Expense or Investment

Vijay Verma Vijay Verma

Vijay Verma

Conversational AI, Generative AI, Customer Experience Platforms

发布日期: 2019年3月8日
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In 2008 Netflix faced a choice. They could either attempt to build world-class data centers to meet their current and future needs or partner with a public cloud for their infrastructure needs. They ended up going with AWS and this decision has repeatedly been cited as critical for enabling their rapid growth. Netflix saw infrastructure as an expense and looked to offload and manage it.

 Amazon on the other hand, saw their data center infrastructure as an investment opportunity. Something they could build for their needs and to support multiple other companies.

 Netflix's revenue in this timeframe grew from ~1B to 15B. Amazon's revenue grew from ~15B to 232B.

 While both models have their merits, I am a huge fan of Amazon model; convert your expenses into a product/platform and subsequently a P/L. Amazon followed the same pattern with their marketplace, converting from a books marketplace, to marketplace for everything to a marketplace for every vendor to every customer. 

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