Google Play Store operates at 70% profit margin, Epic v Google court case reveals
Google Play Store operates at 70% profit margin, Epic v Google court case reveals
Google's mobile-based Play Store allegedly made $12 billion operating profit (EBIT) throughout 2021, which seemingly contradicts Microsoft's numbers.
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Yes, if you exclude the research and development costs then most websites have high margins. Keeping it running is the cheap part.
… what kind of research and development do you think went into this, when did this take place, and how much do you suppose it cost?
Follow-up question: Do you actually know anything about software development?
How much R&D went into creating the Google Play store? Probably 100s of millions of dollars so far over the course of about 15 years. Do you not know what R&D is or something? In the US tax code, software development is considered R&D.
And yes, I am a software developer.
Probably 100s of millions of dollars so far over the course of about 15 years.
OK but the claim is that they made ~$12billion in profit in 2021 alone so that actually wouldn't affect the margin that much if true...
That is a lot, however my point is just that margin is a pretty worthless statistic for software since it has such high upfront costs.
It's way more than hundreds of millions.
The actual store doesn't take that much development, but Android does.
Yeah, hundreds is probably a low guess but I'm also excluding Android itself. There Play Store itself has a ton of features most of its end users aren't aware of that are important to it's overall operation and development ecosystem. Off the top of my head it does things like code signing and authentication, security scans, governance and enforcement of rules, payment processing, etc.
Sure, and I have no numbers. My point is that splitting out the store is inherently bad accounting, because it's all of their development of Android that the play store funds.
And… licensing Android/Google Play services pays for that development, not the store revenue.
This is full on basket case delusional.
There is no possibility Google would even consider supporting Android without the play store. It's the entire reason it exists.
Wtf are you talking about? What I said, is that the licensing fees google charges for use of their products already covers the costs of development they put into android. They don’t use Google play store revenues to cover costs, because those costs are already covered before anyone makes a purchase from the Google Play store,
They use play store revenue to justify the existence. Play store revenue is the return on that investment.
Maintaining the platform would make absolutely zero sense without it. The play store is literally the entire point and the only reason Android exists.
Android exists because it was developed by enthusiasts. It was purchased by Google, not created by them.
Anyways, if we look at googles revenue streams, it’s clear that advertising is significantly more valuable to them than Play store, and they get much of their valuable data through the android platform. Personally, I’d argue it’s far more logical that androids continued development serves their advertising business than it is to say that android is an avenue to Google Play revenues.
Research question: where are my customers at all times and what are they doing at all times?
Development goal: Design a system to know where all must customers are at all times and what they are doing.
Lmao unnecessary gatekeeping attempt.
Gatekeeping is important for these kinds of discussions. If I tried to speak authoritatively on chemistry, for example, it would matter if I understood the content being discussed.
In this case, the individual believes hundreds of millions of dollars has been put into researching and developing the Google Play store… I take issue with that, having built similar for internal systems at a fraction of that cost.
Right. Typically you'd sus out whether or not they're qualified to speak about these things by listening to what they have to say instead of immediately
implying they don't know what they're talking aboutasking them to confirm their qualifications, but maybe you just handle social dynamics differently.Curious, since you're comparing what you created to the play store, how many staff did you have working on your version, and how many years have you maintained it for?
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Like the individual you’re replying to, nothing you’re talking about falls into “research and development.”
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So you just don't know what you're talking about then.
Scaling up is by far the cause of the vast majority of the cost of developing truly massive systems, and the number of users you're building for is unconditionally impossible to exclude from the math on anything that touches a server.
Hey man I have a docker compose file that does everything so we Gucci. I'm basically Google.
Seriously, I could make a Facebook clone in a week.
Until it needs more than one user.
Scaling a well written system just requires throwing more hardware at said system. Yeah, you could tune it and tweak it, but that isn’t an ongoing and constant process.
Unless your argument is that they wrote it badly, and continuously improved it as more users were onboarded? Which is a ridiculous concept.
Again, none of this would be part of research and development. You aren’t still researching and developing… after the system is developed. Not unless you’re actually changing things. Can you tell me that last major feature added to the Play Store?
Scaling a well written system just requires throwing more hardware at said system. Yeah, you could tune it and tweak it, but that isn’t an ongoing and constant process.
Okay yeah, this conversation obviously isn't going anywhere if you think the solution to scaling into hundreds of millions of users is just throwing hardware at the problem lol.
Can you tell me that last major feature added to the Play Store?
https://android-developers.googleblog.com/2023/11/power-your-growth-on-google-play.html
You can’t throw hardware at a scaling problem if the scaling problem is related to badly written code. Conversely, you can’t throw development at a scaling problem, if the problem is a hardware limitation.
If you take good code, which is already written to account for scaling, and it needs to be scaled up, what is it you think they do? Rewrite the code? Tweak the code over and over? No, they deploy a second server to employ load balancing.
Look at it this way, if more hardware is never the solution, you’re telling me I can run any code at any scale on my rPi4? Since that’s obviously not what you meant, it pretty easily proves that sometimes the answer is more hardware.
And fair enough on further development, I legitimately wasn’t aware. That said, I doubt that cost isn’t already rolled into the 30% cost referred to in the article. While the original user was arguing an unaccounted for $100 million “initial cost” that was still being “paid off.” I may have dug into that initial comment too much when making my statements.
There is no such thing as a magically built system that scales without continued work.
All the tools that make it remotely possible for smaller developers to scale to moderate (not big, let alone massive) scale are built by big companies like Google. You can't just hand wave away the investment because some of it trickles down.
And yes, literally every line of code is R&D.
There will always be maintenance. That doesn’t even insinuate code writing. You don’t need to constantly rewrite the application as it scales up, that just insinuates bad code. And I highly doubt Google is paying their software developers as well as they are, only to get code that doesn’t scale.
As I said, a properly written application, which would inherently take scaling into account to be considered “properly written” would scale without constant need to rewrite code.
Ignoring that, do you think they are still rewriting parts of the application as maintenance? Going on 12 years and they are still tweaking the original code to support new users? Of course they aren’t, that’s insane.
Neither of those expenses fall into “research and development,” so would have no bearing on the discussion at hand.
So just to get this straight, you are arguing semantics, because you are excluding software development from research and development. I have no strong feelings about that, because I work exclusively in an r&d shop so everything I do is r&d, so I've lost sight of where the line is drawn. Seems silly though.
Additionally, you are citing your personal experience developing what you claim to be a similar system yet you haven't shared details that can be used by others to confirm your experience is comparable to that of setting up and running the Google play store.
Is that right?
See the latter part is what suggests to everyone else that you're not qualified to be contributing to this conversation. Share your experiences to convince folks you know what you're talking about.
Or, I guess we can do things your way.
"Do you actually know anything about software engineering?"
See how much more productive one way is than the other?
Ongoing maintenance is literally part of system upkeep. You don’t include that in R&D costs. That’s akin to including power as a R&D cost.
Total staff involved in development? IIRC that wasn’t your original question, I believe you said something like “total users” or “total staff” in a way that could very easily be read as “how many people are involved today” which is a very different question.
Software development would obviously be included in the R&D cost, while total staff running the system after development would absolutely not be.
Why didn’t I provide information on the project? Because it would be so generalized due to NDA that it wouldn’t be useful. Here, let’s give it a go: The project in question was for a corporation with around half a million users. Serving internal applications to a large number of device types, though admittedly piggybacking on some external infrastructure since OS’s like iOS explicitly disallow self signing applications.
Admittedly, this pales in comparison to the PlayStore which is installed on billions of devices, though you won’t find many who have worked on something scaled that massive.
Did that explanation help? No of course not, because it provided so little information that it’s all but useless. It also doesn’t actually show that I know what I’m talking about. How was I involved? Was I a useful worker? How long was I part of the project?
Your question is just a long winded way of asking what I already did.
Ah, I was referring to maintenance as in the software development you need to do to maintain a competitive service for 15 years. Something like Google play wasn't just "set it and forget it", it's continually been updated. That falls under r&d.
No, I just meant how many software engineers you had working under you. I'm barely transitioning from doing pure development to also being in charge of managing some projects, and the one thing I learned on this end is that engineers are expensive :)
That's actually hugely helpful! It's a wide customer base, and there are multiple device types. That's pretty big! Folks now know that you at least have dealt with something in a similar vein as the Google play store. Are you allowed to say if it was spun up internally or vendor provided?
Even though you could have answered your own question with this, here's what I believe the difference lies: did you feel like I was gatekeeping you when I asked for more details about your experience?