But many businesses don’t have insight into where that money goes and whether or not they’re pricing their products accordingly. CloudZero Founder and CTO Erik Peterson sat down with Erik Carlin, Founder and CPO at ProsperOps, to talk about the transition in cloud cost optimization from 1.0 to 2.0. They explored what data engineering teams need to make informed buying decisions, how to turn data into actionable intelligence, and why you should view cloud costs as an opportunity for ROI.

CloudZero’s research has determined that as many as 60% of SaaS business leaders feel their cloud spend is higher than it should be. Considering cloud spend is a dominant portion of a SaaS company’s operating costs, unexpectedly high cloud bills can be a significant problem. While many SaaS leaders use discount plans to stem the bleeding, we believe the better solution lies with giving your engineers the tools to track and optimize costs as they build.

Many SaaS businesses emphasize customer acquisition and retention over growing gross margins, especially during the startup and scale-up stages. It makes sense. A company can grow its revenue faster if it acquires and retains more buying customers as opposed to simply selling more to existing customers. Yet, here’s the thing. Revenue growth measures the increase in the amount of money a business takes in from sales.

CloudZero just closed at $32M Series B fundraising round in the weakest funding environment since the dawn of the pandemic. The round was led by Innovius Capital and Threshold Ventures, with continued support from existing investors Matrix Partners, Underscore VC, and G20 Ventures. CloudZero is a SaaS product, a data-dense platform delivered via the cloud, mostly to other SaaS companies and digital native businesses (DNBs).

This isn’t the “good old days” anymore. It used to be that cloud companies could pursue growth at all costs and still garner the support of venture capitalists and other investors. In 2023, however, with costs rising and margins getting narrower every day, investors are now favoring companies that can ensure long-term profitability rather than just growth. Now, more than ever before, it’s crucial to drive toward SaaS profitability as the ultimate goal.

If you’re going through a merger or an acquisition, you’ll soon have to assemble all the cloud account data from two or more organizations and blend it together to fit your new, larger organization. You may be bringing the companies together to form a new entity or simply absorbing one company into the other; the details don’t matter, because the solution is the same either way.