Nilay Patel changelog.com/posts

Your free cloud credits are up. Now what?

Programs like AWS Activate, the Google Cloud Startup Program, and Hatch by DigitalOcean offer free cloud credits to startups to help them grow. For software projects that aren’t eligible for funding through one of these incubators, most cloud providers also offer free tiers and services for a limited time. Google Cloud, for example, offers a free three-month trial and $300 in credits for their services.

In the early stages of development, free anything sounds like a no-brainer. Who doesn’t like free stuff? More importantly, what developer in their right mind would turn down free credits when you’re trying to get a project off the ground?

But cloud providers offer those credits, sometimes up to $100,000, for good reason. Like shopping at Costco on a Sunday morning, once you try, you buy. By the time credits run out, you’re firmly entrenched, with few options: Raise prices? Raise Financing? Those are more than a little challenging in the short term. Migrate? Between the cost of egress and the hassle of reconfiguring your stack, leaving can become more painful than suffering through huge bills every month—even when they severely restrict your ability to reinvest in your businesses growth.

All this to say, if you choose to take advantage of free cloud credits, you don’t want to be stuck navigating labyrinthine pricing structures or planning a major data move on the fly. You need a solid plan in place before they run out, and you have three options:

  1. Keep your current provider
  2. Consider a multi-cloud approach
  3. Switch providers all together

Spending the time and effort to consider what happens after your cloud credits run out, including how much storage you’ll need to scale and how you plan to manage your data, pays off in the long run. Every developer wants their project to succeed.

So, how do you plan for survival and success when your free credits run out?

Option 1: Keep your current provider

This path is straightforward, but not always easy. When it’s all free, tracking usage is probably not on your radar. As projects grow, however, cloud infrastructure becomes more complex and layered. By the time the first bill comes due, understanding your spend can be nearly impossible.

Unfortunately, staying with your current provider means taking on the herculean task of optimizing your storage. Fortunately (or not), this has become such a challenge that there’s a whole cottage industry dedicated to helping you manage your cloud usage and storage bills.

Whether you choose to bring in outside help or not, start by conducting a comprehensive audit of your current cloud instances and spend. Better yet, keep close track of those metrics from the beginning. You’d probably much rather spend your time developing new features and improving your idea, but your budget will thank you for putting on your accounting hat every month to incorporate these eventual expenses into your business model.

Option 2: Consider a multi-cloud approach

If optimization numbers look bleak with your current provider, consider moving at least some of your data to a more affordable cloud. You can approach this in a couple ways:

  1. Use a different provider for any new data you generate, keeping your existing data with your current provider. You’ll still need to optimize your current storage, but this allows you to mitigate future egress fees and puts the brakes on exponential charges as your data grows.
  2. Evaluate your infrastructure to see if there are buckets of data that you could easily separate. For instance, maybe your compute infrastructure is inextricably tied to your current cloud provider, but storage, backup, or archive data could be moved. This approach confers a number of additional benefits, including redundancy and the opportunity to take advantage of better, specialized functionality from different providers.

Moving some of your data to a cloud provider with a simpler pricing structure can mitigate unsustainable monthly bills and make scaling easier moving forward.

Option 3: Switch providers all together

Deep breath. Your third option is to take the plunge and move all of your data to a different cloud provider all at once. To bring this approach into perspective, it’s helpful to look at the long term costs associated with keeping your current provider. While egress fees for moving your data may be intimidating, you could break even in less time than you think by switching to a provider that allows you to scale.

When choosing a new provider, consider the following:

  • Pricing tiers: Cloud pricing from major providers is notoriously opaque with multiple tiers and hidden fees. That’s why many challenger brands in the cloud space often build their business on simple, transparent pricing. Single-tier pricing simplifies forecasting, budgeting, and planning for growth.
  • Ease of use: Learning a new platform takes time. Before committing to a new provider, get to know their UI to get a sense of the associated learning curve. If it’s not easy to run tests on a new platform, you can bet it won’t be low touch in the future, either.
  • Integrations: Pay attention to the native integrations each provider offers. These integrations may better serve your needs than an all-in-one platform because each partner specializes in what they do.

After choosing a provider, work with them to plan your migration. Their sales engineers can recommend the best ways to minimize egress fees, avoid disruption to your customers, and make the process as smooth as possible.

Plan for running out of cloud credits

Free cloud credits can play a critical role for struggling startups and developers. Many successful businesses were born in no small part due to the freedom that free cloud credits offer. Despite their drawbacks, they are, in fact, a good thing for everyone involved.

On the other hand, many projects with great potential struggle to manage increasing costs when those credits run out. That’s why it’s so important to enter into these “free cloud credit” relationships wisely. With proper planning and foresight, it’s possible to achieve a scalable infrastructure system that can springboard your business instead of sinking it.


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