The Predictable Path: Transforming SaaS Economics with Bare-Metal IaaS

Key takeaways

• Cloud pricing is based around on-demand scalability that’s intended to support strong spikes in demand. However, many workloads don’t experience a high degree of traffic volatility—meaning that teams end up paying for burst capabilities they don’t truly need. 
• As SaaS prices continue to rise, teams are looking for ways to reduce costs and ensure efficiency without compromising performance or reliability. 
• Hivelocity offers dedicated, bare-metal infrastructure as a service (IaaS) with fixed, predictable pricing alongside three purpose-built infrastructure tiers to help SaaS providers optimize costs. 

Cloud’s elastic, on-demand scalability makes it an ideal choice for certain types of workloads. But not every part of your SaaS stack requires these extreme burst capabilities—including the database tier, background workers, and staging environments. These tend to operate around the clock at steady utilization, with low levels of volatility to account for. 

The problem is that running these predictable workloads on public cloud infrastructure still incurs the premium cost of elasticity—even though the workloads don’t truly need it.  

Monthly Bills Are Growing 

Driven in part by consumption pricing, software costs are on the rise. The average enterprise SaaS spend is around $55.7 million a year, which represents an 8% increase compared to the previous year.1 79% of IT leaders indicate that they experienced a price increase at renewal in the past twelve months.2 

Faced with these trends, many SaaS providers are looking to control costs as effectively as possible. Reserved public instances and savings plans can help, but they also create cost lock-in that can have you paying for infrastructure capabilities you don’t need when things change.  

The Cost Advantages of Dedicated Hardware 

Many SaaS companies are exploring dedicated IaaS hardware as a more cost-effective option. Opting for single-tenant resources means your organization gets a predictable, flat monthly bill rather than one that spikes and fluctuates based on usage. 

Working with an IaaS provider such as Hivelocity, the underlying hardware is dedicated exclusively to your organization. It’s also priced for a fixed term. The IaaS model allows you to size the server to the workload instead of renting the next instance tier up just to get the resources you need. According to Datacenters.com, moving steady workloads from the cloud to dedicated infrastructure can reduce TCO by up to 40%.3 

Network charges are another place where your cloud bill experience significant fluctuation. Hivelocity’s networking has no ingress or egress fees, helping to ensure that your bill stays static and predictable. 

Cloud’s New Role 

Of course, the end goal isn’t to remove everything from the cloud. In fact, your application tier—and its unpredictable traffic patterns—should stay on cloud. 

The Hivelocity team is ready to help you transition predictable workloads such as databases and test environments to dedicated hardware. Doing so, you can ensure that each workload is placed on infrastructure that reflects its true requirements, and that your organization isn’t paying an elasticity premium for no real reason.  

The Hivelocity SaaS Bundle 

The Hivelocity SaaS Bundle is purpose-built to help SaaS providers optimize infrastructure costs without sacrificing reliability or performance.  

Our flat monthly cost structure applies across the three tiers: Engineering Compute (Tier 1), Production Compute (Tier 2), and Hi-Scale Compute (Tier 3). As your needs grow, the pricing model stays the same. Infrastructure as code (IaC) capabilities and API-driven provisioning mean that your team can keep the operational model its already familiar with as your workloads make the switch. 

Ready to get started? Our SaaS infrastructure specialists can help you identify the workload with the steadiest utilization—usually the database tier, which is also frequently the biggest line item on the bill. This allows you to make a great business case by comparing its steady monthly cost on dedicated hardware against its current consumption-based cost. 

Contact our team today to get started. 

FAQ

Q: Why does consumption-based pricing cost more? 
A: Consumption pricing like that typically experienced in the public cloud charges a premium for on-demand scalability, also referred to as burstability. You pay for this flexibility whether you use it or not. A workload that runs at steady utilization never needs that headroom, so it pays the premium without the benefit. 

Q: How does Hivelocity’s dedicated hardware change our infrastructure economics?
A: On our dedicated hardware, your infrastructure bill becomes a steady monthly cost instead of a usage meter, and you don’t have to deal with re-pricing as a result of rate card changes. There are also no ingress or egress fees, so network usage does not move the number. 

Q: Does everything have to shift off of the cloud? 
A: No. The application tier is a great fit for staying on the cloud, since traffic is typically unpredictable there. Steady-state workloads such as databases and test environments are the best candidates to move to dedicated hardware. 

Citations

1. Zylo, 2026 SaaS Management Index, January 2026  
2. Ibid. 
3. Datacenters.com, The Resurgence of Bare Metal Servers in 2025: Powering Performance, AI, and Cloud Alternatives, June 2025