Comment by opsnooperfax
4 hours ago
I think this is a systemic problem of an industry where gross margin is 80% or higher, so you can plow all that extra money into superfluous headcount tasked with objectives of questionable business value. It’s a curse of riches, if you will. The rest of us living on 15 to 30% margins need to think a little harder about what we do and why.
It's worse when you consider these are the only companies that can afford it due to the tax implications of R&D, my understanding was that you still pay the full bill on a developer building something as if you were making profits, even though you're burning their entire salary and other resources on it.
> I think this is a systemic problem of an industry where gross margin is 80%
explain how GOOG's margin is 80%
what methodology do you use to derive that number?
just curious.
Wasn't it always somewhere between 20 to 30% (especially more recently in the 30s) but the real difference is, they're in the billions of dollars, your small business might be in the millions, it's quite a drastic difference altogether.
Its 36% for Q1 2026.
* https://i.imgur.com/3gDVMCk.png
The way I understood the 80% is that is the margin on the actual product. 36% is what remains after the “investments” in moonshot projects nobody asked for.