With over $500 billion in net sales revenue in 2022, it’s easy to see that AWS has a huge number of dedicated customers, all willing to pay top dollar for the services it provides. You’re probably one of those customers yourself!

But what if you could get an average 9% discount on all of your AWS bills?

That’s exactly what getting an AWS EDP will do for your company, and we’re here today to tell you everything about them. From what an AWS EDP is and how to qualify, to negotiating terms and how to get the most out of your offer, we’ve split up today’s post into the following sections:

• What is AWS EDP?
• How to qualify for AWS EDP
• How to negotiate your AWS EDP
• Making the most of your Enterprise Discount Program
• What to do if you overcommitted to an AWS EDP
• The best way to reduce your AWS bills

Let’s get started.

What is AWS EDP?

AWS EDP stands for the Amazon Web Services Enterprise Discount Program, which is a savings program specifically designed for users with a history of high usage and long-term commitment to AWS called an Enterprise Agreement. Think of it like a special offer that’s available to large, consistent customers of AWS.

However, it’s not just a discount compared to regular pricing. AWS EDP is instead designed to help teams scale efficiently and grow their businesses in the cloud. It’s a way to help you get more out of your AWS account while not having to pay so much to lay the groundwork to scale up operations.

AWS won’t do this for any old customers though (even long-term ones). High, consistent spending is the prerequisite to qualify for the AWS EDP, but you’ll have to commit to the program itself for anywhere from 1-5 years in order to be accepted and you’ll have to commit to paying for Enterprise Support for your whole organization during that time. It’s an extra measure to make sure that AWS isn’t handing out discounts for the sake of it. By committing to a set time and some increased support spending, you’re showing AWS that you’re going to generate X years of extra value for them by utilizing the discount - it’s the best of both worlds, as you get to scale at lower pricing points while AWS gets a guarantee of business.

As you might expect, the longer you commit to the program, the bigger the discount you receive will be. If you’re certain of the time you’ll be using AWS for, and how long (and aggressively) you’ll be scaling your operations, it will definitely pay to commit for the longest period possible to get the highest discount.

Rounding out the basic information is that there is no “standard” AWS EDP. Any discount that you can get will be a result of negotiating with the AWS sales team, so while there are some commonalities that we can point out, there is no guarantee of your eligibility or even of the exact discount you’ll receive.

There are a few more stipulations and drawbacks to the program which we’ll get into later, but for now let’s run through what you need to do in order to qualify for an AWS EDP.

How to qualify for an AWS EDP

We’ve already stated that you need to have a history of high AWS usage and that you’ll need that history to span a fair length of time. The higher your usage and the longer the history of your account spans to, the stronger your position will be when trying to negotiate a higher discount for your EDP. The only exception to this is if you’re in a data center and planning to move to AWS with a lot of traffic - in this case you’ll get an EDP right off the bat to incentivise your move.

To get the most out of the discount you’ll need to be spending around $42k per month on your AWS account (assuming that you’re in a US region), hence you can see why it’s a program designed for enterprises only. At the bare minimum you’ll have to show a history of spending at least $500K on AWS products and services annually, although there could be potential to include any upcoming commitments in that figure too.

For example, if you’ve only spent $400k in the last 11 months but have another $100k in committed costs over the current month, be they Reserved Instances or otherwise, you’ll have a solid foundation from which to carve out your discount program.

While spending $500K over a year is the only hard rule that exists to qualify for an EDP, it’s absolutely worth noting the elements which can affect your discount rate and even your chance of negotiating a discount at all.

The most obvious aspect is that of your history and spending amount. While $500K is the minimum amount, if you can show evidence of spending beyond that in the last year or if you can demonstrate that level of spending in the past few years in a row, you’ll be in a stronger position. AWS wants to know that you’re going to stick around and that the discount they’re offering will result in a greater return on value from their standpoint, so assuring them that you’ll continue to use their services at a high level is a great way to get a little extra off the final bill.

Speaking of assurances, the other main element of your negotiations will be the amount of time you commit to the AWS EDP for. Anecdotally the final discount on all AWS services for an EDP is 5-10%, with many hovering around the 9% mark, but that doesn’t mean you’ll be forced into that bracket, and you aren’t guaranteed to get that average 9% off either. Keep in mind that 10% isn’t the highest offering out there. Aimably clients have reported discounts in the 18-20% range for $50 million in annual AWS spend.

The stronger you can make your position, the better. The best way to do that is to commit to as long of a time period as you can without causing your company to lose money through unwanted spending.

This is where you need to speak to your team, get their buy-in, and show why the AWS commitment will help your operations. If you’re already spending enough to reach the $500K threshold to apply for an EDP then you’ll likely be able to convince your team through the potential savings alone, but this is especially true if you’re trying to scale your operations over the next 1-5 years.

How to negotiate your AWS EDP

There are two core elements to negotiating the best deal that you can with AWS’ sales team for your EDP; forecasting your usage and requirements, and your negotiation skills.

The first is something that you should be doing no matter whether you’re applying for an EDP or not. You need to be accurately forecasting your cloud usage (particularly in regards to the AWS products that you use) in order to show your team what you’ll need and to convince AWS that your company will bring them enough business to be worth the higher discount rates.

The higher your forecasted usage, the easier it will be to get your own team to sign off. You’ll also be in a stronger position to negotiate a better rate with AWS, as they will stand to gain more if you can convince them that the value of your increased usage is worth the maximum discount that they’re willing to offer.

The other side of forecasting is that of your cloud requirements. By knowing what your requirements are well in advance you can better estimate your future spending and utilize that knowledge in your negotiations with AWS. For example, if you know that you’ll need to run a new set of expensive instances in order to scale your operations, you can use that as a point for haggling a bigger discount.

Your negotiation skills are the other big hitter here. AWS wants your increased business, yes, but the better you can argue your points and, more importantly, the worth of said business, the more likely you are to get a higher discount through the AWS EDP.

Let’s say that you’re trying to get the best possible deal on your EDP. You’ve already forecasted your usage, requirements, and spending, and you’re certain of your commitment to the maximum usage terms (5 years).

How else can you make your position stronger?

Well, consider AWS’ aims in this negotiation and in offering an EDP in the first place. They want to attract more business. So, you could show them what the long-term benefits of business with your company are. What are your future projections? How much will you expand your operations (and thus your AWS usage and bill)? Is there anyone else in your company which you could promote AWS to in order to expand your budget? Do you have a parent or subsidiary which have or will require its own AWS account? If so, you could group your bills together and scale both under the EDP program, thus getting the best discount possible while also inflating your company’s value in AWS’ eyes.

Sadly, we can’t help you when it comes to specific tactics or how you should present your arguments. However, once you have the best deal possible we do have some tips on how you can make the most out of your AWS EDP…

Making the most of your Enterprise Discount Program

Here are a few ways to get the most out of your AWS EDP:

• Consolidate your company’s AWS bills
• Include training costs in your bill
• Factor external influences into your plans
• Set your commitment thresholds to just below your expected usage

Once you have the discount, you want to be applying it to literally everything you can in order to save the most money. This is why it’s so important to consolidate all of your company’s AWS accounts into one master account which fields the bill (and the discount is thus applied to). It’s great for being able to negotiate a larger discount due to the higher value of the account, and it means that you’re saving as much money as possible, even if that means grouping accounts from your parent company or subsidiaries.

You can also apply your EDP savings to AWS Professional Services, support, and training, so long as those services are purchased after the start of the EDP. This is a fantastic way to save more money on services that you need to access, and it’s something that’s easy to overlook when reporting your other expenses that are all related to specific products (EC2, S3, the AWS Marketplace, etc).

Another great tool in your arsenal is tracking external influences, such as the state of your market and how external factors such as time of year affect your traffic and usage spikes. Knowing these in advance will help you to put together the best proposal possible for why you should get a larger discount while also not tying your company into a commitment that will result in your overspending.

Speaking of overspending, the best way to avoid this is to set your commitment thresholds for the EDP slightly below your expected average usage. Any usage above what you commit to will be charged according to the EDP discounted rate, so you’re not losing out by going over. However, you want to balance your limit so that you’re not paying for usage that you don’t end up needing, but you also commit to as much as possible in order to have a better chance of getting a higher discount rate.

It’s all a balancing act, and walking that fine line (along with negotiating the best discount you can get) is the real difficulty with getting an AWS EDP.

What to do if you overcommitted to an AWS EDP

Okay, we’ve highlighted how beneficial an AWS EDP can be. Now let’s cover what to do if you accidentally overcommit to one.

There are many reasons why you may have overestimated what you need and overcommitted. For example, you may have been planning to migrate to AWS but didn’t do it as fast as you thought you would. Perhaps your company’s growth slowed in relation to the economy slowing. Maybe you started to decrease your usage in response to macroeconomics.

It doesn’t ultimately matter why you overcommitted; the only important thing is to recognise that you have overcommitted as soon as possible. The sooner you do so, the faster you can act and the less that you have to do.

Say that you committed to $5 million annually for 5 years. However, it’s year two and you’re on track to spend $4 million that year, meaning that the difference could potentially be $4 million ($1 million for the next four years). Barring some last minute purchases which would make up the difference, if you’ve recognised that discrepancy in the second year then you have the next four years to adjust and make it up rather than coming to the end of your fifth year and being stuck in the mud.

As for ways you can mitigate overcommitment, here are a few tips.

First, move as many SaaS vendor contracts as possible to the AWS marketplace (such as Okta). For every SaaS vendor that sells on the AWS marketplace, you can ask them to create a private offer for you on the marketplace so that you retain your originally negotiated terms with them but you pay via AWS. These purchases aren’t available for your EDP discount, and your bookkeeping team will have to identify them as purchases from these SaaS vendors even though the invoice will come through AWS, but that spending will count towards your EDP commitment. This is one of the best ways to meet your commitment if you know in advance that you aren’t going to hit it.

Second, you can prepurchase RIs or Savings Plans for the next year. This is more of a solution to deploy if you’re scrambling at the last minute to make your commitment, as you’re paying ahead for services that you don’t currently need and it drains your current cash pool. Still, at least you’re only really limited in the short term as a result.

Finally, you could apply the surplus to a newly negotiated EDP. Just make sure that the new one is one that you can commit to because you’ll feel the pressure to do so increase significantly. Amazon will only roll your EDP over to a new EDP if they are happy with your renewal rate (i.e. it’s high enough for them). However, in this case at least you can use the vendor/marketplace trick above for the future EDP to guarantee the payments.

The best way to reduce your AWS bills

Having an AWS EDP is a great way to discount future usage in return for committing to said usage, but there’s a more effective and immediate way to consolidate and reduce your AWS bills; Aimably.

Our AWS Invoice Management Software will help you to consolidate all of your bills into one easy-to-manage location, letting you see an overview of what you owe without having to fish around in separate accounts for the information. You can verify your invoices against actual usage to spot any discrepancies and actively work with your finance team to reduce delays in approval.

We also have an AWS Cost Reduction Assessment which will let you optimize your AWS account without affecting your operation’s performance. By assessing your CUR data in the context of your business and operations, we’ll provide you with a prioritized list of all of the actions you can take to reduce your AWS bill, what effect they will have, and even the risk level associated with those changes.

‍What are you waiting for? Start reducing your AWS bill today with Aimably!