4 ms·

Companies amortize capital expenditures, while monthly service costs are a separate line item (operating expenditures). I think there's also a perception that d

Companies amortize capital expenditures, while monthly service costs are a separate line item (operating expenditures). I think there's also a perception that deploying and support physical hardware has higher labor cost associated. If it take one IT staffer per every X PCs, the presumption might be that X is higher when the "PCs" are virtual. But mainly, companies aren't doing what you're doing: looking at the five-year cost. They don't care what it costs over five years, or often even over one year. This quarter, the cost for that beast is $474. Can you deliver an 8-CPU PC with 32GB of RAM for $474? Today? Then the MS offering is better. Also, when you lay off an employee, you get to stop paying for their Windows license, instead of it being a sunk cost. There's definitely a reason they're targeting companies first. The economics make so much more sense in that world.

donmcronald 5y ago
> But mainly, companies aren't doing what you're doing: looking at the five-year cost. They don't care what it costs over five years, or often even over one year. This quarter, the cost for that beast is $474. Can you deliver an 8-CPU PC with 32GB of RAM for $474? Today? Then the MS offering is better. If you're willing to pay $10k over 5 years for a $2k PC, wouldn't there be a ton of financing companies willing to convert the capital expenditure to an operating expenditure for that? Where else can you make 80% annual returns on a capital investment?
- pwinnski 5y ago
  Well, Microsoft is apparently willing to do that, for one. Which is what we're talking about here!
temac 5y ago
> The economics make so much more sense in that world. Actually the economics still does not make any sense in that world, but some people in some companies count things (only) using such rituals that they think it does. Which is, obviously, all that matters.

donmcronald 5y ago

> But mainly, companies aren't doing what you're doing: looking at the five-year cost. They don't care what it costs over five years, or often even over one year. This quarter, the cost for that beast is $474. Can you deliver an 8-CPU PC with 32GB of RAM for $474? Today? Then the MS offering is better. If you're willing to pay $10k over 5 years for a $2k PC, wouldn't there be a ton of financing companies willing to convert the capital expenditure to an operating expenditure for that? Where else can you make 80% annual returns on a capital investment?

pwinnski 5y ago
Well, Microsoft is apparently willing to do that, for one. Which is what we're talking about here!

temac 5y ago

> The economics make so much more sense in that world. Actually the economics still does not make any sense in that world, but some people in some companies count things (only) using such rituals that they think it does. Which is, obviously, all that matters.