Interesting startup idea: benchmarking cloud platform pricingA team of 3 developers built a neat platform called Spare Cores that makes cloud instance pricing more transparent. A deepdive on how exactly they did it.Hi, this is Gergely with a bonus, free issue of the Pragmatic Engineer Newsletter. In every issue, I cover topics related to Big Tech and startups through the lens of engineering managers and senior engineers. In this article, we cover one section from this week’s from last week’s The Pulse issue. To get full issues twice a week, subscribe here. I came across an interesting, useful product for backend-heavy applications. There is an increasing number of cloud providers offering the ability to rent virtual machines, the largest being AWS, GCP, and Azure. Other popular services include Oracle Cloud Infrastructure (OCI), Germany-based Hetzner, France-headquartered OVH, and Scaleway. Virtual machine pricing across these providers can get confusing – and wildly different! A startup called Spare Cores attempts to help compare prices between AWS, GCP, Azure and Hetzner by monitoring offerings in close to realtime. The name comes from the concept of “spare cores:” machines currently unused, which can be reclaimed at any time, that cloud providers tend to offer at a steep discount to keep server utilization high. Interested in how the site works, and what the business model is for a service like this, I reached out to Spare Cores founder Gergely Daróczi, who shared in-depth details about the company, including lots of specifics about the tech stack. In this article, we cover:
As always, I have not been paid to write about this company and have no affiliation with it – see more in my ethics statement. 1. Funding and team sizeThe company got started thanks to a €150K ($165K) EU grant. The startup was able to start operations thanks to getting access to an EU grant called NGI Search grant. The company receives €150K in 2024, which is the maximum amount that a company can get within this category. This grant is designed to “support entrepreneurs, tech-geeks, developers, and socially engaged people, who are capable of challenging the way we search and discover information and resources on the internet”. The team is tiny; only three people. It’s one front-end dev and two part-time backend devs. How the product works: they currently monitor four cloud providers (AWS, GCP, Hetzner Cloud, Azure.) The solution has three parts:
2. Tech stack
3. Benchmarking toolsSpare Cores is in the business of benchmarking virtual machines. They use GitHub Actions and Pulumi templates to kick off benchmark tasks: that plumbing code to start benchmarking can be found in the sc-runner repo. Benchmarking results for each instance type are stored in sc-inspector-data repo, together with the benchmarking task hash and other metadata. There are several useful open source tools benchmarking which the team uses:
4. The cost of benchmarkingGiven the team has relatively little funding: how much does infrastructure cost? The team shared:
Like most startups, Spare Cores also made their own “expensive mistake” while building the product:
5. Creating a viable business from cloud benchmarkingI really liked the idea of Spare Cores because pricing comparison across cloud providers is increasingly useful. However, it also sounds like a business that’s hard to do properly for long because it could be hard to monetize, and turn into a profitable small business. I asked Gergely at Spare Cores about this and he shared their plans:
These are sensible mid-term plans: but they do not answer for what happens to the startup starting 1 January 2025, when their grant funding runs out. The plan, as the team told me:
I’m impressed by what a useful tool this tiny team built purely from a modest EU grant – and the optimistic outlook the team has, even as the grant runs out. It’s also interesting to see just how many different SaaS platforms even a small startup like this one is using to operate some backend services, store data, and run a website. Clearly, the team is doing things in a slightly more complex way because they are prepared to process large amounts of data, and build additional features they might be able to charge for later. I hope you enjoyed a peek inside the tech stack of a young, ambitious startup. Good luck to the Spare Cores team turning this neat idea into a viable business! If you’d like to contact the Spare Cores team, you can do so at daroczig@sparecores.com. This was one section from last week’s The Pulse. Read the full issue here, and read this week’s The Pulse — all of them analyzing relevant events happening in the tech industry. You’re on the free list for The Pragmatic Engineer. For the full experience, become a paying subscriber. Many readers expense this newsletter within their company’s training/learning/development budget. This post is public, so feel free to share and forward it. If you enjoyed this post, you might enjoy my book, The Software Engineer's Guidebook. Here is what Tanya Reilly, senior principal engineer and author of The Staff Engineer's Path said about it:
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Interesting startup idea: benchmarking cloud platform pricing
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Interesting startup idea: benchmarking cloud platform pricing
A team of 3 developers built a neat platform called Spare Cores that makes cloud instance pricing more transparent. A deepdive on how exactl...
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