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From a biz perspective, that can be a bad move and signals that you're not in growth phase but in cutting costs to preserve profits. Using cloud derisks you fo
by bfeynman 4y ago
From a biz perspective, that can be a bad move and signals that you're not in growth phase but in cutting costs to preserve profits. Using cloud derisks you for future costs because it's managed for you, and then you allocate capex towards making better features. Doing it locally means having a team of IT admins/professionals you normally only need a few of which also incurs a lot of cost and risk.
- hardware2win 4y agoLets replace 4 cheap admins with 3 expensive devops engs Yaay savings!
- amluto 4y agoSiloing expenses into capex and opex gets a bit silly when the cost effectiveness of that opex becomes low enough. For some cloud services, one can replace it with on-prem or colo’d equipment and recover the capex in months. Similarly, “easy” scalability doesn’t necessarily make up for COGS when scaling up. If I can flip the autoscale switch while I grow to $1bn ARR and pay $750M/yr to the cloud, I’m not doing nearly as well as if I hire ten FTEs and pay $150M in combined capex and opex over two years. (And if my COGS is 75% of the list price, it’s hard to give discounts, pay for sales, etc)