Unlocking the ROI of Third-Party Cloud Dependency Monitoring
Tags: devops, cloud, monitoring, sre
Published: 2023-04-11 19:41:55

In today's business environment, where cloud services are critical to operations, it's essential to understand the value of third-party cloud dependency monitoring and its potential ROI. In this article, we'll examine the significance of monitoring third-party cloud dependencies and why investing in this technology is a smart decision.

## Introduction
As organizations increasingly rely on cloud services and third-party providers to manage their infrastructure, maintaining visibility and control over these dependencies is crucial. To achieve this, companies are turning to third-party cloud dependency monitoring solutions. In this post, we will explore the factors that contribute to the ROI of these solutions and why they are worth the investment.

**Enhanced System Efficiency:**
One of the main advantages of third-party cloud dependency monitoring is the ability to improve system efficiency. By identifying bottlenecks and other performance-related issues, organizations can address them promptly. This leads to better performance, optimized resource utilization, and ultimately, cost savings.

**Minimized Downtime and Faster Incident Resolution:**
Downtime can be a significant cost for businesses, both in terms of lost revenue and damage to their reputation. With third-party cloud dependency monitoring, organizations can quickly detect and resolve potential problems before they result in system failure. This helps minimize downtime, ensuring consistent service levels and customer satisfaction. Furthermore, by reducing the average incident resolution time, companies can save $48,000 per incident (according to Gartner) and significantly impact the bottom line.

**Informed Decision-Making:**
Third-party cloud dependency monitoring provides organizations with crucial data and insights that can guide better decision-making. By understanding the performance of their cloud dependencies, businesses can make well-informed choices about which services to use and how to optimize their infrastructure. This leads to improved operations and cost-efficiency.

**Greater Agility:**
In the fast-paced world of technology, businesses need to be agile to keep up with changing demands. Third-party cloud dependency monitoring equips organizations with the tools required to make swift adjustments to their systems and adapt to new requirements. This flexibility enables businesses to stay competitive and maintain an edge over their rivals.

## Have Doubts? The Math of Cloud Dependency Monitoring ROI
Let’s consider a hypothetical scenario to discuss the ROI of cloud dependency monitoring. A SaaS product experiences 20 major incidents per year. It takes the 8-person response team for these incidents and an average of 1 hour to diagnose and resolve each incident. 

**Without Cloud Dependency Monitoring**

With the average engineering cost being $100/hour, and estimated revenue loss per hour of downtime at $10,000, the total cost per 1-hour incident is about $10,800. If this product had 20 incidents per year, the total cost of incidents per year, including engineering staff and revenue loss, would amount to $216,000.

Cost of Outages 
Engineer time (8 ppl): $800/incident; $16,000/year
Revenue Loss: $10,000/incident; $200,000/year
Total:	$10,800/incident; $216,000/year
 
**With Cloud Dependency Monitoring**

However, when the organization implements proactive monitoring and alerting of third-party cloud dependency outages, they don’t have to wait 25 minutes for a status page update before they take action. That means in this scenario, the average time spent diagnosing and resolving each incident decreases by 42%.

These savings result in a reduction of $6,720 in engineering staff costs, and a $84,000 reduction in lost revenue. As a result, the total ROI from adding cloud dependency monitoring to the engineering team’s observability stack is $54,000, without including the ROI of customer satisfaction and improved brand reputation.

Savings Per Year (42%)
Engineer Time: $6,720
Revenue Savings	$84,000
Total	$54,000/Savings per Year

A lot of labor and lost revenue can result from downtime due to third-party outages. And so monitoring those outages can have a significant ROI. 

**Conclusion**
Investing in third-party cloud dependency monitoring offers numerous benefits that contribute to a significant return on investment. Enhanced system efficiency, minimized downtime, faster incident resolution, informed decision-making, and greater agility all play a key role in helping businesses optimize their cloud-dependent systems.

To learn how you can create direct visibility into the the third-party cloud services your app relies on, [try out Metrist for free](https://metrist.io/)!