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Should Dropbox make or buy cloud services?

Summary:
By in-sourcing IT services, Dropbox saved 5 M over two years, doubling its gross profit margin.  Actual spend as a percentage of COR is typically even higher than committed spend: A billion dollar private software company told us that their public cloud spend amounted to 81% of COR, and that “cloud spend ranging from 75 to 80% of cost of revenue was common among software companies”.

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Should Dropbox make or buy  cloud services?

 By in-sourcing IT services, Dropbox saved $115 M over two years, doubling its gross profit margin.  

Actual spend as a percentage of COR is typically even higher than committed spend: A billion dollar private software company told us that their public cloud spend amounted to 81% of COR, and that “cloud spend ranging from 75 to 80% of cost of revenue was common among software companies”. 

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