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How do they turn those losses into profit? Raise prices by 50%?
by COGlory 6y ago
How do they turn those losses into profit? Raise prices by 50%?
- nojito 6y agoYou slowly eliminate free tiers and crank up pricing on usage. Google maps is a great example.
- eitally 6y agoConvert customer commits into consumption. Mature the ISV and SI ecosystem so partners build the business for them. Acquire profitable companies to fill critical gaps. Create differentiated industry solutions and products and sell them based on business outcomes (value based pricing, consulting model). Just a few ideas.
- fastest963 6y agoThey're probably spending a ton on marketing and datacenter growth. You'd slow down those if you wanted to make more profit. Right now they're trying to grow as fast as possible and are okay losing money in the short term.
- beaconstudios 6y agoah, losing money in order to grow. Also known as investing! It's irritating how journalists spin this to imply a company is haemorrhaging cash.
- shishy 6y ago"loss leadership"!
- refulgentis 6y agoArticle says data centers. They're the chicken that comes before the golden egg
- fred_is_fred 6y agoHow do you "spin" actual financials? They are in fact "haemorrhaging cash". Whether it's a good idea or not is another story.
- beaconstudios 6y agothe story is the spin. "Google Cloud lost $5.6B" strongly implies "isn't making money". The reality is that they are reinvesting. But "Google invests in Google Cloud" is not a story, so it gets spun.
- hn_throwaway_99 6y agoGoogle spends a ton to attract startups, who can essentially get a free year on GCP. Some of those startups will get big and then that $0 annual spend will turn into multi-million annual spend.
- langitbiru 6y agoThat's correct. I got USD 3,500 credit in GCP for my startup.
- wodenokoto 6y agoStop expanding. They don't have losses because it costs them 1 dollar to operate a VM that they sell for 70 cents. They have losses because they are paying for construction of datacenters that are to be utilized in the future.
- woofie11 6y agoAt least when GCE tried to recruit me -- now almost a decade back -- it was with millions of dollars of concessions where they would clearly be operating at a loss. We tried them. If, instead of $$$, they had treated customers like human beings rather than statistics, that might have paid off. As is, I'd say the effect was literally the same as if Google had poured millions of dollars into the California wildfires by quite literally dumping paper dollar bills into the fire. Google lost a bunch of money, and their problem went from few customers to vocal, dissatisfied ex-customers.