Q1 2023 Market Map: SaaS Cost Optimization And Management

Q1 2023 Market Map: SaaS Cost Optimization And Management

Featuring Jonathan Schwartz

When we interact with our portfolio companies as well as new investment opportunities, we notice that “profitability” and “efficiency” are two words separated by the word “growth” in almost every sentence.

Three months into 2023, investors continue to use buzzwords like “responsible growth,” “business performance,” and “good marketing” to explain how venture capital-backed companies will do business this year. This may be true, but there is no example of how a business can cut its budget effectively without slowing down its growth in the near future.

Over the past few months, we've researched, featured, and rated over 30 companies, which we've named "The Best Companies of All Time."

What does it mean? The "basic" part of this concerns the present. Investors are knocking on the door to see quarterly updates. Companies that can effectively help you in the long run will not help you if you want to raise funds in 6, 12 or 18 months.

The "gross margin improvement" part of this definition is important because simply cutting costs instead of growing doesn't work. Similarly, accelerating growth with little spending sensitivity will not work in 2023.

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Image Credits: Ibex Investors

In this article, we'll look at new businesses that can effectively and efficiently support organizations in their quest for growth while streamlining and controlling costs in the short and long term.

Given the current market, investors want companies to live up to expectations more than ever.

The business value of this offering is to help businesses continue to grow by optimizing and reducing costs within their existing business structure. However, there is no single solution. For this reason, we have identified three main categories of gross margin improvement:

  • Optimize and manage cloud infrastructure spending.
  • Optimize and manage excess supplier spending.
  • The next generation of FP&A tools.

There is a constant battle against opposition from the CFO's office when it comes time to improve the product (i.e., increase cloud spending) and cut staff.

The CTO and CTO know how to cut cloud costs, but beyond the time it takes to respond to frequent requests for reduction and optimization, it can be hard to know when changes need to happen. Enterprises want to keep growing and operating faster, but they can't change their cloud as freely as they have in the past.

Many companies approach these issues in different ways: Finout, Cloud Zero, Vantage, and Anodot support both enterprise and midsize end users, and provide cloud management and Kubernetes solutions. Some of these operators not only support major cloud providers, but also provide solutions for other cloud infrastructure providers (such as DataDog and Snowflake).

Other companies focus on specific use cases. For example, Kubecost focuses on managing Kubernetes. There are also companies that want to help you cut costs: Zesty (for the cloud) and Cast (for Kubernetes) fall into this category.

Q1 2023 Market Map: SaaS Cost Optimization and Management by Ram Year, originally published on TechCrunch.

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