Breaking down where engineering money actually goes — and where it should go.
Typical breakdown: People (65-75%) — salaries, benefits, recruiting. Infrastructure (15-20%) — cloud, tools, licenses. Everything else (10-15%) — training, conferences, equipment.
People cost is the biggest lever, but most companies optimize infrastructure first because it's easier to measure. Focus optimization: hire fewer, better engineers rather than cutting cloud costs.
Like this analysis?
Get the weekly engineering economics briefing — one email, every Monday.
Subscribe Free →A single bad engineering hire costs 3-5x their annual salary. Here's the math.
8 minUnderstanding ASC 350-40 and how software development costs flow through your P&L.
11 minMost engineering organizations qualify for R&D tax credits and don't claim them.
9 minPublished Work
This article expands on ideas from my published work in CIO.com, Built In, Mind the Product, and HackerNoon. View published articles →
The Product Economist — Quantifying engineering economics for technology leaders, PE firms, and boards.