"To get in the game, you must spend billions of dollars building data centers and buying technical gear. Once you've done that, you can rent computing power, storage, and other valuable services out to companies, governments, and developers. That revenue comes back relatively quickly, and it's profitable. You take a portion of that income and funnel it back into building more data centers and buying more gear. That makes your cloud service bigger and better, attracting more paying customers, and the circle continues."
"Take Meta, for example. While it's also spending billions of dollars on data centers and technical gear, it doesn't have a cloud service, and therefore lacks a clear way to get a quick return on this heavy investment. This is part of the reason Meta shares slumped this week. CEO Mark Zuckerberg doesn't have a clear enough answer (yet?) for how all this infrastructure investment will pay off for Meta shareholders."
Amazon, Microsoft, and Google operate the largest cloud businesses and achieve unmatched scale. The cloud model requires massive capital spending on data centers and equipment but enables rapid, profitable revenue by renting computing, storage, and services. Profits are partially reinvested into more infrastructure, improving services, attracting customers, and sustaining momentum quarter after quarter. Meta is investing heavily in data centers and technical gear but lacks a cloud offering to monetize that infrastructure quickly. The absence of a comparable cloud strategy has weakened Meta's ability to show returns and contributed to investor uncertainty.
Read at Business Insider
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