In Q1 2021, Zoom reported that its gross margin widened to 73.9% from 69.4% in the previous quarter, primarily thanks to the optimization of public cloud resources. And Zoom is certainly not the only company that realized the value of optimizing the cloud infrastructure. As businesses migrate their workloads to the cloud and build cloud-native applications, they’re starting to realize that overprovisioning and cloud sprawl aren’t just urban legends.
For startups, the cloud is an essential technology because of its unparalleled support for scalability. But the cloud may quickly turn into a struggle because of growing costs. Here's what a16z wrote in a recent analysis: