Optimaze has secured AUD $3 million in pre-seed funding to address cloud waste in the Australian enterprise sector.
The Sydney-based company, which describes itself as an AI-cloud waste startup, completed its funding round through investment from Arconic and The Innovation Club. The company aims to address what it identifies as significant inefficiency in global and Australian cloud computing expenditure.
The global cloud computing market is forecast to surpass USD $1 trillion in the coming year, and local spending is expected to reach AUD $10 billion, according to Gartner estimates cited by the company. Optimaze states that at least 30 per cent of this expenditure is wasted, but believes this number could be considerably higher in Australia once factors such as operational complexity and environmental effects are taken into account.
Ralf Capel, Co-Founder of Optimaze and former Amazon Web Services Commercial Lead, said inefficiencies within the sector have become increasingly acute as cloud services grow in number and complexity.
“Cloud waste has spiralled out of control, costing businesses billions and demanding roughly 1% of global energy consumption. With the current artificial intelligence boom, instead of addressing the root cause, today companies are pouring more money into expanding cloud infrastructure, making the problem exponentially more urgent.”
Capel added that he and Dawshiek Yogathasar, Co-Founder and former Rokt Vice President of Engineering, have observed the challenges enterprises face in managing on-demand cloud usage and controlling waste.
The company claims it has observed that cloud-literate organisations can reduce their on-demand cloud use by well over 30 per cent through optimisation and management. However, these processes can be labour-intensive, diverting engineers and finance teams from other tasks. Capel said this led them to seek a technical solution that ultimately became Optimaze.
“We have seen first hand how cloud literate companies reduce their on demand cloud use by well over 30 per cent through clever optimisation and management. However this is often a labour intensive piece of work that takes engineers and finance people away from their core activities. After searching unsuccessfully for technology that could systematically fix this, we decided to create Optimaze.”
Optimaze’s platform uses artificial intelligence to help enterprises identify and act on cloud waste in real time. The platform quantifies financial impact and provides AI agents, tasked with supporting stakeholders, to gain relevant insights. The stated aim is to reduce repetitive financial operations, such as tagging resources, by up to 90 per cent. Billing is based on achieved outcomes and usage.
Yogathasar said the energy waste within Australian cloud environments is rising, exacerbated by the growth in AI workloads and associated energy demand.
“Moreover, the energy waste in Australian cloud environments is already staggering and as AI workloads intensify, energy consumption is becoming a major bottleneck. This is evident in the large energy project big cloud vendors are planning. By helping enterprises become more efficient with their cloud resources, it opens the door for more sustainable innovation.”
The environmental impact of cloud computing is under increased scrutiny amid regulatory and investor demands for sustainability. Data centres’ energy and emission footprints are now comparable to those of the aviation industry. With generative AI models demanding up to ten times more computational power than previous workloads, the company suggests that the need for increased efficiency is a mounting concern for businesses.
Optimaze says its platform is designed to enable clients to address financial and environmental objectives simultaneously. Anthony Potts, Managing Partner at Arconic, said clarity on cloud spending is essential as AI-heavy workloads become more common.
“Cloud spend is the largest controllable cost after payroll, and it’s exploding as every business from SMBs to corporates deploy AI-heavy GPU workloads. Businesses will increasingly need to quantify which workloads create the most value. Optimaze’s AI agents deliver that insight in real time and automate fixes, setting a new standard for financial and environmental accountability in the cloud.”
The company has stated that this round of funding will be used to grow its engineering team, accelerate product development, and form partnerships with key cloud providers, starting with AWS. Optimaze is currently running a private beta of its software, with companies able to request access.