Business by the Numbers

how to cut expenses

7 Cost-Cutting Tips for Cloud or Internet Businesses

By Business by the Numbers

Cloud services have grown exponentially, and software as a service led in 2017. This sector registered almost 30 percent growth last year alone.

With growth comes competition. The market for SaaS and other cloud services has become much more crowded in the past few years. To compete, you have to be lean and flexible.

That’s why you want to know how to cut expenses. Not only will it help you compete more effectively, it will also help you grow and maximize earnings.

If you’re looking for ways to cut costs in your business, try one of these seven tips on for size.

1. Focus on Your Design

Have you given much thought to what your interface looks like lately? If your customers are always calling in for help, you may have a poor design.

You can save yourself some time, money, and frustration by putting a little bit more into your UX/UI efforts. A good design is intuitive for your clients. In turn, they need less training and support to use your product or service efficiently.

Just how much is better design worth? Experts estimate each extra dollar you put into your design now will yield $10 to $100 in savings later on.

The reason for this? Fixing a problematic design is going to cost more than creating a great design at the start.

2. Think about Energy When Asking How to Cut Expenses

When Bitcoin took off, one of the most interesting stories was how much energy the company was using. Some reported it was using as much power as Denmark.

You might wonder how a company could use up so much energy. The answer lies in the inefficiency of the network and equipment.

You might not be using as much power as a small European country, but you should take a good look at any equipment you buy. Also, think about how you configure your network.

If you rent from someone else, ask about how efficient their network is. The price you pay reflects their costs.

3. Question the Budget Breakdown

How much do you spend on any one budget item line? Some think they must invest a particular percentage into sales and marketing.

In all truth, the right amount varies for every company. Most experts say SaaS companies need to invest more in their sales and marketing. They look to SalesForce and others as examples, since they invest heavily in this area.

How does spending more on sales and marketing help you when it comes to cutting expenses? It helps you strategize.

If you want to invest 10 percent of revenue in an activity, you’ll need to adjust the budget accordingly. This encourages you to look for efficiencies and cost-cutting measures.

With a goal in mind, you’ll be able to find more ways to cut spending.

4. Embrace the IoT

As a SaaS company, you likely know about a bit about the Internet of Things (IoT). You may not have thought of IoT enabling smart devices to help cut costs and save money.

Smart devices can do things like sense low network traffic and engage in energy saving. This helps with utilities and associated overhead costs.

The IoT can help in other ways as well. You could use it to monitor your security or assist with network maintenance. It could assist with compliance tasks, which can be time-intensive and costly.

5. Think about Outsourcing

Outsourcing is considered one of the great ways to cut spending by most business leaders. It works for SaaS companies too.

Ask yourself if you have all the in-house experts you need. If not, consider sending part of a project out to another team who does have the expertise and skills. You might also consider getting access to technology you don’t have in-house.

Think about customer service as well. Could you deliver better service to your customers if you had around-the-clock care? Outsourcing can help you achieve this goal.

Other aspects of your business can also be outsourced, such as HR, payroll, IT, and so on. Outsourcing frees up your time to focus on your areas of expertise.

6. Look at Your Insurance Bill

Another of the tried and true ways to cut expenses is to revisit your insurance. Insurance can be a large cost for businesses. Some businesses will have to carry several types of insurance.

Depending on the state, you may need business property insurance or commercial auto insurance, for example.

As a provider of technological solutions, you also want liability insurance. If something goes wrong with the product, you’re protected from customers who were harmed and seek to sue you. This is important in a world where data breaches happen all the time.

Look at your insurance policy. Are you paying too much for what you have? Look to bundle different types of insurance to get the best deal. Don’t be afraid to shop around, especially if you’ve been with the same company for some time.

7. Move to Remote Work as Much as Possible

Take a page from your own book and work remotely as much as possible when cutting expenses. This reduces your investment in property or rent.

It’s cost-effective to rent a conference room as you need it than to own your own building or pay rent on a regular basis.

See also if you can save on space for your servers if you own your own. It may not always be possible, but cutting property costs can be a great way to keep overhead down.

There Are Many Ways to Cut Costs

Now you’ve seen how to cut expenses in a variety of ways for your business. These aren’t the only cost-saving measures you can take.

By taking cost-saving measures, you can free up capital and use it to reinvest in your business. This, in turn, can power your growth in a competitive market.

If you’re looking for additional ways to both grow and cut your costs, ask the experts. They can help you discover new ways to continue growing your business.

Business by the Numbers: StackPath CEO Lance Crosby on Data-Driven Business

By Business by the Numbers

Welcome to Business by the Numbers, our new blog series where we talk to some of the most influential people in the cloud, internet infrastructure and web hosting industries about the role data analysis plays in their organization.

We wanted to lead off this series with an interview with Lance Crosby, former CEO of SoftLayer and now head of StackPath, a next-generation intelligent and secure web services platform. Crosby has been a huge proponent of using a data-centric approach to validate gut business decisions, and that there are always data points to track if you know where to look.

Here’s our Q&A with StackPath CEO and Chairman Lance Crosby:

Open-i Advisors: Lance, you’ve got an amazing track record of industry successes including founding SoftLayer (which IBM later made the core of its cloud business) and your more recent creation of StackPath. Can you give us an example of how data helped challenge an assumption or gut reaction when it came to a business decision?

Lance Crosby: It’s all about the data and you can’t manage what you don’t measure. Listening to one’s gut is important when starting a new business, but I am a strong believer in using data to validate what the gut is saying.

There are numerous examples of when we used data to validate assumptions.  One that comes to mind is while at SoftLayer, we gave HostGator rates that generated a lower margin than other customers. This may seem counterintuitive to making money but my gut told me that HostGator’s’ size would drive economies of scale and drive higher overall EBITDA. I had a feeling that would be the case, and the data verified that.

Another example, also at SoftLayer, is customer churn. We all know that unhappy customers are more likely to leave, but thanks to data we learned that customers with a support ticket that wasn’t resolved within 7 interactions were 72% more likely to cancel their services. It became a company initiative to satisfactorily fix all customer issues in 6 interactions or less which allowed us to retain customers and garner the stellar customer service reputation that SoftLayer, and now StackPath, is known for.

OiA: Some aspects of a business are easy to measure while others seem difficult or impossible to track. How do you track business operations that don’t seem to have obvious trackable data points?

LC: It’s true that some things are easier to measure than others, but everything has data points you can track. Every single activity, process product, or service can be measured. Financial measurements are often the easiest to measure, operational measurements are more complex, and performance measurements are even more complex and partially subjective, but if you can define it, you can measure it. You may have to change your language and get super-specific about the KPIs (key performance indicators) that are most important, but once you do that you can measure it.

As an example, at StackPath part of the way we measure sales performance is using lead and lag indicators. Lead indicators are activities and lag equals results. So using sales as an example, say a sales rep makes 100 calls (lead indicator) and ends up with 10 sales (lag indicator) as an average, we now can reasonably predict results and adjust lead indicators accordingly.

OiA: Are high-level company-wide metrics enough or is it important to get more granular data? How do you decide when and where to drill down?

LC: Company-wide metrics are nice as they provide an overview of how the company is doing in general. For example, if we have 100 employees, and we do $1M in revenue, the metric is $10k per employee. But it is important to drill down by department, product, etc. to know WHY the company is doing as it is doing and to be able to make adjustments as necessary.

StackPath has dozens of teams and hundreds of people across the US and internationally. I want to be able to know what is going on with any team at any location at any time so drill down on everything because you can’t manage what you don’t measure.

OiA: What KPIs in general do you find most valuable and why?

LC: General metrics are generally useless. The more specific you can make them, the better. At StackPath, in general, the KPIs I find most valuable are:

  1. Profit: This might go without saying, but profit is one of the most important performance indicators to help me determine how we’re doing as a company.
  2. Customer projections: especially with our content delivery network (CDN) business, it’s important for us to know when our customers are going to need more bandwidth so we can serve up content to end-users with high performance and low latency. Analyzing their resource demands and usage patterns helps us do this.
  3. Real-time average weighted costs of megabits per second (Mbps): Speaking of PoPs, we track daily, weekly and monthly averages in real time for network ops and price planning.
  4. Sales by region: we are building a highly scalable platform of core services at the cloud’s edge. Knowing how sales are going by region helps us determine locations of and enhancements to our next point-of-presence (PoP).
  5. Employee satisfaction: A lot of times, companies focus on all the things I just listed, but forget about one of the most important KPIs of all – employee satisfaction. Happy, loyal staff work better. They help boost both productivity and morale. While one of the harder KPIs to measure, it is worth the effort to provide ways for employees to ask questions, share their concerns and ideas, and to provide feedback.

OiA: Is more data always better? How much data should a company collect and keep? And since obviously security is a concern of yours – what are the security implications of holding this data?

LC: I always like to tell people to “be a data hoarder” and to store all the data you can afford. You may not use it today, but it could prove invaluable in the future.

Security is a major concern of mine – that’s why I founded StackPath. Unfortunately, every day there seems to be another breach and more data is compromised. The StackPath platform is an integrated response to a fragmented problem created by too many individual, appliance-based, bolt-on security solutions. It’s time to give businesses internet services that have security built in, not bolted on, so they can be reliable guardians of their data.


Please post a comment to this blog, and also let us know who we should interview next in our Business by the Numbers series.

What is Business Intelligence?

By Business by the Numbers

It’s becoming common to hear grandiose statements like “data is the new oil”, and Business Intelligence is one of the practical ways data is being put to work right now. But what exactly do we mean by Business Intelligence?

Defining “BI”

Business intelligence (or BI) essentially means using data so that an organization can make factually based business decisions. To make sense of data, we use complex data analysis to examine what impacts your Key Performance Indicators (or “KPIs”), discover new patterns and create predictive models.

This lets us make better decisions and make them faster so opportunities can be realized before competitors.

Another key part of current BI practices is using data collection and analysis tools that exceed that of traditional business analysis. While a traditional analyst can try to draw conclusions from a spreadsheet with a few dozen data points, modern BI can sort through tens of thousands to discover patterns and relationships.

Example Uses of Business Intelligence

There are countless examples of BI being used to solve business problems.  Here are just a couple:

Employee productivity: You can use data through time tracking and interviews to find out what’s taking up your employees time, and if there’s anything you can do to provide information or resources that would support them in their tasks.

Customer experience: You can understand how customers interact with your business from their first impressions of your marketing, to the sales funnel, to their experience using your product or service. By understanding your customers better, you can tailor your messaging and your sales process to your customer, and also create a better product or service.

Generally speaking, BI takes data from your business and turns it into useful information you can use to run your business more effectively. As new technology like machine learning, smart IoT sensors and AI allows BI to collect and analyse data more effectively than before, the impact of BI will become even greater.


This post is a quick and general overview of BI. Over the next few weeks, we’ll be posting advice from our consultants on how to start getting your data working for you. We think getting started with BI should be easy and cost-effective. Reach out to Open-i Advisors to learn more.


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