costs to avoid double counting. G are taxes which are also there. We should also add D&A and Capex normally as a part of I, but for software companies it's mainly R&D that is allowed to be recognized as cost (which gives huge tax benefits and should stimulate R&D activity, in theory).

btown 7y ago

The MSFT campus is practically a utopian city. I actually think that if you included contractors, support, restaurants, city utilities, etc. you’d have a reasonable basis for a high-producing self-sustaining economy.

buybackoff 7y ago
Isn't this economy called Seattle?
- btown 7y ago
  Referring more to just their campus in Redmond, including surrounding residences and corporate housing: https://www.google.com/maps/place/Redmond,+WA/@47.6425094,-122.1328938,15.39z/data=!4m5!3m4!1s0x54900cad2000ee23:0x5e0390eac5d804f2!8m2!3d47.6739881!4d-122.121512 https://www.google.com/maps/place/Redmond,+WA/@47.6425094,-1...