It all started with a simple Slack message. If you need a refresher, gross margin is a business metric that calculates what percentage of revenue you take home as profit. To calculate it, you subtract your costs (often abbreviated as COGS, short for costs of goods sold) from your revenue and divide it by your total revenue, et voilà, gross margin. So, if your annual revenue is $10M and your COGS are $3M, your gross margin is 70%. Gross margin plays an integral role in SaaS company valuations.

When a company moves from an on-premises data center to the cloud, they expect changes to affect engineering decisions and functionality. After all, their whole way of building and supporting new products has changed. What many companies don’t expect is that the switch to working with cloud providers also necessitates new budgeting and accounting practices.

With containerization, you can write an application once and run it anywhere. Along with portability, containers are also much more resource-efficient than traditional virtual machines (VMs). However, managing containers at scale can be challenging. Besides, many teams find container orchestration platforms like Kubernetes overkill and too complex.

CloudSpend: Cloud cost management With the rising popularity of a hybrid cloud strategy, businesses need to keep their spending in check. To provide high availability for its data, more organizations have started to adopt a multi-cloud strategy, and they have choices for cloud platforms. AWS and Azure accounted for the lion’s share of the market in 2022. With their expertise in providing IaaS, this has also often resulted in disparate deployments with respect to cost estimation and control.

One of the most challenging aspects of running a SaaS business is dealing with highly variable costs. Every service you provide needs resources, and the demands for those resources fluctuate. Just when you think you’ve got this quarter’s budget nailed down, an engineer makes a restructuring decision or a new feature launch exceeds expectations (or falls flat). Suddenly, your bill looks totally different than what you were expecting.

Is your enterprise still paying the sticker price for cloud services? If so, you’re probably leaving a significant amount of money on the table. Once your company surpasses the level of “large business” and begins growing into a full-fledged enterprise, it likely qualifies for enterprise discounts offered by each of the major cloud providers. The most well-known of these would be the Enterprise Discount Program (EDP) offered by Amazon Web Services (AWS).

Building quality software is tough. Even automation requires skilled developers to make it work. Yet, good developers are in short supply. You could offer attractive packages, too. Think: hybrid working, breakfast burritos, and organic chicken wings every Wednesday. You'll still need to ask the right DevOps interview questions to find and hire qualified DevOps engineers.

At CloudZero, we advocate measuring every cloud cost metric that makes the most sense for your business. When you know your company’s unit economics inside and out, you can better inform each department, show them how to make smart decisions based on the information, and ultimately maintain control over your margins. One of the most universally useful metrics to track is cloud cost per customer.