The average SaaS company wastes 30-40% of its infrastructure budget on over-provisioned resources, unused capacity, and suboptimal architecture. This playbook provides the specific techniques that reduce SaaS infrastructure costs 40-60% without sacrificing performance or reliability.
Right-Sizing
The single largest cost saving in any infrastructure optimisation: right-sizing. Analyse CPU, memory, and network utilisation across every instance for 30 days. In over 80% of cases, average utilisation is below 20% — indicating instances are 4-5x over-provisioned. Right-size every instance that has been running below 30% average utilisation for 30+ days. This typically reduces compute costs 30-50% with no performance impact.
Reserved Capacity
On-demand pricing is the most expensive way to run steady-state workloads. Convert stable, long-running services to reserved instances or savings plans: 1-year no-upfront commitments deliver 30-40% discounts; 3-year commitments deliver 50-60% discounts. Apply reserved capacity to: databases (RDS Aurora), compute (EC2/ECS), and cache (ElastiRedis). Keep burst capacity and experimental workloads on on-demand pricing.
Note
Reserved capacity is the lowest-risk cost optimisation. If you are confident you will run a service for 12+ months, a reserved instance saves 30-40% with zero operational change.
Architecture Optimisation
Architectural changes deliver the biggest long-term savings: (1) Serverless for variable workloads: Lambda for background processing, API Gateway for sporadic APIs. Pay per request, scale to zero. (2) CDN for static content: serve all static assets from a CDN, not your origin server. Reduces origin server load 60-80%. (3) Connection pooling: PgBouncer for PostgreSQL, Redis for caching. Reduces database connection overhead. (4) Async processing: move non-real-time work to queues (SQS, BullMQ). Process during off-peak hours on cheaper compute.
Conclusion
SaaS infrastructure costs are optimisable through right-sizing (30-50% savings), reserved capacity (30-60% savings), and architecture optimisation (long-term structural savings). Start with right-sizing — it has the highest impact and lowest risk.
Key Takeaways
- Right-sizing: analyse utilisation, downsize over-provisioned instances — 30-50% savings
- Reserved capacity: 1-year saves 30-40%, 3-year saves 50-60% — lowest risk optimisation
- Architecture: serverless for variable workloads, CDN for static, connection pooling, async processing
- Start with right-sizing — highest impact, lowest risk, no architectural change required
- Total savings of 40-60% are typical without sacrificing performance or reliability