Dylan Patel

And so when you look at what like certain companies have done when they've acquired a business is they've just crossed the customer acquisition cost or crossed SG&A.

They made the business amazing.

Whether it's like Broadcom with VMware and stuff, it's not really customer acquisition.

They just had a bunch of wasted SGA.

But like this SGA, this customer acquisition, that was most of your cost.

R&D was small, but not like crazy.

And then once you hit critical mass, you just cash, cash, cash, money, money, money, money, money.

But software changes a lot when the cost to build that software that you have tanks like crazy.

You look at non-US markets and the prevalence of SaaS, it's very different.

I will bring up China as an example on a counterpoint.

China doesn't have that much of the SaaS business.

Actually, their cloud business is pretty small too, right?

Relatively to the US.

Despite them importing tons of CPUs and storage historically, right?

Most people just did stuff on-prem and designed their own software because the cost of developing software in China was so much less than America.

That the SaaS business model didn't work as well.

People could just build rather than rent it out and buy it.

And that creates inefficiency in the market.

I'm sure those weren't the best of breed solutions always.

Anyways, that's what the software development costs may be like software developers in 2015 in China were getting paid maybe one fifth of the US and they were maybe twice as good or something like that.