Cloud computing changed the economics of running a software company. Before the cloud, a software company had to purchase physical machines which often required thousands of dollars paid up front. The cloud allowed developers to deploy their applications for free, to operate a business for cheap, and to scale without hiring a dedicated team to manage the servers.

Building in the cloud is cheap, but scaling in the cloud can get expensive. A growing company can often save money by changing which cloud instances and services they use. Reducing the number of server instances, changing the size of compute instances, and changing rules around auto scaling. By using monitoring, dashboards, and regular analysis of where money is spent, a business can find thousands of dollars of wasted spend per month.

There are also broad strategic decisions around cost. One area to study is the use of “managed” services like Amazon DynamoDB, Google BigQuery, and Amazon Lambda. These services are proprietary, and can lead to lock-in. Sometimes they can be quite expensive. But they can save developers hours of time because they are easy to use, and provide high uptime guarantees.

Ran Rothschild works at DoIT International, a company that helps businesses figure out how to save money on their cloud infrastructure. He joins the show to discuss the places where the most money is wasted and how startups can manage their infrastructure in a cost-effective manner. He also tells some stories about significant overspend. Full disclosure: DoIT International is a sponsor of Software Engineering Daily.

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