> If you're open to edits, the $200k revenue/employee rule of thumb really doesn't make a lot of sense when you're comparing your three alternate business models
Sure, but for many venture funded companies and even large enterprises top-line is the top metric you're focused on. If you're in a growth industry it's about top line revenue, capturing market share, and cost of underlying bits will eventually come down.
> turns out to just not be true in practice. People pay us (Cloud SQL) and AWS (RDS) a surprising amount of money to run MySQL in a VM for them.
For infrastructure providers to "service-ize" you can set cost as a much smaller markup on the cost of the raw infrastructure. Most large organizations (AWS/GCE) have a model where they give some credit for the underlying infrastructure back to the team that servicized things. This is quite a bit different from a smaller startup that still needs to make some reasonable margin but has significant cost of goods of the infrastructure itself.
At the same time I fully agree with the notion that you should build and run a service, but if the marketing or even product perspective of such a thing is we installed a VM for you you're entirely missing the point. Having built an as-a-service product a few times over, there is a lot of engineering and product work that goes into it. Turn key backups, point in time recovery, high availability, performance monitoring are all not just installing a VM. And it's very different from building a core database engine. While there can be many benefits from collaborating on them, they are very different skill sets and the notion of focus shouldn't be underweighted.
Sure, but for many venture funded companies and even large enterprises top-line is the top metric you're focused on. If you're in a growth industry it's about top line revenue, capturing market share, and cost of underlying bits will eventually come down.
> turns out to just not be true in practice. People pay us (Cloud SQL) and AWS (RDS) a surprising amount of money to run MySQL in a VM for them.
For infrastructure providers to "service-ize" you can set cost as a much smaller markup on the cost of the raw infrastructure. Most large organizations (AWS/GCE) have a model where they give some credit for the underlying infrastructure back to the team that servicized things. This is quite a bit different from a smaller startup that still needs to make some reasonable margin but has significant cost of goods of the infrastructure itself.
At the same time I fully agree with the notion that you should build and run a service, but if the marketing or even product perspective of such a thing is we installed a VM for you you're entirely missing the point. Having built an as-a-service product a few times over, there is a lot of engineering and product work that goes into it. Turn key backups, point in time recovery, high availability, performance monitoring are all not just installing a VM. And it's very different from building a core database engine. While there can be many benefits from collaborating on them, they are very different skill sets and the notion of focus shouldn't be underweighted.