Ask HN: Why LLM providers sell access instead of consulting services?

3 pointsby pera4 hours ago4 comments

mrdependablea minute ago
They get more data this way. I think their actual end goal is to supplant the software industry.
raw_anon_11113 hours ago
I work in consulting cloud + app dev. Every single project I’ve had for the last year and a half has been Gen AI related in some form. Most of them could have been done before Gen AI using traditional ML. It’s just much easier now.
That being said, consulting is a low margin race to the bottom business if your consultants email address isn’t @amazon.com (been there done that) or @google.com.
Google’s sales staff and SAs and other go to market to chase large deals are still not on par with AWS ProServe or Microsoft’s. It takes a lot of work to build up a good consulting department and no matter what, you still end up - unless you are a cloud provider -going with the Americans are the face for the customer and low paid folks from India do all of the work.
Consulting for cloud companies - either internal or external (where they give credits to customers for third party partners consulting) isn’t about the money they make on consulting, it’s about ongoing spend on their cloud providers and they can also afford to lavish credits on companies. The cloud provider have real profitable businesses
beernet4 hours ago
Consulting has weak margins compared to SaaS and scales poorly. Providing the interface for companies to spin up their own consultants (=Agents like Claude Code) is a superior business model in every dimension.
- pera4 hours ago
  But those margins are for traditional businesses with human workers, if these claims of 100x productivity increase are real Anthropic should very easily be able to outcompete Accenture no?
  - raw_anon_11112 hours ago
    Consulting - especially the more strategy type consulting - is often not about “we don’t know how to do something”, it’s more of “there is so much resistance to change organizationally that not even CxOs/directors can push it through”.
    Besides selling consulting services involves a lot of relationship building and knowing the business vertical.
- farseer4 hours ago
  Yup, because LLM inference can be scaled by adding racks of hardware. Consulting can't be.
aristofun4 hours ago
Because selling sophisticated shovels in the gold rush is much more profitable than finding gold and trying to make and then sell jewelry
- raw_anon_11112 hours ago
  Traditionally yes. But not when your business model (if you can call it that) is selling shovels at a loss to wholesalers (cloud providers) who are making all of the money selling it to customers. AWS, GCP and Azure are all making a killing and the only reason they aren’t more profitable is because they can’t get enough chips.
  Microsoft just said as much in their quarterly filings and unrelated to AI, Cook said they couldn’t meet all of the iPhone demand because of capacity issues at TSMC