Andreesen Horowitz investors Sarah Wang and Martin Casado recently argued that moving to the cloud hurts profit margins and could cost public companies as much as $500 billion in collective market cap. It’s a bold, controversial claim. It’s also wrong.
Or, more politely and accurately said, their focus on cost savings may be the right answer to the wrong question. “Cost optimization always takes a backseat to decreasing time to market/feature velocity” with enterprise buyers, Duckbill Group Analyst Corey Quinn countered. Not sometimes. Not often. Always. “Fundamentally, companies that focus more on cost optimization/reduction than they do growth tend to be companies in decline,” Quinn continued.
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