Re:Ahrefs Saved US$400M in 3 Years by Not Going to the Cloud
by amluto on Friday March 10, 2023 @10:21AM
(#35095438)
Siloing 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)
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)