[Closi]

> The result? Some SaaS companies achieve gross profit margins of 75 to 90 percent, rivaling Windows in its monopolistic heyday.

Gross profit is a misleading statistic in the software industry, where almost all of the effort comes from building the thing.

[financetechbro]

I wouldn’t say it’s misleading, it’s still a very important financial metric. You just have to be aware of its limitations

[Closi]

I would say it's misleading when it's in a paragraph which is broadly implying that a high gross profit % is a sign of profiteering. See the actual paragraph where the article compares the gross margin of SaaS against the NET margin of Visa/Mastercard.

> Some SaaS companies achieve gross profit margins of 75 to 90 percent, rivaling Windows in its monopolistic heyday. Even the reigning credit-card duopoly of Visa and Mastercard wield a mere 51 percent net margin.

I don't see how anyone can say the above statement or comparison isn't a bit misleading, as the Gross Margin of Visa and Mastercard will be closer to 100% than to 50%.

In reality it's unsurprising that software looks really profitable when you remove all the costs of developing the software.

[rdslw]

In this article using it is very MISLEADING, exactly as Closi writes above.

Exercise: compare net profit of Visa/Master card to net profit of those "highly profitable" saas marvels.

Exercise two: compare gross profits of them.

Result: whole paragraph turns not being true while not aligned with the article opinion and showing actually opposite :-D

p.s. I do agree with the overall article :)