I was totally confused in that whole article about what they were talking about when they said Gross Margin. How can professional services be included in Gross

I was totally confused in that whole article about what they were talking about when they said Gross Margin. How can professional services be included in Gross Margin? What are they including in COGS? Traditionally, any direct sales costs are included in COGS, but that doesn't seem to be the case here. My take: - Fully loaded infrastructure (as parent) including bandwidth costs - The entire support department (management and office expenses included) - Maintenance coding (if possible to split out from feature coding) I'm assuming all revenue is subscription-based. I agree that any other revenue should be split out and calculated separately. Again, I'd be really tempted to include at least some Sales and Marketing costs in there, too. If you couldn't get the sale without the advert, then technically the cost of the advert is a COGS item. But I get that this is debatable (half of your marketing spend is wasted, etc).