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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.
Cloud service providers are increasingly proxies for utilities — they require 100% uptime, significant quantities of their own power, and predictable variablecost (which for renewables is nearly zero). Sales/Becoming the Vendor of Choice. Even so, they will collect north of $10 million, which is enough to buy offsets.
The logic, according to the International Energy Agency (IEA) and banks like HSBC, is this: as the world migrates away from carbon-based fuels, trillions of barrels of oil and billions of tons of coal — the assets sitting on the books of energy companies — will become “stranded,” or worthless.
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. For example, Twitter provides “cost per ad engagement.”
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