SaaS provider
35% Cost Reduction: 4 Key Vercel Optimizations for SaaS Scalability
About The Client
Our client, a fast-growing SaaS provider, delivers a cloud-based platform that empowers businesses to streamline their operations through automation and data analytics.
With a global user base, the platform is designed to be accessible, scalable, and cost-efficient, catering to both small businesses and enterprise clients. The client relies on Vercel for its front-end deployment, leveraging its serverless architecture and global CDN to ensure low-latency access for users worldwide.
Challenge
Rising Vercel Costs Threatening Scalability
As the client’s platform grew, so did their Vercel usage costs, driven by increased traffic, frequent deployments, and inefficient serverless function execution. The client faced several challenges:
High Serverless Function Costs: Overprovisioned serverless functions and overused API routes led to excessive function costs..
Inefficient Build Processes: Large, unoptimized builds consumed significant build minutes, pushing the client beyond their Vercel plan’s limits.
Lack of Usage Visibility: The client lacked clear insights into cost drivers, making it difficult to prioritize optimization efforts.
Scalability Concerns: Rising costs threatened the platform’s ability to scale cost-effectively as user demand grew.
These issues are common among SaaS providers scaling on Vercel, where rapid growth often outpaces infrastructure optimization, leading to bloated costs that erode margins and limit reinvestment in product development.
Challenges during the project development
Dynamic Cost Patterns
Vercel’s usage-based pricing meant costs fluctuated with traffic and deployment frequency. We addressed this by implementing predictive monitoring tools to anticipate cost spikes and adjust configurations proactively.
Balancing Performance and Cost
Optimizing serverless functions risked impacting performance. We conducted rigorous A/B testing to ensure latency remained below 100ms while reducing invocation costs.
Client Team Alignment
The client’s developers were unfamiliar with some optimization techniques (e.g., ISR). We provided training sessions and detailed documentation to bridge the knowledge gap, ensuring sustainable maintenance post-project.
Solution
Strategic Vercel Cost Optimization
To address the client’s challenges, we deployed a specialized team of Vercel experts to analyze and optimize their deployment architecture. Our approach focused on three pillars: serverless function efficiency, build process streamlining, and cost monitoring.
Team Expertise: We augmented the client’s internal team with our Vercel specialists, allowing their developers to focus on core product features while we handled platform optimization.
Technology Stack: We leveraged Vercel’s analytics, Next.js optimizations, and custom monitoring tools to reduce costs without compromising performance.
Process: We adopted an iterative optimization cycle, analyzing usage patterns, implementing changes, and monitoring impacts in real-time.
Our team collaborated closely with the client to implement a prioritized list of optimizations:
Overprovisioned serverless functions and overused API routes led to excessive function costs.
Streamline Next.js builds to minimize build minutes and cache dependencies effectively.
Implement usage monitoring dashboards to provide real-time cost visibility.
Adjust deployment configurations to align with the client’s growth trajectory.
The client provided usage data and access to their Vercel dashboard, enabling us to start the optimization
Main Features
To address the client’s cost challenges, we introduced several key optimizations, each designed to maximize efficiency on Vercel’s platform:
Cost Monitoring Dashboard
We utilized Vercel’s built-in analytics dashboards to provide real-time insights into function invocations, build times, and bandwidth usage. This enabled the client to monitor cost drivers and address spikes proactively.
Optimized Serverless Functions
We refactored serverless functions and API routes to minimize execution and invocation counts. Techniques included async action parallelization, database query optimization, and flow changes to improve efficiency. Additionally, bundle optimization for API routes reduced memory usage.
Streamlined Build Pipeline
We optimized the Next.js build process by enabling incremental static regeneration (ISR), caching dependencies, and removing unused assets. We also implemented bandwidth reduction techniques, such as compressing assets and optimizing image delivery. These efforts reduced build minutes by 40% and lowered bandwidth costs, keeping the client within their Vercel plan’s limits.
Deployment Configuration
We adjusted Vercel’s deployment settings to balance performance and cost, ensuring the platform efficiently handled peak traffic without overprovisioning resources.
Technical Details
Next JS
Vercel
Tailwind
Why These Technologies?
Next.js: Ideal for Vercel deployments, offering built-in optimizations like incremental static regeneration (ISR), image optimizations, and efficient API routes critical for the project’s performance needs.
Vercel Analytics API: Enabled real-time cost tracking, critical for identifying optimization opportunities.
Tailwind CSS: Reduced CSS bundle sizes, improving load times and lowering bandwidth usage.
These choices aligned with Vercel’s ecosystem, ensuring compatibility and maximizing cost savings.
Business Implications of the decision
The optimization project delivered significant benefits to the client’s business:
Cost Efficiency: Reduced Vercel costs by 35%, freeing up budget for product innovation and marketing.
Scalability: Enabled the platform to handle 1,5x user growth without proportional cost increases.
User Experience: Maintained low-latency performance, ensuring a seamless experience for global users.
Competitive Advantage: Lower operational costs strengthened the client’s pricing flexibility in a competitive SaaS market.
Sustainability: Established a framework for ongoing cost management, ensuring long-term scalability.
By addressing Vercel-specific cost drivers, we empowered the client to scale confidently while maintaining profitability and user satisfaction.
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Project Management
We managed the project using a hybrid Agile approach, combining sprint-based development with milestone-driven deliverables to accommodate the client’s dynamic needs. Key practices included:
Daily Syncs: Regular meetings with the client’s CTO and developers to align on priorities and review progress.
Shared Tools: We used GitHub for version control and task tracking, integrating with Vercel’s deployment pipeline for seamless updates. Slack facilitated real-time communication.
Iterative Optimization: We conducted daily reviews of Vercel usage data during development, adjusting optimizations based on performance and cost metrics to test changes in real-time.
To ensure frictionless collaboration, we aligned our workflows with the client’s existing processes, adopting their preferred tools and schedules. This minimized onboarding time and maximized productivity.
How did we make project management frictionless?
By aligning our project management strategies with Colony's internal processes and utilizing GitHub for centralized communication and task management, we achieved a synchronized and efficient development process.
We continuously evolved our project management approach to meet the specific needs and requirements of the project, maintaining flexibility and responsiveness throughout the development cycle.
Results
Since implementing the optimizations, the client has achieved significant cost savings and performance improvements:
35% Cost Reduction: Monthly Vercel costs dropped by 35%, saving thousands annually.
40% Build Time Reduction: Streamlined builds reduced deployment times, improving developer productivity.
1,5x Traffic Capacity: The platform now handles double the user traffic without additional costs.
Improved Visibility: The cost monitoring dashboard empowered the client to manage usage proactively.
The project launched in a controlled beta in December 2024, with ongoing refinements based on usage data. User feedback has been positive, with clients reporting faster load times and no disruptions during peak usage. Our team continues to support the client, ensuring the platform remains optimized as it scales.
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