Smart Savings: Top Techniques to Reduce Cloud Costs for Your SaaS Application

SaaS app development company

March 15, 2024

Reading time about 5 minutes

The world of software as a service (SaaS) is evolving at an unbelievable pace. More and more businesses are adopting SaaS applications to work better and earn more. What concerns most small- to mid-size businesses is skyrocketing cloud hosting costs. In the past decade, many businesses have moved their base to the cloud to achieve more elasticity, scalability, and global deployment. It has not been a cost-effective affair so far. The increasing emphasis on innovation is adding to the cost burden for companies.   

This blog will discuss the top techniques to reduce the cloud costs of your cloud-based management software.  

Skyrocketing Cloud Hosting Costs: An Overview

Every SaaS app development company bears heavy cloud hosting costs that account for 6%–12% of SaaS revenue and their cost of goods sold. The market is already very cluttered, and to survive in this competitive environment, cloud expenses must be lowered to ensure success.   

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To control cloud costs, it’s important to understand the factors that drive these costs. Whether it’s the deployment architecture or the dynamics of engineering teams, every small factor adds to the cloud’s expenses.   

Major Constituents of Excessive Cloud Costs

There are a variety of cloud-related components that pose concerns for every custom software development company. Let’s take a closer look.  

  • Unutilized or underutilized resources 

One of the common mistakes that most SaaS app development companies make is creating resources with forgetfulness, leading to unused assets that prove taxing to the business.   

  • Unaccounted storage costs 

While storage billing is understood, factors like read/write operations and compound costs are overlooked. Accumulated, unnecessary data further inflates bills.   

  • Absence of Infrastructure as Code (IaC) 

Manual resource creation fosters inconsistencies, making it arduous to comprehend and manage the infrastructure efficiently.   

  • Lack of autoscaling 

Without dynamic resource allocation, teams overprovision resources, paying for idle instances.   

  • Lack of formal product discovery 

Vague requirements spawn architectural flaws, hindering scalability and accumulating technical debt.  

Top Strategies to Reduce the Cloud Costs for Your SaaS Application

There are effective ways to reduce the cloud costs. By implementing the following solutions, you can take control of stray cloud costs.  

  • Have an Agile Cloud Cost Governance Program 

Many SaaS app development companies face a hard time controlling their cloud costs effectively. Setting up a flexible system for managing cloud costs can keep things running smoothly. This will help you keep a close watch on the costs. With everyone keeping track of where their money is going, you can pivot anytime without slowing down the team. You can keep innovating and responding to market requirements while staying within your budget.  

  • Prioritize Cloud Transparency 

There might be a difference in approach between businesses and managers regarding the use of cloud resources. Thinking about how these resources are unlimited and free, there might be some discrepancy on their part while using them. The best way to contain this gap is to make costs clear to everyone.  

By talking about costs regularly as part of the process of building products, you can make sure teams understand the financial impact of what they’re doing. This helps everyone make smarter choices about how they use resources, which saves money in the long run.  

  • Find the Balance Between Pricing Model and Customer Usage 

Choosing the right pricing model makes all the difference. There might be discounts offered that businesses are not aware of. The best way to know the right pricing is by matching how customers use the product. By ascertaining what customers want and how they use the product, you can go for fair pricing.   

  • Make Cost-Saving a Deciding Factor in Decision-Making  

Engineers hardly consider how much technology costs to run an ambitious project. There are many promising technologies available on the market. It’s the decision-makers who need to think about the costs while choosing technology.   

When deciding which technology to use in the cloud, it’s important to think about how much it will cost to run, not just what it can do. This helps make sure choices are both effective and affordable.  

  • Implement Infrastructure as Code  

IaC can make cloud resource management a breeze by scripting all infrastructure components in a version-controlled codebase. This approach builds accountability and enables rapid environmental replication. For instance, Terraform, a leading IaC tool, supports multi-cloud deployment, simplifying infrastructure management. Despite initial transition efforts, IaC optimizes resource use, reduces overhead, and enhances scalability.  

  • Deploy Autoscaling  

Autoscaling is another proven way to adjust resource allocation based on demand, adding or removing instances as needed. It can effectively handle traffic spikes and optimize resource usage. While deploying autoscaling in legacy projects, there might be refactoring and architectural changes. It’s crucial to consider autoscaling from the project’s inception to prevent performance issues and cost escalation later on. Addressing scalability concerns early avoids the need for extensive infrastructure rework down the line.   

In a Nutshell

Cloud cost optimization is the lifeblood of any SaaS project to mitigate unnecessary expenses. Identifying major cost drivers is the first step towards reducing cloud spending effectively. Whether through adopting Infrastructure as Code, leveraging Spot Instances, or redesigning your application architecture, cloud cost control is crucial to maximizing cost efficiency.  

Put Your Trust in Clavax’s Expertise

At Clavax, we specialize in helping businesses articulate their cloud cost management needs through our DevOps services. Our team of experts has proven expertise in evaluating your infrastructure, devising a tailored cost-reduction strategy, and guiding you through its implementation, ensuring optimal cost-effectiveness every step of the way.  

Get in touch with us today for a thorough cloud cost audit. 

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