So they saved next to nothing? Their yearly operating expenses are in the order of $1.3B, which doesn't even include cost of revenue. $75M savings versus $2600M operating expenses over those 2 years comes out to about 2.8% savings.
Wow thank god some of y'all aren't running these businesses.
It still surprises me every time I see failures to think marginally.
It could also be that there's just no other way to cut anything from their enormous opex (for example fire people or buy less ads). I find this hard to believe but may be true.
One very good strategic reason to do this, I think, would be to gain independence from cloud providers, who unfortunately happen to be your major competitors.
All of the questions you asked before (risks, capex, etc.) all would have been answered during an assessment period. It's almost as if you assumed that none of that was done and that their sys admin group just through together a proposal to move to a colo and their executive management made a decision to do so. That's not how this works.
The number one priority of this type of initiative was cost and reliability. Going exclusively cloud is not a silver bullet for every company - that trope needs to die.
And then the next 10 years you get pure profit? That's still an ROI and significant one.
> One big breakage could wipe off that 75M very quickly.
What specifically would cause a $75M loss? As you said, cloud is not bullet proof.
2.8% of a big number is still a bigger number than 2.8% of a small number. Not sure what point you're trying to make here...
So even if it were a wash financially, it's still a huge plus.