In today’s business environment, the cloud plays an increasingly vital role in your organization’s operations, often serving as a cornerstone of your growth strategy. While cloud services enable agile scaling and efficiency, expanding operations can lead to escalating cloud expenses. Managing these costs becomes crucial to avoid overspending, prompting many Amazon Web Services (AWS) users to explore the AWS Enterprise Discount Program (EDP).

The AWS EDP presents an opportunity to secure discounted rates, effectively mitigating costs, especially when organizations grasp the associated risks and complexities. Despite requiring a significant commitment, companies heavily invested in AWS can reap substantial benefits from this program.

Explore how the AWS EDP functions, the advantages it provides your organization, and how to navigate your EDP journey effectively.

What Is EDP?

The AWS Enterprise Discount Program (EDP), introduced by Amazon in 2012, is tailored for eligible customers with substantial annual AWS expenditures, typically exceeding $1 million. This program offers discounted rates based on your annual commitment and its projected growth trajectory, demonstrating your dedication to AWS and your business’s future success. These discounts apply to nearly all AWS services.

It’s important to note that participation in AWS EDP requires a commitment ranging from one to five years. Opting for a longer commitment period, coupled with a focus on consumption and growth, carries the risk of potential shortfall without careful planning and management. For example, relying solely on historical usage data for forecasting may overlook unrelated cost-saving opportunities, potentially leading to overcommitment in an EDP. At Renova Cloud, we prioritize advising customers on infrastructure optimization and modernization to address inefficiencies upfront, recognizing that EDP discounts on inefficient spending offer diminished value.

To explore potential cost-saving opportunities for your business, start a cost optimization assessment with our Experts.

Find more: AWS Well-Architected Review

Why consider AWS EDP?

The primary advantage of AWS EDP is its ability to help businesses achieve significant cost savings on the AWS services they already utilize. Without EDP, eligible businesses are subject to standard pricing, potentially missing out on more favorable rates based on their AWS consumption. Therefore, exploring EDP becomes worthwhile as your AWS spending reaches a substantial threshold.

The EDP program offers a tiered system of volume discounts based on total committed usage, with higher levels of usage resulting in deeper discounts. This ensures a predictable and consistent discount across a wide range of cloud services, which is particularly beneficial for businesses with complex financial requirements or those needing careful cash flow management.

While there are undeniable benefits to adopting an EDP, it may not be suitable for every company. Businesses with highly variable usage patterns or unpredictable growth trajectories may struggle to accurately forecast usage over a defined period, making committed spending too risky. Additionally, some companies in a growth phase may prefer more flexible AWS usage management over long-term commitments.

Navigating the Complexity of AWS EDP

Unraveling the Complexity of AWS EDP

While AWS EDP options aim to enhance customers’ cloud investments, understanding the various discounts and eligibility criteria can be challenging.

Qualifying for, negotiating, and managing an EDP involves a multifaceted process. Companies need to monitor their AWS usage, commitment progress, and pricing meticulously to ensure optimal cost efficiency. This can be resource-intensive, requiring significant time investment to fully comprehend and oversee usage and expenditure.

Analyzing and Predicting AWS Expenditure

AWS usage within an enterprise is diverse and complex, spanning various services and usage patterns across different teams and departments. Accurately forecasting AWS spending throughout the contract duration is crucial for maximizing the benefits of an EDP. Otherwise, organizations risk under- or overcommitting on usage, missing out on potential savings, or facing shortfall payments. Achieving accuracy in this area requires a deep understanding of usage trends and the myriad options available through the EDP.

Negotiating an Enterprise Agreement

Negotiating an EDP goes beyond simple bargaining; it involves analyzing and projecting AWS spending and strategically aligning spending and growth commitments to maximize the value of AWS services.

The relationship between commitment and discount follows a step function, not a continuous one, with discounts divided into tiers. If an organization seeks to increase its commitment without meeting the minimum threshold for the next tier, the increased expenditure may not qualify for an additional discount.

In addition to forecasting demand, companies must estimate the total cost of ownership of an EDP agreement and assess how it compares with alternative cost-saving measures. It’s crucial to understand that an EDP is a legally binding agreement; thus, even if actual spending falls short of projections, the commitment must still be fulfilled.

Maximizing AWS EDP Value

Securing an EDP deal independently requires significant effort, as navigating pricing models and discount structures can be complex. Many organizations lack familiarity with these nuances and may struggle in negotiations with AWS.

Collaborating with an AWS Advanced Tier Services partner like Renova Cloud can streamline the process. With our expertise, we can customize an EDP to align with your priorities, requirements, and constraints. Our partnership can help optimize costs, refine spending patterns, and modernize your environment in preparation for a commitment.

Discover how Renova Cloud can assist you in three key areas:

Tailored Plan Selection

Choosing the right plan for your business requires careful consideration of spending, discounts, commitment levels, and enterprise support. Many businesses find value in having a trusted advisor to navigate these complexities and their impact on operations.

For example, if your business is considering an EDP for the first time with a 20% growth requirement and 8% discount, an advisor can guide you through adjusting usage to meet growth commitments and maximize savings.

Long-term strategies often require flexibility in time and spending commitments. Partnering with Renova Cloud can help you design your commitment to maximize its value and strike the optimal balance between flexibility and cost savings.

Competitive Support Pricing 

AWS requires all EDP organizations to subscribe to AWS Enterprise Support, typically 10% of monthly AWS expenditures for the initial $150,000 spent (with decreasing percentages for higher spending). Organizations not enrolled must consider additional support expenses in EDP planning.

As an Advanced Partner, Renova Cloud provides AWS-approved Enterprise Support through our managed services, included in every EDP negotiation. Our Cloud Foundation offering delivers FinOps and InfraOps support, round-the-clock assistance from our CloudOps team, and access to advanced tools for cost and performance optimization, satisfying enterprise support requirements without full AWS Enterprise costs.

Successful Partnership

At Renova Cloud, we understand cloud management intricacies and as your reliable cloud ally, we stand ready to assist you in making well-informed choices regarding your AWS EDP agreement, ensuring that your technological investments yield concrete outcomes.

Contact us to learn how our clients have achieved savings of up to 20% on their entire AWS bill within just 3 months.