Raghav Parthasarathy is a seasoned finance and cloud economics leader with deep expertise in aligning technical decisions with long-term business goals. His work has helped engineering and product teams integrate cost efficiency into the earliest stages of development, turning cloud strategy into a driver of both resilience and scalability.
He shares how teams can build with cost in mind from day one, what goes wrong when they don’t, and why cross-functional collaboration is essential for sustainable product growth. Drawing from firsthand experience in large-scale transformations, Raghav offers a practical lens on cloud spending that’s rooted in accountability, transparency, and smart design.
1. Why do you believe cloud cost should be viewed as a product strategy issue rather than solely a finance concern?
“I strongly believe that cloud cost management is a strategic lever for engineering and not just for finance teams. Incorporating cost efficiency into product architecture from day one leads to a more sustainable and scalable product.”
This also results in teams making different design choices and communicating early with other teams about the dependent features needed for their plan. This, therefore, results in the right prioritization of engineering work across all the teams and helps avoid rework.
There are also several examples where a product that was designed with cost consciousness in mind ends up being a feature or an offering that customers also want to adopt – Spot VMs by cloud providers is a great example. For instance, Microsoft’s own engineering framework treats cost optimization as one of the five core pillars of a well-architected application, on par with reliability and security.
2. How can product and engineering teams integrate cost-awareness into their design and development processes from day one?
From the start, product and engineering teams must include product efficiency as one of the key measures of success. This will also provide top-down clarity to everyone on the team that cost efficiency cannot be traded off for other choices.
Key to this is the deep engagement of business teams, especially finance, right from the start of the development process. Finance teams, especially, have a key role to play in driving clarity on a few different areas:
- First, they must help establish cost-related KPIs for the product. These could be in the form of “cost per” metrics and “profitability metrics.”
- Second, they need to guide engineering teams on the impact of various engineering choices in the design process. Each of those choices will potentially drive a different cost.
Finance teams need to evaluate the ROI of a choice that lowers cost. In doing so, they must also holistically evaluate other implications of design choices that lower cost. For example, if a design choice lowers costs but delays launch by a few months, there are potential revenue loss implications. Finance teams need to be able to evaluate these holistically and provide well-thought-out and balanced recommendations to engineering teams.
Another key consideration is whether cost efficiencies can be incorporated into the next versions of the product, and what the near-term implications of making this conscious choice are.
3. What are some of the most common pitfalls companies face when cloud cost is treated as an afterthought?
There are several implications. The most visible financial outcome shows in profitability metrics with P&Ls showing low and or negative margins. Second, it shows up as server resources being overprovisioned and underutilized, driving up both server and data center consumption. Culturally and in terms of how teams operate.
It shows up as teams not being aware of the implications of their design choices. It shows up in meetings where teams from different functional areas are often discussing hard tradeoffs between cost efficiency choices versus other feature development choices, instead of just incorporating cost efficiency decisions as part of the development choice.
4. Can you share an example where aligning cloud cost with product goals led to better business outcomes?
There are several examples that come to mind from Microsoft. The most recent example is from Cognition’s adoption of Microsoft Cloud that not only led to 50% reduction in engineering costs but also led to a 2x improvement in developer productivity and faster time to market, to name a couple. The full blog post is here.
Another example of this comes from a customer who used cost-saving measures during one of the most difficult times during the pandemic. It’s the story of British retailer ASOS, which was impacted by the COVID-19-related downturn and needed to incorporate cost efficiency into the core of its operations.
They collaborated with Microsoft to apply cost reduction initiatives and were quickly able to eliminate waste, resulting in an immediate cost reduction of 15-20% and further optimization resulting in up to 40% savings. They discuss how Teams that were initially worried that cost controls might impact their creativity, but the opposite happened. They maintained their time-to-market while also improving engineering efficiency. The pandemic was a very tough time for business, and so this story has always resonated with me, given my field of specialization of Cloud economics.
5. What tools or practices help teams gain real-time visibility into cloud spending without slowing down innovation?
Providing teams with real-time visibility and insights into costs is crucial. I am going to speak of course, from an Azure standpoint and talk about the tools available. But the same is true for most cloud providers who continue to provide a suite of tools to customers to manage their costs smartly.
First and foremost, I’ll say that Azure offers multiple services that each provide recommendations, such as Azure App Services and SQL DB Advisor. Now, if you’re looking for consolidated insights, then Azure Advisor gets them all into one place for easy viewing and actioning. The recommendations from Azure Advisor can be applied to specific subscriptions and resource groups. The Quick Fix feature was recently launched in Jan 2025 and provides a faster and easier way to apply recommendations on multiple resources at once (bulk updates). I love the fact that Microsoft constantly provides suggestions to customers on ways to optimize costs.
Now, let’s consider the processes that can be applied. I was a finance lead for the Microsoft Digital team during their migration to Azure, which involved transitioning their entire footprint. At that time, I followed a process that involved providing timely reporting and updates on their spend trends, as well as offering insights into which subscriptions and resources were the biggest drivers of spend. For an organization’s leader, it is often beneficial to know about trends in spending of their teams, and have a forecast of spending to measure if actuals are coming in line with expectations.
It is also important to drive the top-down message so that engineers who are spinning up resources are cost-conscious. It is essential to know the drivers of spend. Are you spinning up more resources because you’re seeing a spike in usage, or because your own customer traffic has increased? That’s not a bad outcome if you’re generating more revenue. So it is always also good to know which of your cloud spend is tied to your business growth and which is for overhead.
6. How should finance, engineering, and product teams collaborate more effectively to manage cloud costs proactively?
The collaboration between finance, engineering, and product is crucial at every stage of the product lifecycle. When products are first developed, these teams must agree on cost and/or profitability KPIs.
Second, during development, they must be closely aligned on the various design choices and the cost implications of each. The goal at this stage should be to ensure that there is no compromise on the end user requirements to cut costs; rather, the engineering design must be efficient enough to provide the customer their desired product while managing costs.
Third, after the product is launched, the teams must be engaged to measure progress against the set KPIs and address any overruns. This is also a great time to redefine or update KPIs using new learnings from customer usage of the product. And finally, when retiring the product, the teams must be engaged to ensure a seamless transition of customers to the next generation product.
7. What role does cost transparency play in shaping product decisions and long-term scalability?
Cost transparency is crucial for engineering teams to have a deep understanding of the drivers of spend. Merely showing teams a single metric of “cost per” or “gross profit” does not suffice. Instead, these must be broken down into multiple metrics, such as cost for the virtual machines, cost for storage, etc., to identify the most significant areas of spend. This will allow engineering teams to trace spend directly to the architectural choices they made.
This kind of visibility results in them asking questions such as: Am I using the right-sized VM for this workload? Can this workload run more efficiently on a different type of compute? Transparency results in teams making deliberate choices based on all the information available to them, and the end result is often a platform that is scalable and efficient.
8. What advice would you give to product leaders looking to build a culture of cost-conscious development without compromising agility?
A culture of cost-conscious development can only be set at the top. Often times you have engineering leaders who set this tone, and when they do so, they need to ensure teams understand that cost consciousness goes hand in hand with innovation. Not only that, but cost consciousness sometimes helps improve design choices. In situations where leadership does not set the tone at the top, other business teams and often finance will need to take a leadership role in driving the culture through clear accountability of individual product margins and P&Ls.
Another thing to note is that this is not a one-time effort; leaders must continually set the narrative at the top to maintain momentum. Finance teams can be great partners in this. Additionally, finance teams must be prepared to support a culture of cost-conscious development while closely partnering with and enabling the engineering organization.
