As more and more businesses look to expand their gross margin via public cloud resources, they are also looking for ways to cut the costs of this upkeep.
Join the DZone community and get the full member experience. In Q1 2021, Zoom reported that its gross margin widened to 73.9% from 69.4% in the previous quarter, primarily thanks to the optimization of public cloud resources. And Zoom is certainly not the only company that realized the value of optimizing the cloud infrastructure. As businesses migrate their workloads to the cloud and build cloud-native applications, they’re starting to realize that overprovisioning and cloud sprawl aren’t just urban legends. For startups, the cloud is an essential technology because of its unparalleled support for scalability. But the cloud may quickly turn into a struggle because of growing costs. Here’s what a16z wrote in a recent analysis: “[…] across 50 of the top public software companies currently utilizing cloud infrastructure, an estimated $100B of market value is being lost among them due to cloud impact on margins — relative to running the infrastructure themselves.” How can companies deal with the long-term cost implications of the cloud? Cloud cost optimization is the best answer. Service ownership is a key problem in taming cloud costs. Tracking the teams’ responsibility for the cloud bill and keeping costs down is a pain. To handle this, Spotify developed a homegrown solution called Cost Insights that tracks the company’s cloud expenses. By doing that, Spotify allows engineers to take ownership of cloud spending. Spotify also helps its developers by providing suggestions about optimization strategies like autoscaling solutions within the portal. The internal crowdsourced document called Our Cookbook allows engineers to submit insights on what has worked for them in terms of system optimizations to help other teams.
