How AWS EDP Delivers Value Throughout Your Cloud Journey
Your organization relies on the cloud now more than ever, and it’s likely a critical part of your growth strategy. Cloud services enable you to scale rapidly and efficiently, but as your organization grows, so can your cloud costs. It’s crucial to keep these costs manageable to avoid overspending, which is why many organizations that rely heavily on Amazon Web Services (AWS) also use the AWS Enterprise Discount Program (EDP).
The AWS EDP can be an effective way to lock in a discount off standard pricing and reduce costs, especially when you understand the risks and complexities involved. While EDP requires more of a commitment than other options, companies already spending a lot of money with AWS can find this approach especially helpful.
Learn more about how AWS EDP works, why your company can benefit and how to get support for your EDP journey.
What Is an EDP?
Amazon launched the AWS Enterprise Discount Program (EDP) in 2012. The program is open to eligible customers that commit to significant annual spending with AWS — typically $1 million or more. With an EDP, Amazon determines the discount rate based on your total annual commitment and the growth of that commitment over time. This growth is an essential aspect of qualifying for an EDP, and it demonstrates your dedication to both AWS and the future of your business. Discounts can apply to almost all AWS services.
Note that an AWS EDP requires a commitment of one to five years. Combining a longer time period with a commitment to consumption and growth increases the risk of a shortfall, especially without the right planning and management. For example, if you only forecast usage based on historical data, you may overlook other cost-saving opportunities that are unrelated to an EDP. Employing additional cost savings techniques could result in lower monthly expenses, but this can also lead to overcommitting for an EDP.
At Mission Cloud, we advise customers on how to optimize and modernize their infrastructure first, because AWS EDP discounts on inefficient spend are less valuable than addressing the inefficiency first.
To learn what cost savings opportunities are available for your business, start with a cost optimization assessment.
Why Use AWS EDP?
The biggest advantage of an EDP is that it allows businesses to realize greater cost savings for the AWS services they already use. Without an EDP, eligible businesses are subject to the same pricing as everyone else, even if their consumption of AWS would qualify them for a better price. So it’s often worth at least considering an EDP as soon as your AWS spend is large enough to qualify.
The EDP program offers a sliding scale of volume discounts based on the total amount of committed usage, with higher usage levels resulting in deeper discounts. An EDP provides a predictable and consistent discount across almost all cloud services, which is especially important for businesses with complex financial requirements or those that need to closely manage their cash flow.
For example, after acquiring three firms with varying AWS footprints, compliance solution provider COMPLY was facing burgeoning AWS costs. They turned to Mission Cloud for support to unify and consolidate the environments of these investments and create a smooth transition between EDP agreements that would cover this substantially larger AWS footprint. Over the next eight months, Mission Cloud helped COMPLY realize $460,000 in savings while preventing a lapse in EDP coverage.
While there are certainly benefits to using an EDP, it may not be the right choice for every company. For example, companies with highly variable usage patterns or unpredictable growth may not be able to accurately forecast usage over a defined period making committed spending too risky. Additionally, some companies will be at a growth stage where they prefer to manage AWS usage on a more flexible basis rather than making a long-term commitment.
The Challenges of AWS EDP
Navigating the Complexities of AWS EDP
EDP options are meant to help customers maximize their investments in the cloud. Understanding the various discounts and eligibility requirements can be challenging.
Qualifying, negotiating and managing an EDP is a complex process. Companies need to keep track of their AWS usage, commitment progress and pricing to ensure they’re maximizing their cost savings. This can be resource-intensive, and businesses may need to dedicate significant time to effectively understand and manage usage and spend.
Analyzing and Forecasting AWS Spend
AWS usage at a typical enterprise is complex and multi-faceted, with a variety of services and usage patterns across different teams and departments. Businesses need to accurately forecast AWS spend over the duration of their contract to take full advantage of an EDP. Otherwise, they might under- or overcommit on usage — missing out on savings or facing a shortfall payment. Getting this right requires a deep understanding of usage patterns and the various options available through the EDP.
Negotiating an Enterprise Agreement
Negotiating an EDP isn’t like haggling at a car dealership. Instead, the negotiation process focuses on analyzing and forecasting AWS spend and making the right spending and growth commitments to get the greatest value from AWS services.
The relationship between commitment and discount is a step function, not a continuous one, meaning discounts are divided by tiers. If you plan to increase your commitment without reaching the minimum required for the next tier, your increased spend won’t be enough to qualify for an additional discount.
In addition to forecasting demand, companies need to estimate the total cost of ownership of an EDP agreement and measure how it compares with alternative cost-saving options. Keep in mind that an EDP is a legally binding agreement. If you spend less than what you expected, you’ll still be required to fulfill your commitment.
How to Maximize Value From AWS EDP
Negotiating an EDP on your own is difficult and achieving the best possible deal takes considerable effort. While AWS provides resources to help customers understand and manage their cloud environment, many companies aren’t familiar with the intricacies of the various pricing models and discount options. Nor do they always know how to best position themselves in a negotiation with AWS.
Consider the value of partnering with an AWS Premier Tier Services partner, like Mission Cloud, to tailor an EDP to your priorities, needs and constraints. A partner can leverage their experience to save you money, optimize your current spending and help you modernize an environment ahead of a commitment.
Here are three key ways Mission Cloud can help.
Less Spend, More Value
Mission Cloud is a longtime AWS collaborator and a recognized Premier Consulting Partner. We act as allies and advocates for our enterprise customers, building on our relationship with AWS and firsthand experience with thousands of successful projects of all sizes. The end goal is simple: Optimize your cloud spend by finding the best plan for your business, and empower you to execute that plan.
We begin by assessing your short- and long-term use cases for your strategic goals. Then we’ll help you navigate the negotiation process and evaluate options, positioning you to make the strongest possible business case for your current spending, growth and value as a customer.
We often favor short renewal cycles, between one to three years, because longer commitments may increase the risk more than they increase the discount. These shorter cycles also enable us to continually refine your engagement and lower expenses as your usage evolves.
And as part of our work to negotiate your EDP, you’ll automatically receive our Mission Cloud Foundation service, which includes access to experienced cloud analysts and powerful, cloud-native tools, such as CloudHealth and our own software, Mission Control. Our analysts leverage these tools for visibility into your environment and usage, helping to drive cost optimization and help you align to AWS best practices.
Calibrated Plan Selection
Determining the best solution for your business requires optimizing your spend beforehand, making the right tradeoffs between discounts and commitment levels, and accounting for enterprise support. That’s why many businesses seeking an EDP benefit from having a trusted, consultative advisor to explain these differences and the impact on their business.
For example, your business is ready to enroll in an EDP for the first time. The EDP requires 20% growth and offers an 8% discount, your usage will need to grow beyond 20% to hit the growth commitment. The 8% discount applies to all usage, which brings your current spending down, as well. An advisor can help you understand this impact from the beginning, helping you adjust usage accordingly rather than trying to quickly make up the deficit near the end of the term.
Enterprises often have long-term strategies that require flexibility in terms of time and spending commitments. This is why having a partner like Mission Cloud to help you design your commitment is critical to maximizing its value. Undercommitments may yield flexibility but will forfeit cost savings, while overcommitments can trap you in a sub-optimal architecture just to keep your usage growing sufficiently. We help you avoid either of these scenarios by achieving the optimal balance.
Competitive Support Pricing
AWS requires all organizations with an EDP to also sign up for AWS Enterprise Support, which can cost 10% of your monthly AWS charges for the first $150,000 spent (and smaller percentages as spending increases). Organizations that aren’t already on Enterprise Support will need to factor the increased support costs into their EDP.
As a Premier Partner, Mission Cloud offers AWS-approved Enterprise Support through our managed services, including Cloud Foundation, which we offer as a part of every EDP we negotiate. Cloud Foundation provides FinOps and InfraOps support, as well as 24/7 support from our CloudOps team and access to industry-leading tools to identify cost and performance opportunities. Cloud Foundation can help fulfill the enterprise support requirement without taking on the full costs of AWS Enterprise support.
Partnerships with Proven Success
At Mission Cloud, we understand the complexities of cloud management and are committed to supporting our clients every step of the way. As your trusted cloud collaborator, we're here to help you make informed decisions about your AWS EDP agreement and ensure that your technology investment delivers tangible results.
Contact us to learn how our customers have seen up to 20% off their entire AWS bill in just 3 months.