Evaluating Economic Factors When Selecting a Cloud Database Service

Learn about the business impact of cloud database services on ISV economics and the key considerations required to lower total cost of ownership.

cloud-computing-data

Let’s face it, most business decisions that you will make as an Independent Software Vendor (ISV) will be largely driven by one key question: “What’s in it for me?” When it comes to choosing a cloud database service provider, this is no exception.

We understand that as an ISV, you are faced with the critical task of assessing the economic value of each business transaction you engage in and evaluating its potential impact on profit margins. This process naturally demands that various factors are carefully considered to ensure that the chosen transaction not only aligns with your financial goals but also maximizes your economic success.

In this article, we’ll dive into the business impact of cloud database services on ISV economics and the key considerations required to lower Total Cost of Ownership (TCO).

Total Cost of Ownership: Balancing Costs, Features, and Performance for ISV Success

Acknowledging the priorities that shape your daily operations, we recognize the criticality of evaluating the Total Cost of Ownership (TCO) as a key factor in driving optimal ISV success. Unsurprisingly, prioritizing TCO evaluations brings numerous benefits, including:

      • Gaining valuable insights into cost structures
      • Optimizing pricing strategies
      • Assessing the financial viability of your business model
      • Managing costs effectively
      • Making informed decisions for sustainable growth and profitability

Analyzing TCO, therefore, requires engaging in a business conversation that delves into the costs associated with goods sold and the profit margins that you will retain.

So, what does this mean in relation to cloud database services?

As an ISV, selecting the right cloud database service provider is crucial for effectively managing your Total Cost of Ownership (TCO) and minimizing expenses. This requires striking a balance between costs, features, and performance to maximize the value obtained from software solutions.

To make an informed decision, you should start by asking the following:

  1. How much of the underlying cloud service provider’s services am I going to consume?  Determine the extent to which you will utilize the services offered by the cloud service provider. Assess the specific features and functionalities that align with your software solutions and consider how they will contribute to your overall TCO.
  2. What is this going to cost me?  Understand the pricing structure of the cloud database service provider. Evaluate the pricing models, such as pay-as-you-go or subscription-based, and identify the cost implications based on your expected usage.

By considering these two questions, you can make an informed decision about the cloud database service provider that best aligns with your organization’s long-term strategic goals, vision, and mission.

So, the question remains: how do you, as an Independent Software Vendor, compare various cloud database providers and determine which offers the highest economic value for you? Let’s take a look at the key factors to consider when selecting a cloud database provider.

Key Factors to Consider in Cloud Database Selection

Fostering economic success entails finding the right balance between robust features that meet application requirements and managing the expenses incurred when customers use your application at scale and for high-throughput scenarios.

Cost Savings

As an ISV, it is essential that you are aware of the potential cost implications when moving data to the cloud. There are fixed costs associated with integrating the cloud provider’s infrastructure and core software services into your application, and implementing a cloud database and cache can result in transaction-based economic costs that may not always be anticipated.

Lowering TCO, therefore, necessitates that you conduct a thorough analysis of the cost-effectiveness of the cloud database solution in terms of upfront costs, ongoing expenses, and potential savings compared to alternative options. This evaluation encompasses all expenses associated with database services, including:

        • Development
        • Deployment
        • Maintenance
        • Support

Considering whether to utilize an all-inclusive data platform that incorporates features such as a document database, built-in caching, full-text search, real-time data analytics and mobile – all covered by a single license – versus utilizing multiple database platforms could form part of your decision-making process. A key benefit of using an all-inclusive, single license cloud database provider is that this eliminates the need for ISVs to license, learn, integrate, and maintain multiple technology database platforms.

Additionally, it is important to consider whether multiple built-in services are included and the convenience this may provide in terms of reducing the learning curve, coding efforts, integration challenges, and maintenance requirements for developers. Moreover, for DevOps teams, this translates to fewer tools to license, deploy, and support, resulting in overall efficiency gains. A win-win for all, right?

Lastly, it is crucial to assess the pricing model of the cloud database provider and their ability to offer business agility by aligning their processing model with the unique needs of their ISV clients. By utilizing a cloud database provider that offers a robust SaaS solution with custom pricing models, you can effectively align your go-to-market strategy, ultimately reducing TCO while delivering exceptional value to your customers.

To ensure a profitable and sustainable business model, you will need to assess the long-term economic viability and cost-effectiveness of your decisions. This is particularly vital in the context of delivering a SaaS-based application, where scalability and cost considerations must be carefully evaluated to achieve success at scale.

Performance and Scalability

Alongside cost considerations, scalability and performance optimization capabilities of a cloud database solution represent key factors that must be duly assessed, especially as you anticipate your business needs to grow over time.

To ensure optimal ISV success, it is important to examine the extent to which the cloud database provider’s data platform excels in data-intensive environments that demand exceptional throughput and low latency at scale. Moreover, as powerful business applications that deliver personalised experiences by nature must be ‘stateful’, it is vital to assess whether the cloud database provider prioritises distributed and “memory-first” architecture. This is required to ensure key-value data retrieval and processing operations happen in memory, resulting in sub-millisecond performance and enabling information to be retrieved quickly.

High Availability and Reliability

Another key factor to evaluate is the cloud database provider’s high availability and reliability. Cloud database service providers that leverage several technologies working together to ensure that ISV data and databases are “always on,” even under extreme conditions, are advantageous in this regard. Many of these capabilities, like continuous replication, auto-failover, speedy rebalancing, cross data center replication (XDCR) across clusters, and auto-sharding, happen by default in the background or are manageable without taking down the system. Subsequently, these factors facilitate lower operational costs for you as your cloud database provider takes care of it all.

Technical Support

In the dynamic realm of software development, we know that something always breaks. As glitches are an inherent part of the journey, finding a reliable cloud database provider that offers robust technical support becomes imperative in navigating these challenges seamlessly.

When incorporating third-party technologies into your stack, it becomes crucial to possess the skills to diagnose and troubleshoot effectively. This ability empowers you to discern whether the issue lies within your application or the cloud database provider, enabling a more streamlined and efficient resolution process. By establishing a structured agreement that includes the capability for level 1 or level 2 support and self-troubleshooting, you not only benefit from a more competitive price point but also enable the provider to reach resolutions faster, minimizing downtime and optimizing overall performance for increased customer satisfaction.

Realizing Long-Term Cost Benefits: Planning for Growth and Future Needs

Maximizing ROI and protecting the longevity of your business requires planning for growth and anticipating future business needs. Evaluating a cloud database provider in terms of its economic value and understanding the extent to which the solution can facilitate reducing TCO to safeguard your bottom line comes down to realizing the long-term cost benefits involved.

So, what are the key long-term cost benefits associated with choosing the right cloud database service provider?

      • Lower Maintenance and Support Costs: Reduce ongoing expenses by selecting a provider with cost-effective maintenance and support services.
      • Efficient Scalability: Scale your application without incurring significant infrastructure costs by choosing a provider with efficient scalability options.
      • Streamlined Development: Optimize development processes and reduce costs with a provider that offers developer-friendly tools and efficient APIs.
      • Cost-Effective Infrastructure: Minimize expenses with a provider that offers cost-effective infrastructure solutions, including optimized data storage and flexible pricing models.
      • Future-Proof Solutions: Avoid costly migrations and redevelopment efforts by selecting a provider that offers future-proof solutions, ensuring long-term cost savings.

Achieving Fast ROI with the Right Cloud Database Provider

Ensuring that your investment in the cloud database service provider’s capabilities generates maximum returns requires a careful evaluation of the database provider’s potential ROI which can, subsequently, aid you in selecting a provider that best supports your business’ needs.

With the primary goal of lowering TCO, it is advisable to seek a provider that offers an extensive array of features within a unified system, while ensuring simplicity and ease of use.

Ideally, your cloud database provider should empower you to:

      • Consolidate your data technologies into a single database to save money
      • Maximize operations per dollar with superior scaling and performance
      • Accelerate modernization and time to market through the flexibility of JSON
      • Reduce the efforts and costs of your operations
      • Conserve resources with a high-density storage engine = do more with less

Realizing the Value of Reduced TCO

Still not convinced that choosing the right cloud database service provider can help you reduce TCO? Here are two compelling examples of data-intensive hyper-scaler Couchbase customers who have experienced its impact firsthand.

Amadeus powers the travel industry’s most reliable customer experiences, boarding over 1.8 billion passengers annually. As the biggest processor of worldwide travel bookings, Amadeus manages a huge daily workload and has no room for service outages. The company uses Couchbase clusters and cross-datacenter replication (XDCR) in all its data centers to ensure high availability, resiliency, and a single source of truth for bookings. Amadeus achieved over 50% TCO savings and returned value on its investment in under 12 months.

Viber, a cross-platform voice over IP and instant messaging software application, gained the scalable performance to process up to 15 billion daily calling and messaging events with Couchbase in a multi-layered AWS architecture. Couchbase updates user profiles in near-real time, delivering a responsive user experience. By replacing MongoDB™ and Redis with a single Couchbase database, Viber reduced the number of servers from 300 to 120 – a 60% reduction with massive cost savings.

Conclusion

When it comes to identifying the right cloud database service provider, thorough evaluation is the key. By considering factors such as cost-savings, performance optimization and scalability in your selection process, you can establish the most cost-effective way to grow powerful business applications and improve your revenue, margins, and time to market as an ISV.

As demonstrated by the customer examples, effective TCO management can empower businesses like yours to achieve both short- and long-term success by boosting ISV profitability, customer satisfaction, and market competitiveness.

Carlos Barberena

Carlos Barberena leads Couchbase’s ISV business in the Americas.  He is a seasoned executive with a career-long record of success in business development, strategic alliance development, and sales management experience in the tech industry. He is currently the Director of ISVs at Couchbase, where he is responsible for leading the development and execution of strategic business plans and programs with independent software vendors (ISVs).

Before Couchbase, Carlos spent 4+ years at PTC where he led the IoT and AR business segment in Latin America and ISVs in Energy and Telco.  Carlos also spent over 10 years at Oracle, where he led business development for several global businesses, including EPM and Business Intelligence, Industry alignment for partners, and partner business development for Engineered Systems.  He developed industry and partner go-to-market strategies that resulted in hundreds of millions of dollars of confirmed attributed revenue.

Carlos holds a Bachelor’s degree in Computer Science and a minor in Business Administration.


Carlos Barberena leads Couchbase’s ISV business in the Americas.  He is a seasoned executive with a career-long record of success in business development, strategic alliance development, and sales management experience in the tech industry. He is currently the Director of ISVs at Couchbase, where he is responsible for leading the development and execution of strategic business plans and programs with independent software vendors (ISVs).

Before Couchbase, Carlos spent 4+ years at PTC where he led the IoT and AR business segment in Latin America and ISVs in Energy and Telco.  Carlos also spent over 10 years at Oracle, where he led business development for several global businesses, including EPM and Business Intelligence, Industry alignment for partners, and partner business development for Engineered Systems.  He developed industry and partner go-to-market strategies that resulted in hundreds of millions of dollars of confirmed attributed revenue.

Carlos holds a Bachelor’s degree in Computer Science and a minor in Business Administration.