Distributed caching in datacenters provides 3-4x better cost efficiency primarily by reducing CPU usage rather than just improving latency. Application-level caches that store fully materialized objects deliver far better cost savings than storage-layer caches by eliminating query amplification and coordination overhead. The approach works best for rich-object workloads but struggles with strong consistency requirements, as freshness checks traverse most of the database stack and erase cost benefits. Cache placement matters more than cache size for cost optimization.
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