Cost Reduction: How I saved 99.76%

October 07, 2022

In this issue, you'll learn:

1. How do you create value for your customers through cost reduction?

2. How I lowered the 250$ per operation cost of my backup and archiving to just $0.6 USD.

Time to read: two minutes.

Types of value propositions

Back in our business model series, we stopped at value proposition types, and we dedicated an issue to speaking about price.

Today, we will speak about cost reduction.

Price
Cost reduction
“Getting the job done”
Risk reduction
Customization
Accessibility
Convenience/usability
Performance
Design
Newness
Brand/status

Cost Reduction

It's about saving money for your customers.

Before: The pains

My managed services provider used to have a complete backup of my 150 GB website through:

Creating a compressed file from an FTP backup.
Downloading that big file.
Spending money on a hard drive and copying the data to it.
Sending me that hard drive via DHL.

The process took a lot of time. The download took a long time, and it might have failed in the middle and had to be done again.

Especially as time goes on, the hard disk could crash and the platters could get broken.

Every year, I had to pay the price of at least one hard disk.

I have to pay DHL to send me the hard disk.

Tape drives were the most cost-effective and reliable way for me to archive over the years, but they are prone to disasters and the tapes might not work when you want to restore after a disaster.

Amazon S3 Glacier Storage Classes | AWS — aws.amazon.com

Long-term, secure, durable Amazon S3 object storage classes for data archiving, starting at $1 per terabyte per month.

After: The gains

When I first started using AWS S3, I was able to do everything online in record time. It took an hour, and it cost me ten dollars for my 150 GB database.

Then I realized that what I needed was more of an archive than a backup, since I had never needed to restore my backup in the last 10 years. The last time I restored was in 2007.

The Amazon Glacier service came into play.

It's a tape drive that uses virtual tape to store the data. That means it would take longer, but it would cost less.

Since I didn't need speed, I changed into it.

Boom! My expenses went from $10 to 60 cents.

So, here's something to consider.

Your value proposition would be undeniable if it was founded on the provision of an invention that lowers customers' expenses, or on the provision of training, consulting, coaching, or implementation services centered on that.