Nobody on earth would suggest that google's margins are derived from their revenues minus the cost of 'electricity'.
They are a services company, pure and simple. Their 'gross margins' are their revenues, minus royalties to web-sites - that's it.
Their costs are R&D and Sales & Marketing - and a little bit of ops - that's it.
Agreed they could do it with 1/3 the staff, but it's not an issue of 'gross margins'.
To be slightly pedantic, I did assert that and I do live on Earth :-). But to be fair, the claim is a way of illustrating the challenge.
In the goods economy the analysis of a widget factory and the widget business might reasonably start with the cost to the factory of the parts that were consumed in assembling a widget. This is something of a game where folks tear down the electronics of our age and tell you what the cost is of each of the parts in the gizmo. So we'll start with "An iPhone is only $245 in parts."[1] and it cost $650[2]. And then start walking through the costs that are also incurred by the widget maker until you run out of costs and are left with profit (or loss).
And one way in which we know that its not too far off to consider that as the first cost are Google's public statements about power efficiency[3]. Power is their "raw material of most impact."
And that is another way of saying that without R&D or Sales or Marketing people could buy and use their product but without power or "a little bit of ops" they have no business. And since HWOPS/SRE are the goods economy equivalent of factory workers and manufacturing engineers, an information business' core production capability is just those groups and the electricity they use.
Of course if you really want to get metaphysical consider who pays for the electrons and photons that compose the product as it moves from data center to my computer screen. Its like a giant marble game where the electrons cascade through the chips, one of which turns them into photons, and theh they fly through a fiber and kick of another cascade of electrons which result in more photons, and they bounce through the system until the photons they create emerge from my screen in the form of a search result.
[1] http://www.techinsights.com/teardown.com/apple-iphone-6s/
[2] http://www.apple.com/shop/buy-iphone/iphone6s
[3] The system cut power usage in the data centers by several percentage points, "which is a huge saving in terms of cost but, also, great for the environment," he said. -- https://www.bloomberg.com/news/articles/2016-07-19/google-cu...
What is true is that we've probably reached the point where competition for programming jobs will put negative pressure on salaries. Basically Google and AWS make 90% gross margin on the electrons they convert from electrical power to search advertising or web services. They can live on probably a third of that. Today we see the excess margin being spent on speculative things (Google X as an example) but as the margins get squeezed that will go away, then excess salary will go away. We talk about ageism but really there is a ceiling on salaries for most people and if they aren't in the "special 1%" they are replaced by cheaper people as soon as their salary hits that peak. That used to be around 50 now it seems it is around 40 and has been coming down nearly linearly for the last 5 years. Basically any job that can be done by someone fresh out of college with a modicum of search skills on Stack Overflow or other forum sites is going to have zero real wage growth.
I had a really interesting exchange with senior folks at IBM talking about office space and office plans. Looking at it at the surface, saving money on office space helps increase the money you can pay the employees and keeps margins up. But when you look at it in the context of dollars of margin per employee, it makes no sense at all.
Consider a classic "widgets" company. Perhaps 5 people designing widgets, 10 engineering the parts and designing flows for assembling them, maybe 20 on a factory floor putting them together, testing them, and putting them out for shipping. All to sell thousands of $45 widgets making $15 gross margin. How much do you spend on office space for those 35 people affects if it is $15 gross margin or $10 gross margin. But when you have 3 people designing, 2 developing, and 2 testing and releasing a software product that sells millions of units at $4 with $2 gross margin, you have cut revenue per sale 10x but increased sales 1000x. And because the employees are still living in the lie about "we have to keep costs down" you get these companies pocketing billions of dollars in free cash flow that they just sit on.
The economics of information are completely different than the economics of goods and using "classic" economic analysis you get really out of whack numbers and expectations. Think about this, Google could literally lay off half the engineers in the company with zero impact on their revenue numbers.
It will be interesting to see how this settles out, I don't expect programmers to suddenly get a proportional share of the revenue from information goods, but I also think work is going to be vastly different. I can easily see the goods economy moving to large conglomerate fabricators like FoxCon which end up manufacturing anything and everything to the wishes of a handful of designers and engineers. Their forte' is electronics, LG has appliances pretty much sewn up (no pun intended), can you imagine if Ford or Toyota could create the 'foxcon of auto manufacturing' ?
Existing economic models have a bunch of ways GDP recirculates in an economy, those ways are mostly toast in an information economy leaving behind giant pools of cash. Finding a way to put that cash back into the economy will be the challenge for the information revolution.