Last Updated 2024
Cloud Cost Benchmarking Tool
How efficient is your cloud spend relative to your peers?
In spring of 2024, we partnered with Benchmarkit to survey over 700 SaaS companies to understand their cloud spending patterns. This is what we found:
1.
Costs Consume Up To 10% Of Revenue
Almost half (42%) of companies spend between 6-10% of their revenue on cloud costs.
2.
Cloud Costs Can Significantly Affect COGS
Cloud costs represent a significant portion of many companies’ cost of goods sold (COGS).
3.
Code Optimization Reduces Cloud Costs
There is a significant opportunity for more organizations to use software code optimizations, rather than traditional architecture optimizations, as a cloud cost-reduction technique.
4.
VC-Backed Firms Prioritize Cloud Budgets
Venture capital-backed companies allocate budgets for cloud expenses more frequently than public or private equity-backed companies typically do.
5.
Many Companies Lack Cloud Cost Controls
Less than half of companies have a formalized cloud cost management program in place.
2024 Cloud Cost Benchmarks Report
How efficient is your cloud spend relative to your peers?
Calculate your own CER and see how it compares to your peers.
Cloud Efficiency Rate
We get asked all the time, “How do I know if I am spending efficiently in the cloud?” A simple but strong method of quantifying efficiency is to understand how much of your revenue goes toward your cloud spend. Another way to think about it is, “When we spend a dollar in the cloud, how much do we get back?”
CloudZero developed a new SaaS metric called Cloud Efficiency Rate (CER) to help digital businesses evaluate their cloud efficiency.
CER = (Revenue – Cloud Costs) / Revenue
What is considered a good CER? Based on some earlier research of public companies using CloudZero, we found that the:
- Minimum CER is 81%. This was the least cloud-efficient customer in our dataset.
- Maximum CER is ~100%. Numerous customers approached 100% CER — where their cloud spend was less than 1% of their revenue.
- Average CER is 95%. For context, all of the customers we analyzed are public companies, so this potentially gives an idea of elite CER.
How Do You Track?
Ever wonder how your cloud spending compares to your peers’? Enter your own data and see how you stack up with other companies included in the survey.
Financial Control And Predictability In The Cloud
Eliminate wasteful spending, ship efficient code, and innovate profitably — all in one platform.
