5 min to readApplication Services

How to deliver software cheaper: the unit economics of DevOps

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Brett KeownDevOps Practice Leader
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The past few years have been difficult for businesses of all sizes, especially in the face of ongoing economic uncertainty. SoftwareOne is committed to helping our customers navigate these challenges and emerge stronger.

We believe that the companies that will thrive now and over the coming years are those that are looking to the future and focusing on their competitiveness and innovation. By investing in new technologies and solutions, businesses can position themselves for success in the years to come.

Unit economics is on the rise in DevOps, and for good reason. By measuring the revenue and costs associated with each unit of software development activity, organisations can gain insights that enable them to make more informed decisions about how to invest their resources and improve efficiencies.

In this article, we will explore the unit economics of DevOps in more detail and discuss how organisations can use this information to improve their performance.

You are probably already familiar with the term "DevOps". DevOps, a combination of development and operations. This area of business technology is revolutionising the software development landscape. It emphasises collaboration, automation, and continuous delivery for faster and more efficient software development processes. It’s a process that to some extent is already present in most forward-thinking IT-centered enterprises. The key to success is to make it as efficient as it needs to be to provide the transformational   results it has the potential to deliver. While many organizations focus on the technical aspects of implementing DevOps practices, it is equally important to consider the unit economics of DevOps.  

Unit economics is the study of the financial performance of a DevOps team or a DevOps project. It involves measuring the costs and revenue associated with DevOps activities, such as infrastructure provisioning, code deployment, and incident response.  In simple terms, unit economics in DevOps is about answering the question: how much does it cost us to build, deliver, and maintain our software? 

How unit economics improves DevOps value? 

Cost Efficiency and Optimisation.  Embracing the unit economics of DevOps empowers organisations to spot and fine-tune cost drivers within their software development lifecycle. By scrutinising the expenses tied to each unit of software delivery, teams can pinpoint inefficiencies, cut out wasteful practices, and streamline their operations.


This savvy, cost-conscious approach ensures that resources are utilised as effectively as possible, ultimately driving down the overall cost of software delivery and maximising profitability. For instance, by eliminating bottlenecks in the deployment pipeline, organisations can drastically reduce the time and effort needed to release each software unit, and this translates  to substantial long-term cost savings.

Scalability and Growth.  DevOps practices can supercharge an organisation's software development processes, enabling scalability. However, scaling can be risky if unit economics are not considered. By understanding the economics of each software delivery unit, organisations can gauge the viability of their scaling efforts. This means examining how costs, revenues, and productivity metrics shift as volumes increase, and making adjustments as needed. This insight guides smart decisions about scaling operations while maintaining profitability.

Examining metrics like revenue per unit and cost per unit, you can assess how these variables fluctuate with increased volumes. Through optimising unit economics, organisations can confidently ramp up their software delivery capacity, knowing that each unit's economic value remains high and justifies the associated cost. 

Continuous Improvement.  Unit economics in DevOps provides a framework for continuous improvement. By measuring and analysing the vital metrics associated with each unit of software delivery, teams can identify areas for improvement. Whether reducing the time to market, improving quality, or optimising resource utilisation, unit economics acts as a feedback mechanism, allowing you to refine your processes iteratively. This focus on continuous improvement ensures that DevOps practices deliver tangible economic value and help you stay competitive in a rapidly evolving market.

Return on Investment (ROI).  DevOps initiatives require investment in infrastructure, tooling, and training. Understanding the unit economics allows you to accurately assess your DevOps investments' ROI. By tracking economic metrics such as the revenue generated per unit, cost per unit, or customer acquisition cost, businesses can determine the financial impact of their DevOps practices.   This insight empowers you to make data-driven decisions regarding resource allocation, investment prioritisation, and optimisation efforts. By measuring the ROI of implementing automated testing processes, you can evaluate the economic benefits in terms of reduced defect rates, improved software quality, and cost savings related to rework and customer support. 

Business Alignment.  Unit economics in DevOps bridges the gap between technical and business-focused people. It provides a common language to discuss the economic implications of technical decisions. By quantifying the economic value associated with each unit 


Decoding DevOps efficiency.  In conclusion, the unit economics of DevOps plays a crucial role in the success of software projects and businesses. With a solid grasp on the financial and economic side of each chunk of software you deliver, you can achieve r cost-savings, limitless scalability, ongoing improvements and a far greater ROI from your DevOps efforts.
  • Cost per Unit (KPI)

    Measure the total cost incurred for delivering a software unit. This KPI helps evaluate the efficiency and cost-effectiveness of your DevOps practices.

  • Revenue per Unit (KPI)

    Determine the revenue generated from each unit of software delivered. This KPI provides insights into the economic value of your software products or services.

  • Time to Market (KPI)

    Track the time it takes for a software unit to move from development to production and reach the end-users. This KPI indicates the speed and efficiency of your DevOps processes.

  • Defect Rate (KPI)

    Monitor the number of defects or bugs identified in each unit of software delivered. This KPI reflects the quality of your software and helps identify areas for improvement.

  • Customer Satisfaction Score (KPI)

    Assess the satisfaction level of your customers for each unit of software delivered. This KPI measures the customer experience and the economic impact of customer satisfaction on your business.

  • Deployment Frequency (KPI)

    Measure the frequency of software deployments per unit of time. This KPI reflects the agility and efficiency of your DevOps practices.

  • Infrastructure Utilisation (KPI)

    Evaluate the utilisation of your infrastructure resources, such as servers, databases, or cloud instances, per unit of software delivered. This KPI helps optimise resource allocation and cost efficiency.

  • Customer Acquisition Cost (CAC) to Lifetime Value (LTV) Ratio (KPI)

    Calculate the ratio between the cost of acquiring a new customer and the lifetime value of that customer. This KPI indicates the economic viability of your customer acquisition efforts.

  • Change Failure Rate (KPI)

    Track the percentage of failed or problematic changes introduced during each unit of software delivery. This KPI helps assess the stability and reliability of your software deployments.

  • Return on Investment (ROI) on DevOps Initiatives (OKR)

    Set an OKR to measure the financial returns gained from your investments in DevOps practices. This OKR evaluates the economic impact of your DevOps initiatives and guides decision-making.

Remember, your specific KPIs or OKRs may vary depending on your organisation's goals, industry, and software development context. It is important to align these metrics with your business objectives and regularly track and analyse them to drive continuous improvement and optimise unit economics in DevOps.

Final thoughts

Ultimately, understanding unit economics in DevOps isn’t just a skill – it’s your ticket to turning a profit, making savvy decisions, and staying ahead in the rat race of modern software development.  Additionally, unit economics facilitates better teamwork between technical teams and business stakeholders, leading to more informed decision-making. 

In the fast-paced world of software development, it is essential to consider unit economics when shaping and improving your DevOps practices as so many organisations are now doing. Businesses that fail to do so run the risk of falling behind their competitors. Thank you for reading, and stay tuned for the next article of the series: how to measure Unit Economics in DevOps? 

Should you need any support with your DevOps journey, don’t hesitate to contact us. Explore our DevOps services.

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A man in glasses is smiling in front of a brick wall.

Brett Keown
DevOps Practice Leader