2 years ago

If you enjoy a monthly pat on the back while looking over your cloud invoice, believing that on-premises costs would be a great deal higher, then this recent report by venture capital firm Andreessen Horowitz (a16z) was probably a real buzzkill. A16z dived deep into the numbers of cloud versus on-premises total cost of ownership and presented a sobering conclusion: “If you’re operating at scale, the cost of cloud can at least double your infrastructure bill.”

This is because as your business scales and you onboard new customers and build new features, you need a growing amount of compute resources to manage the scale.

While cloud is definitely likely to save you on initial startup costs, as your business scales, you might find that your costs start rising as well.

Make cloud spend a measurable KPI: Most importantly, don’t consider “whatever the cost of cloud is” to be a necessary expenditure.