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Ask HN: How to evaluate a startup's cloud costs?
Hi there!
What would you say are meaningful metrics for startups / tech companies cloud infrastructure costs that one should look into and monitor closely?
So far I have come by the following metrics:
- Cloud Cost as % of Cost of Revenue
- Cloud Cost as % of ARR
- Total Annual Cloud Cost by Company Headcount
Do you think these are useful? Would suggest another metric?
References (with values):
[1] https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap-cloud-lifecycle-scale-growth-repatriation-optimization/
[2] https://cms.harness.io/uploads/Harness_Saa_S_Cloud_Spend_Survey_2020_884eb6a583.pdf
- dmarlow 4y agoYup, absolutely useful. Also good for companies to know how they stack among peers in their industry. Some are more difficult to figure out than others: - Cost per tenant/customer - Cost by environment - Cost of/by change (i.e., introducing changes to app or architecture) - Projecting costs into the future - Margins, once factoring in other OpEx costs (huge implications given fast rising cloud costs and companies market cap being reduced as a result of increased costs) - Pro forma capitalization can also be useful, if not required by some finance teams. I could go on about this for days...
- icedchai 4y agoAlso, you should look at these costs with and without the non-production (dev, test, staging, etc.) costs. In some startups, this is easier said than done because they're running everything in a single cloud account. Obviously that is bad for many reasons, but it makes it difficult to attribute costs accurately.