gross margin is unquestionably the metric used to gauge software companies. That's why we are so scalable. Especially SaaS. It's because our COGS are typically so low that we can afford relatively large R&D budgets (compared to other industries).
Lots of software companies have gross margin's north of 60% or even 80% (GOOG, afaik) which is unheard of in other industries.
If you focus your business on growing revenue and having a reasonable gross profit margin, you are focusing on the right knobs. If you are focusing on decreasing R&D as a means of maximizing net profit, you are focused on the wrong things.
Lots of software companies have gross margin's north of 60% or even 80% (GOOG, afaik) which is unheard of in other industries.
If you focus your business on growing revenue and having a reasonable gross profit margin, you are focusing on the right knobs. If you are focusing on decreasing R&D as a means of maximizing net profit, you are focused on the wrong things.