Negotiating an AWS Discount

By Matt West

Director of Network Services, NPI

August 13, 2020

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As the cloud war wages on and commoditized pricing persists, many enterprises wonder if it’s possible to negotiate a discount with Amazon Web Services beyond what the vendor publishes publicly. For some customers, the short answer is yes – an additional AWS discount is possible.

While the numbers steadily evolve, recent data indicates AWS continues to be the dominant market leader with over 30% market share. Combined, Microsoft, IBM and Google account for approximately another 30%, with the rest of the market belonging to another 20+ suppliers (Alibaba, Centurylink, NTT, Orange, Rackspace, etc.) who in many cases are delivering more custom designed enterprise-facing services.

Publicly, AWS is known for its refreshingly transparent pricing. Customers simply go to the AWS portal and the portfolio of services, pricing, and discounts are easy to find. This works well for customers just getting started with AWS, but what if your company is spending $5M, $10M, $15M or more per year with AWS? Is it possible to get discounts incremental to those published on the website?

As AWS sought to earn more enterprise customers, it introduced its Enterprise Discount Program (EDP) several years ago. The EDP has not changed much since its inception but is now more commonly presented as a Private Pricing Term Sheet (PPTS). Although the discounts are not published, the pattern of having a tightly scripted discounts tied to volume of spend mirrors the transparency of pricing on the website. In other words, there is very little deviation between discounts granted to customers that are spending the same amount of money.

In addition to the standard EDP/PPTS terms, customers with unique demands for specific AWS resources may get customer-specific pricing or discounts on those services. Although less frequent, customers with significant spend may also negotiate more favorable terms for the Enterprise Support Program or for AWS Professional Services.

Historically, non-public AWS discounts have been hard to come by. But that’s changing, which brings us to the point – don’t assume AWS’s history of price transparency means your AWS quote is priced at fair market value. In all likelihood, there’s room to negotiate a better deal.