Is your cloud computing costs causing you to raise a bridge round?
Bridge rounds are viewed as distressed rounds and thus harder to close and immediately puts you on your back foot… let’s avoid that when talking to current and future investors. Not only will a high opex cloud spend pose near-term cash flow challenges it will also impact future fundraising conversations.
Cost optimization challenges grow with usage. It's common for companies with monthly cloud spend of at least $1,000 to be overspending by 60% or more. Companies with less than $25k/month in cloud spend can frequently pay for an engineer with the amount of money that they overpay to cloud service providers.
Optimization by its name is an ongoing, dynamic process that requires consistent monitoring and management. Here are some places to look to reduce cloud operating costs from our friends at Sunshower.io:
1- Unused Reserved Instances (RIs) could be a source of contractually locked in wasted money. Read this before you buy a Reserved Instance
2- Knowing how to fit an instance becomes crucial to know how to save money. To appropriately fit you instance needs starts with knowing what you’re actually using, resource-wise with CPU and Memory the two big drivers of cost and then smartly applying logic to best predict future usage. Here’s an example of How to optimize on Resource Utilization Data.
Regularly tracking usage with an ability to create a smart plan for savings that leverages all of the available pricing options and instance types you can choose from is your ticket to bringing your cloud costs under control.
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Drop us a note if there are topics and challenges you would like us to tackle preventing you from getting to Product-Market-Fit, scaling-up, or getting fund!