In the 2024 Startup world, every penny counts, and the current funding climate makes it even harder for young companies to thrive. Software and AI startups, in particular, rely heavily on cloud services. These services are often the second-highest expense, after salaries, and can even be the number one expense for AI companies. Without a strategic approach to cloud spending, these costs can quickly become a significant obstacle to growth.
This is where cloud credits comes in. Major cloud providers offer free cloud credits to startup. With this guide you will understand that it’s possible to unlock more than $500,000 in cloud credits !!!
Imagine a scenario where ten top-rated restaurants near your office offer you a free meal each. Would you limit yourself to just one, or take advantage of the opportunity to sample a wider variety? Exploring different culinary experiences allows you to discover hidden gems and find the perfect fit for your palate.
The same principle applies to cloud credits. Resist the urge to dive headfirst into just one or you might end up like Tom Hanks. Instead, strategically sample different platforms, allocating credits progressively as your needs evolve and to maximize the free credits that have an expiration date.
This cloud credit guide will equip you with the knowledge to strategically utilize cloud credits and make informed decisions.
The True Value of Cloud Credits for Startups
Cloud credits provide numerous advantages for startups, including:
- Reduced Upfront Costs: With limited resources, startups can leverage cloud credits to experiment with different cloud platforms and services without significant financial investment. This allows them to identify the best fit for their needs before committing to paid plans.
- Facilitated Experimentation: Cloud credits create a sandbox environment for startups to test new technologies, prototype applications, and iterate quickly. This experimentation fosters innovation and accelerates time-to-market.
- Optimized Resource Usage: Credits can be used to identify inefficiencies in your cloud setup. By analyzing usage patterns, startups can optimize their resource allocation and minimize costs before scaling their infrastructure.
- Informed Decision-Making: Leveraging credits from multiple providers allows startups to experience different cloud platforms firsthand. This comparative exploration empowers them to make informed choices about the most suitable cloud solution for their long-term strategy.
Comparing Cloud Credit Programs by Major Providers:
The good news for startups is that free credits are practically a universal offering amongst major cloud providers. These credits range from a few thousand euros to potentially reaching six-figure sums, providing a significant financial boost to launch and grow your business. However, it’s crucial to understand that eligibility requirements vary from provider to provider.
To help you navigate this landscape strategically and unlock these valuable resources, we’ll delve into the credit programs offered by leading cloud providers. We’ll categorize them based on their market position:
- Hyperscalers: These industry giants dominate the cloud market and offer robust credit programs specifically designed for startups. We’ll explore programs from AWS, Microsoft Azure, and Google Cloud Platform (GCP).
- Alternative Providers: Beyond the hyperscalers, a vibrant ecosystem of alternative cloud providers caters to niche markets. We’ll examine the credit programs from OVHcloud, Scaleway, Alibaba Cloud. Linode/Akamai also offer something but is not in this article. For Oracle cloud, I couldn’t find relevant information. DigitalOcean doesn’t offer anything.
By understanding the unique eligibility criteria and benefits of each program, you can strategically leverage them to maximize their impact on your startup’s growth journey.
| Provider | Program Name | Duration | Credits |
| AWS | Activate | 2 years | Up to $100,000 |
| Azure | Microsoft for Startups | 1 year | Up to $150,000 |
| GCP | Google for Startups Cloud Program | 2 years | Up to $350,000 (AI startups) |
| OVHcloud | Startup Program | 1 year | Up to €100,000 |
| Scaleway | Startups Program | 1 year | Up to € 36,000 |
| Alibaba Cloud | Startup Catalyst Program | 1 year | Up to $120,000 |
As cloud providers offer various tiers to support startups at different stage of their journey, I couldn’t represent the complexity in the above table and I encourage to read below to understand each program in details.
AWS Activate program
New startups can apply for the AWS Activate program, which offers up to $100,000 in AWS credits over a two-year period. The activate program starts with a $1K credit that is fairly easy to get. Afterward, you can ask for more credit (up to $100,000) but it requires that your startup is associated with an accelerator, incubator or Venture backed. The more financing you get, the easier it will be to get the full 100K package. On top of this AWS, offers other perks such as access to the AWS startup loft that offer webinars and sessions with AWS startup experts.
To qualify for AWS Activate, your startup should meet the following criteria:
- Funding Stage: AWS Activate welcomes startups at all stages, from unfunded to those with Pre-Seed, Angel, Seed, Debt Financing, or Series A funding.
- AWS Credit Utilization: To ensure fair access, startups cannot have previously received or redeemed more than $100,000 in AWS credits through the AWS Activate program.
- Online Presence: You’ll need an active AWS account, a company website, and a LinkedIn page.
- Startup Age: AWS Activate prioritizes supporting young businesses. Your startup must be less than ten years old.
Google Startup Program
The Google for Startups Cloud Program stands as a valuable resource for startups seeking to leverage Google Cloud Platform (GCP) for growth.
This program offers two tiers, catering to startups at different stages:
- Start Tier: Ideal for early-stage startups, this tier provides up to $2,000 in GCP credits spread over 1 year. This allows you to experiment with basic GCP services and explore the platform’s capabilities.
- Scaleup Tier: Designed for established startups with a focus on innovation, the Scaleup tier offers significantly more credits, reaching up to $350,000 over two years for AI startups. This increased credit allowance enables you to scale your applications and workloads on GCP.
On top of the money you get access to Google Cloud enhanced support and Google engineer plus other perks such as Google Workspace.
Conditions for the start tier:
- Young tech startup (under 5 years old)
- Funding itself (bootstrapped)
- New to Google Cloud Platform (no prior credits).
Conditions for the Scaleup Tier
- Startup that has received equity financing ranging from pre-seed to Series A (within last 12 months for Series A)
- Max 10 years old company
- Has not received more than $5K GCP credit previously
Microsoft for Startups Founders Hub
Startups can leverage the Microsoft for Startups program to access valuable resources, including up to $150,000 in Azure credits usable for a wide range of Azure services over one year. This program unlocks additional benefits beyond the credits, allowing you to tap into the vast Microsoft ecosystem. Imagine the possibilities with LinkedIn Premium, Office 365 subscriptions, OpenAI credits, GitHub seats, and more – an unmatched offering that showcases the power and integration of the Microsoft platform.
Tiered Credit Structure:
Microsoft tailors its credit allocation based on your startup’s maturity. Here’s the breakdown:
- Level 1: $1,000 in Azure credits
- Level 2: $5,000 in Azure credits
- Level 3: $25,000 in Azure credits
- Level 4: Up to $150,000 in Azure credits
The first three levels generally have simpler eligibility requirements. Reaching Level 4 likely involves additional criteria, such as venture capital (VC) funding.
Eligibility Requirements:
To qualify for the Microsoft for Startups program, your startup must meet these key criteria:
- Software Focus: You must be developing a software product or service.
- Limited Azure Usage: You cannot have received more than $10,000 in free Azure credits previously.
- Geographic Location: Your startup’s headquarters must be located in a country covered by the Azure for Startups program.
- Funding Stage: The maximum funding round your startup has completed should not exceed Series D.
OVHcloud Startup Program:
OVHcloud offers a program specifically designed to support startups and scaleups in their cloud journey. Given OVH size (compared to Hyperscalers), this is a very generous offer. The OVHcloud Startup Program goes beyond just credits. It offers additional benefits like visibility and networking. Here’s what they provide:
- Two Tiers: The program offers two tiers:
- Start: This tier provides €10,000 in free cloud credits, along with consultation time with an OVHcloud engineer to help navigate the platform and optimize resource usage that lasts 12 months.
- Scaleup: Established startups with significant growth potential can apply for the Scaleup tier. This tier offers up to €100,000 in free cloud credits, allowing them to scale their infrastructure without worrying about upfront costs.
Eligibility:
- Minimum Viable Product (MVP): You must have at least a Proof of Concept (POC) or MVP that can be implemented on the OVHcloud platform.
- Cloud Infrastructure Need: Your startup should have a near-term need for cloud infrastructure.
- Professional Startup or Activity: The program is designed for professional startups, not NGOs or associations.
- Innovative Project: Your project should be innovative and have growth potential.
To reach the $100,000 credits OVH will analyze your infrastructure need and spend.
Scaleway Startup Program
Scaleway offers a compelling Startup Program specifically designed to empower early-stage startups. This program equips them with the resources they need to experiment, build, and scale their businesses on the Scaleway cloud platform. The program is divided in 4 tiers:
- Founders program: Target very early stage project and offers €1,000 over 12 months
- Early Stage program: During 6 months, Scaleway offer €3,600 free credits
- Growth Stage: Destined for seed to Series A startup, Scaleway offers €36,000 that you can use within a year
- Scaleups: From Series A and above, Scaleway covers up to 80% of your spend over 24 months. The coverage percentage is degressive as shown in image below.
What’s particularly interesting with Scaleway startup program is that if you join in very early days, you can enjoy benefits for almost 5 years.
Alibaba Cloud Startup Catalyst Program
Alibaba Cloud offers the Startup Catalyst Program, specifically designed to empower startups in their journey to success.
The Alibaba Cloud Startup Catalyst Program offers tiered free credits:
- Launcher Tier: $1,000 (valid for 3 months)
- Gold Tier: $20,000 (valid for 6 months)
- Diamond Tier: $100,000 (valid for 1 year)
To apply, submit a Business Proposal outlining your cloud usage plans, growth goals, and estimated monthly credit needs. Alibaba Cloud reviews proposals within 7 business days and may provide feedback for resubmission before approval.
Lifetime Maximum: You can redeem a maximum of $120,000 in total credits across all tiers. This includes the $1,000 Launcher tier and the $20,000 Gold Tier, with the Diamond Tier acting as a top-up to reach the $120,000 limit. Redeeming more than this amount using multiple accounts may result in forfeiting the excess credits.
Maximize the benefits of cloud credits:
Free cloud credits are awesome but even if it’s “free money”, it’s very important to use them efficiently. You never know how long your startup gonna need to take off and it might be later than expected. Moreover you will probably prefer to spend your money on customer acquisition rather than on infrastructure costs.
Making the Most of Your Startup Cloud Credits:
Treat your cloud credits like real money. Track your cloud costs weekly and implement FinOps best practices from the very beginning. Avoid overprovisioning instances or creating unnecessary resources. Use FinOps tools like Holori to manage and track your cloud costs in a simple way !
Activate Credits Strategically:
Don’t activate all your cloud credits simultaneously. Start with a single provider, like AWS, and exhaust those credits before activating Azure or GCP. This approach can potentially stretch your credits for 4-5 years before needing to pay for cloud resources.
Maintain Vendor Flexibility:
Prioritize services that don’t lock you into a specific vendor. Over-reliance on vendor-specific services can hinder your ability to migrate and efficiently utilize credits across different providers.
Focus on Product-Market Fit:
Don’t prioritize a perfect infrastructure from the outset. As a startup, your primary goal is to find product-market fit. Experimentation and iteration are expected, and your infrastructure will adapt accordingly. Aim for a simple, functional solution that doesn’t lock you into a single provider.
Optimize After Exploration:
Once you’ve explored 3-5 providers and depleted your credits, make informed decisions about which providers and services to stick with. Leverage the learnings from your credit-fueled exploration to optimize resource usage and ensure efficient scaling.
Additional Tips:
- Stay Informed: Cloud vendor credit programs and terms can change. Regularly review program details to ensure you’re maximizing your benefits.
- Community is Key: Tap into the vast cloud community for guidance and best practices. On Reddit you will find plenty of info.
How you can use Holori to maximize your cloud credits
Multicloud cost tracking
- Centralized Cost Dashboard: Holori eliminates the need to juggle separate billing portals from different cloud providers (AWS, Azure, GCP, etc.). It provides a single, unified dashboard that aggregates all your cloud costs in real-time. This holistic view empowers you to see exactly where your credits are being used and identify areas for optimization. If you use multiple providers to maximize free credits, it won’t be sustainable to use AWS Cost explorer, Azure Cost management and GCP cost management tools
- Granular Cost Allocation: Holori allows you to exclude credits and see your invoice like if you were paying real money. Drill down and see how your credits are being spent by project, team, or service. This granular level of detail helps you pinpoint which projects or services are consuming the most credits and identify the root cause of any potential inefficiencies.
Set up Alerts
- Set Credit Burn Alerts: Holori allows you to configure custom alerts based on your credit usage. This proactive approach notifies you when you’re approaching credit depletion thresholds, giving you ample time to adjust resource allocation or optimize spending before credits run out.
- Identify Idle Resources: Holori analyzes your cloud usage patterns and identifies resources that are underutilized or left idle. You can then receive alerts for such idle resources, allowing you to terminate them promptly and conserve your credits.
Recommendations for cost saving
- Rightsizing Instances: Holori analyzes your workload requirements and recommends the most cost-effective instance types for your needs. This “rightsizing” ensures you’re not paying for more processing power than you actually use, maximizing the value you get from your cloud credits.
- Eliminate Unused Services: Holori identifies services that are no longer actively used but still incurring charges. You can then receive recommendations to terminate these forgotten services and prevent them from draining your valuable credits.
Wrap up
Cloud credits are a powerful tool in a startup’s arsenal, offering the freedom to experiment, optimize, and scale without breaking the bank. By strategically leveraging these credits, you can unlock a multitude of benefits, from reduced upfront costs to accelerated innovation.
For cloud providers it’s not altruistic because the main goal is to attract top startup that will spend millions in the years to come. Imagine the current cloud bill of Uber or Netflix? So don’t be shy or embarrassed about using as many provider as you can. It’s a Win Win for both providers and startups.
I really think it’s great because any startup can now build a software and host it in matter of days. Imagine how hard it was before cloud was born? Overall cloud credits is really pushing innovations and as startups we can all be thankful to the cloud providers 🙂
The startup road is long and complicated, so take advantage of those free credits wisely. Embrace a strategic approach where you activate credits progressively– focus on product-market fit first, prioritize vendor agnostic services, and track your cloud costs diligently. Consider leveraging FinOps tools like Holori to simplify credit management and gain valuable insights to optimize your resource usage.
Holori offer a free tier for startups that have a monthly cloud bill below $3K/month : https://app.holori.com/
