Your Company Could Be Getting 60% Off Cloud Tools – and Probably Isn't

01 /The Concept

CostCuts helps companies buy subscriptions to corporate cloud services at below-standard prices.

The mechanics are simple: group purchasing. CostCuts pools orders from small companies into a single large order, negotiates volume discounts from cloud providers, and passes those discounts on to customers.

Naturally, it keeps a cut for itself. Customers pay slightly more than the wholesale rate CostCuts negotiates – that spread is the startup's margin. But customers still end up meaningfully below standard list prices. From the customer's perspective, the service is essentially free, since the startup earns on the commission rather than charging a direct fee.

Discount levels vary by service, ranging from 10% to 40%. The catalog already includes well-known names: ChatGPT, Cursor, Slack, Zoom, Figma, Asana, Jira, Notion, and others.

Importantly, the cloud service providers are aware of and aligned with CostCuts' model – the startup only adds services it has pre-negotiated agreements with.

The one constraint for customers: subscriptions must be annual. But even this is manageable, since customers can cancel at any time and CostCuts will transfer the subscription to another customer who needs it. What happens if no such customer exists at the moment of cancellation isn't entirely clear – whether the original customer is on the hook until a replacement appears, or whether that's simply a built-in cost the business absorbs.

CostCuts launched last year, initially offering discounts on just a handful of services – Rippling, Vanta, and Gusto. Four months ago it opened enrollment to any cloud service that wanted to participate. Since then the catalog has expanded significantly, and the startup just posted its Product Hunt launch.

02 /Why It Matters

CostCuts targets small and medium businesses, but the broader market for cloud procurement savings covers different segments with somewhat different models.

Back in 2023, Pump ([related review](/review/chtoby-zarabatyvat-ne-nuzhno-razrabatyvat)) was covered here – a startup using the same group purchasing model. Its audience is startups with AWS, Google Cloud, and Azure bills between $1K and $100K per month. Pump promises savings of up to 60%. It ran through Y Combinator in 2022 (back then with AWS only), has since expanded its coverage, and raised $4M in new funding last year.

Vendr ([related review](/review/sjekonomte-na-zakupkah)) targets larger enterprises with significant cloud spend. For those companies, Vendr will individually negotiate with vendors on contract terms and renewals, and surface alternative providers when a better deal is available.

Vendr's baseline product is a market intelligence database showing real price levels for large cloud contracts – which companies can use to negotiate themselves. The managed negotiation service, where Vendr does the heavy lifting, is a premium add-on priced at $40K to $140K per year depending on company size and cloud budget. Vendr has raised $216M in total – most of it after the original review.

Sastrify ([related review](/review/malenkim-vyruchku-bolshim-jekonomiju)), a German startup with over $55M raised, offers a similar price intelligence database and negotiation service. Its platform is more comprehensive, though – it includes a full system for tracking and governing cloud service usage across the company.

03 /Opportunities

Not long ago, nearly everything – including software – moved through long intermediary chains: distributors, dealers, retail stores. Then the internet arrived, and many vendors chose to sell directly to end users through their own websites. Software shifted from discs to cloud services, and cloud services, by definition, sold direct.

For a while it seemed like the internet had killed the intermediary in software. But then competitive pressure intensified. As the number of similar cloud services multiplied, developers started looking for new ways to break through – and began looking back toward resellers.

You can call it "group purchasing" or the old-fashioned "distributor and dealer" channel – the underlying trend toward selling cloud services through intermediaries is the same.

In fact, classic multi-tier distribution chains are now operating in software.

Case in point: European startup Jotelulu ([related review](/review/revoljucija-v-prodazhah-it-servisov)) raised €11.8M for a platform that lets small IT companies resell third-party cloud services to their own clients. Jotelulu acts as distributor, negotiating with cloud providers; IT firms act as dealers, reselling to end customers.

The fundamental job of a channel intermediary is to work the last mile – getting as close as possible to the end buyer and creating a reason to engage. Having a built-in margin gives them room to price competitively and close deals.

As competition in the cloud services market keeps intensifying, the trend toward indirect sales channels will keep strengthening. There's a real opportunity to earn on a growing market without building the underlying software.

The question is: how do you get closest to the end buyer, and what's your hook? CostCuts is the most direct model – "come to us for discounts." Pump is more developed – it adds cloud cost monitoring on top. Sastrify is the most sophisticated – a full governance and compliance layer with negotiation as an optional add-on.

One more important note: the AI agent market is growing rapidly, and AI agents are essentially just another form of cloud service. The same competitive dynamics will inevitably emerge there, and the same intermediary layer will form. Getting there early – before the category is crowded – is the real play.