Businesses rely on cloud services and infrastructure because they offer flexible scalability, enhanced collaboration, increased accessibility and improved data security, enabling businesses to efficiently manage resources, streamline operations and drive innovation. At first, this route was cost effective. However, as businesses rely more on cloud services and infrastructure, managing the associated expenses is crucial.
CloudZero, a company operating in this space, recognizes the significance of addressing a major expenditure category for modern organizations, known as cloud spend. Cloud spend refers to the costs incurred by businesses for utilizing cloud services, such as computing power, storage, data transfer and other related resources. These expenses can quickly accumulate, particularly for organizations with extensive cloud usage or large-scale operations.
In 2023, it is projected that worldwide cloud spend will amount to nearly $600 billion, highlighting the magnitude of this expenditure category, according to a Gartner report. Also, the fact that 73% of companies, surveyed by CloudZero, consider cloud costs as a board-level issue further emphasizes the importance and impact of cloud spend on businesses.
CloudZero aims to address this issue by providing solutions and tools that enable businesses to gain visibility into their cloud spend, analyze cost drivers and optimize their resource allocation. To provide those solutions, CloudZero raised $32 million in Series B funding to expand its cloud cost intelligence platform. The round was led by Innovius Capital and Threshold Ventures with continued support from existing investors Matrix Partners, Underscore VC and G20 Ventures.
CloudZero's ability to provide granular insights for any cloud provider empowers software teams to collaboratively manage cloud spend down to how a specific product feature or customer impacts margin. What this means is that engineering teams can see real-time, hourly data showing the consequences of software development decisions and can proactively optimize costs before waste occurs.
Unlike other solutions on the market, the CloudZero platform provides:
- CloudZero AnyCost ingests 100% of cloud spend (IaaS, PaaS, SaaS (News - Alert)) in real time, normalizes it in a common data model and presents it in a single pane of glass. This gives every stakeholder the most complete, accurate and granular source of truth.
- CloudZero CostFormation combines billing and telemetry data to allocate every penny of taggable and untaggable spend — including shared resources, multi-tenant architecture and Kubernetes. This enables software teams to understand what is driving their spend and minimize time spent on manual tagging or in spreadsheets.
- CloudZero also makes it easy for engineers to optimize the fixed and variable costs associated with their cloud consumption, including AI-powered anomaly detection. This empowers engineers to prioritize cost efficiency as they build and operate their entire software stack.
"CloudZero recognizes that every engineering decision is a buying decision,” said Phil Pergola, CEO of CloudZero. “It is invigorating for the CloudZero team to come to work every day knowing that we are helping thousands of engineers drive tens of millions of dollars in cost savings, and we are just getting started."
With the new round of funding, CloudZero will expand on these features, advance its enterprise functionality and scale headcount with the goal of helping more customers get the most value out of their cloud investments.
Edited by Greg Tavarez