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This week, Microsoft is announcing an unusual initiative that it hopes will change how the company operates: an internal fee on carbon. As Microsoft takes on more of its customers' operations through cloud-based services, reliance on the utility grid creates real operational and price risk (from outages and volatile prices).
Instead, companies seeking to improve the lives of the world's poor should focus on a more realistic route to profitability: They need to elevate gross margins far above the company average by pushing down variablecosts and boosting the price consumers are willing to pay for a unit of product. Offer an enabling service.
For example, a decade ago, it''s unlikely that small-business owners would have told you that they needed a flexible way to host data and applications, one that preferably turned the fixed cost of computer hardware into a variablecost of renting capacity.
In a follow up HBR article , we interviewed several chief financial officers (CFOs) of leading technology companies and senior analysts of investment banks and distilled seven key insights from those discussions. The first category should describe the amount spent on supporting current operations.
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