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“We’re going to help companies optimize their AWS bill as a service!” Let's demonstrate why I call myself a Cloud Economist instead of a Cloud Accountant: (1/10)
Let's say you price yourself as a percentage of bill. You shouldn't, I don't, and everyone freaking hates it, but nobody has a SaaS pricing model that works much better than that for this problem. (2/10)
But you're going to go SaaS (your VCs demand it!), and you're going to charge a percentage. Let's say 3%. That's within ballpark of list price for the existing players. (3/10)
(As an aside, people who pay list price for any sort of scale are what we call "suckers." BUT LET'S PRETEND!) (4/10)
Good for you, 3%. With AWS's ARR of ~$30 billion a year, you get everyone in at list price via blackmail, you can see $900 million a year in revenue. (5/10)
Except that the lion’s share of that revenue is concentrated in a small number of companies who will absolutely not pay for a SaaS due to their specialized views / requirements. They certainly won't pay list price. (6/10)
If you’re VC investing in this space, I posit that you've made a poor bet. Add in GCP and Azure and the total market doubles to what, $60 billion? $900 million capped theoretical annual revenue does not a unicorn make. Not a healthy one anyway. (7/10)
SO if you're venture backed in this space, your investors (and you, presumably) are betting that cloud growth continues to soar, while the providers continue to fail to provide reasonable bill analytics. (8/10)
I wouldn't take that bet--and I didn't. (9/10)
I originally thought duckbillgroup.com would be a SaaS platform. Instead it's an advisory consultancy without VC backing--because the economics didn't work. (10/10)
