Jeff Bezos's phrase “Your margin is my opportunity” holds true in the software and AI sectors, where companies maintain high gross margins—averaging around 76%—but struggle to convert that into net income. An analysis of 69 publicly traded B2B software companies reveals that the median net income margin is nearly zero. The bottom quartile even loses close to 10% of revenue, while only the top quartile achieves a meaningful net income margin of 16%. Notably, Palantir leads with an 18% net income margin, illustrating the disparity in profitability within the industry. Both enterprise and product-led growth (PLG) segments show similar challenges in profitability despite having slightly different gross margins. Enterprise software has a median gross margin of 76.7%, while PLG/SMB stands at 69.4%. However, both groups struggle with negative net margins, indicating that high spending on sales and marketing—often 40-60% of revenue—coupled with 15-25% on research and development, consumes their gross profits. Companies justify these expenses through long-term contracts and positive net dollar retention, but interestingly, there's no strong correlation between net income margin and revenue growth among these companies. In contrast, Amazon Web Services (AWS) has managed to maintain healthy operating margins, ranging from 25% to 38% over the past decade, despite fierce competition from Google Cloud and Microsoft Azure. AWS's strategy focuses on capital expenditures for data centers rather than customer acquisition, which sets it apart. While many software firms are locked in a spending race to acquire customers, AWS’s success hinges on its ability to scale and control costs effectively. This difference highlights how market dynamics can create significant opportunities for companies that can outspend their competitors, reinforcing Bezos’s assertion about margins.