This is my read exactly.

Investors need to understand that internet application service providers aren't software companies, and that it isn't reasonable to expect software-company margins (selling CDs for hundreds of dollars) from services providers.

Companies like New Relic, Twilio, etc. have real costs to operate their infrastructure, especially so in Twilio's case where they likely have to make payments to the downstream network operators (not sure on that last point, I assume, but would love to be corrected if I'm wrong)