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by marcosdumay 192 days ago
As a rule, organizations are created to avoid the transaction costs on those detail tasks. If you externalize every single supporting task into a market, you will be slowed down to a drag, won't be able to use most competitive advantages, and will pay way more than doing them in house.

But removing the market competition is a breeding ground for inefficiency. So there's a balance there, and huge conglomerates tying their divisions together serves only to make the competitive ones die by the need to use the services of the inefficient ones.

1 comments

My four years at AWS kind of indoctrinated me. As they said, everytime you decide to buy vs build, you have to ask yourself “does it make the beer taste better”?

Don’t spend energy on undifferentiated heavy lifting. If you are Dropbox it makes sense to move away from S3 for instance.