How I Reduced €700k in Annual Software Costs

I was asked to optimize technology costs.

Within six months, I reduced the software budget by €700,000 annually.

This isn't a story about discovering some magical tool. It's about how I used 10+ years of hands-on experience to do my job: analyze every technical decision, challenge assumptions, propose alternatives.

What I Found

The company was spending approximately €700k per year on premium software licenses.

Broken down:

• ~€100k for identity management
• ~€200k for CMS
• ~€200k for CRM
• ~€100k for managed Kubernetes orchestration
• ~€100k in hidden costs (vendor markups, intermediaries, contract inefficiencies)

None of these tools were wrong. They were all legitimate decisions. The problem wasn't their existence.

It was that no one had ever questioned whether, with this specific team at this specific stage of the company, they were still the right choice.

What I Discovered

This company's story is one I see often: the founders came from big corporations.

At a big corporation, you pay the premium for a reason: guaranteed SLA, 24/7 support, certified compliance, someone to call when there's a problem. Downtime costs real money.

But when you apply the same procurement model to a startup with 10 employees and a small user base, you're paying for insurance you don't need.

My responsibility as CTO was to bring awareness: "Here's what we're paying for. Here are the alternatives. Here's the real trade-off."

The Decision

I said: "For every tool, let's revisit whether this specific choice still makes sense for this specific stage of the company."

I eliminated intermediaries from contracts (we negotiated those €100k markups away directly).

I proposed leaner alternatives where the premium tool was oversized. Not because they were open source, but because they solved the real problem without adding overhead.

Result: €700,000 of annual running costs reduced.

What This Means for a CTO

A CTO doesn't blindly implement founder decisions.

A CTO is the person who brings expertise and clarity when context changes.

The procurement model of a big corporation isn't "wrong." It's just inappropriate for a different stage.

Your job is to recognize the context. And to decide consciously.

Not "cut costs because it's cheaper." But "cut costs because you understand what you actually need and what's overhead."

That difference—between an ignorant "no" and a conscious "no"—is where you add real value.

Aligned Incentives: Why It Matters That I'm an Internal CTO

There's a detail that rarely gets mentioned.

When an external consultant tells you "you'll reduce costs," they might have hidden incentives: commission from certain vendors, pressure to close quickly, no responsibility if things go wrong long-term.

When an internal CTO says "we'll reduce costs," their incentive is simple: the company's interest.

If I'm wrong, I'll see it every day. If the tool I propose fails, I'm the one managing the fallout. If the strategic choice backfires in 12 months, it's my job to find a solution.

I have no hidden conflicts of interest.

My only interest is: "Is this company spending money as intelligently as possible?"

This doesn't mean every CTO makes the right call. It means your incentive is aligned with the company, not with a third party.

When you hire an external advisor, ask yourself: "What's their real incentive?"

When you hire an internal CTO, the incentive is already in the job description.

The Question For You

If you're a CTO at a startup founded by former big corp executives: which technical decisions are you carrying from your past without questioning the context?

If you're a founder: have you ever asked your tech leadership whether your vendor strategy reflects where you are today, or where you came from?

Often, the answer changes everything.