An Expert Guide to the AWS Enterprise Discount Program

Cloud computing has become an essential component for many businesses today. As such, the need for robust, cost-effective cloud computing solutions has become increasingly important. Amazon Web Services (AWS) is a leading cloud computing software provider offering a range of services and products designed to help businesses scale operations and grow. 

One of AWS’s offerings is the Enterprise Discount Program (EDP) or Private Pricing Agreement (PPA), which provides significant cost savings for businesses that decide to commit to a long-term agreement with AWS. Vendr, a leading SaaS procurement platform, can help businesses streamline the procurement process and save big on their AWS EDP agreement. 

To help those interested in joining the program. we’ve collected negotiation strategies and tips for maximizing cost savings and achieving the best possible deal on AWS EDP:  

• What is AWS EDP?
• Who is eligible for AWS EDP?
• Potential risks to consider. 
• Discount levers to get a better deal with AWS EDP. 
• 3 negotiation strategies to save on AWS ED. 
• AWS EDP FAQs. 

What is AWS EDP?

The Amazon Web Services Enterprise Discount Program, or AWS EDP, is a pricing agreement that can help businesses save money on their AWS cloud expenditures by committing to a long-term service agreement. Typically, AWS EDP agreements last one to three years, providing eligible businesses with significant discounts on AWS usage. 

Who is eligible for AWS EDP?

To qualify for AWS EDP, businesses must meet the following eligibility requirements:

• AWS spending: Standard eligibility for AWS EDP is based on a customer’s historical or projected spending with a minimal threshold of $500,000 annually. 
• Accurate forecasting: Prospective businesses must be able to accurately forecast their cloud spend and usage, which form the basis of the EDP agreement. 
• Cost optimization: It's a good idea for businesses to properly cost-optimize their cloud spend to ensure that the service agreement commitment is suitable for their business needs. 
• Commitment to a long-term service agreement: Businesses interested in the AWS EDP program must commit to a one- to five-year service agreement with AWS, including a minimum annual spend commitment and commitment.
• Commitment to growth: The customer must commit to 20% growth from the trailing 6 months spend in the first year.

Potential risks to consider 

For businesses that qualify for AWS EDP, here are some potential risks to consider before making a decision: 

• Overcommitting: Organizations that lack the proper forecasting abilities may accidentally commit to using a higher level of AWS than they need or can use. This can result in a high degree of wasted resources and costs. 
• Limited flexibility: Committing to a certain level of AWS usage over a period of one to five years, per an organization’s specific EDP agreement, can limit the company’s ability to adjust its cloud services usage in response to changing business needs. 
• Lock-in: Being locked into a multi-year usage commitment with AWS EDP may potentially hinder a company’s ability to take advantage of new, emerging technologies that are more suited to its needs than AWS. 
• Complexity: EDP isn’t a simple pricing plan. The complexity of AWS EDP requires careful, thoughtful analysis and planning to ensure your organization is receiving the best possible deal. Software procurement specialists like Vendr can help businesses get the best available pricing for their requirements. 
• Pricing changes: AWS reserves the right to change the terms of the EDP commitment at any time, including pricing and discount levels. For organizations committed to a certain level of usage, as required with AWS EDP agreements, this is a potential risk that may result in unexpected costs. 

Discount levers to get a better deal with AWS EDP from SaaS negotiation experts 

When negotiating an AWS EDP agreement, businesses can get a better deal by leveraging several key discount levers, including:

Longer agreements and step-up commitments

As you might imagine, AWS is often willing to give bigger discounts for agreements that are longer than the typical minimum. Step-up EDP commitments also allow businesses to extend their agreement before a contract has ended, potentially leading to additional discounts on services. 

Leveraging competition

It’s never a bad idea to let a service provider know your organization is considering its competitors. Mentioning other cloud providers you’re considering may help negotiate more favorable rates for AWS services and EDP agreements. 

Expected growth 

If your organization is projected to experience rapid growth in the coming years, you may want to lean into the economies of scale tied to this expected growth. Make it known that future agreements with AWS will likely be even larger. 

3 negotiation strategies Vendr has used to help companies save on AWS EDP 

Some negotiation strategies Vendr has successfully implemented to help companies get a better deal on AWS EDP include: 

Optimizing the amount committed around pricing breaks 

When negotiating an AWS EDP agreement, businesses need to carefully consider the amount they’re committing to and their usage patterns, as these can significantly impact the discounts they are eligible to receive. Vendr has unique historical data and pricing insights to help inform this analysis. 

By optimizing the dollar amount committed and considering the pricing bands where price breaks occur, businesses can potentially save thousands of dollars annually. For example, sometimes committing to an extra $100K in an annual contract can add another percentage point to an organization’s discount. 

Negotiating support

Vendr has helped its customers negotiate better discounts on AWS costs by helping them negotiate support service pricing. It may initially appear that this is non-negotiable and that the default is for support discounts to be the same as the cross-service discount or EDP discount rates. However, it’s possible to make a compelling argument by using low-volume support ticket data to show that the amount you use support services is not worth the cost. Vendr recently saved a customer $260K on a $3M annual contract using this strategy. 

Setting expectations on negotiating rounds 

Setting expectations on how many rounds and how long it should take to negotiate is another tip for getting a better deal on AWS EDP agreements. If every round takes several weeks and you want to go through multiple rounds of negotiations, the prospect of such a drawn-out timeline can help you get improvements from the standard discounts because the other team may be eager to move on to another deal. 

Streamline procurement and save on SaaS with Vendr 

Vendr is a leading software procurement provider specializing in B2B SaaS that helps businesses streamline the procurement process and save money on their software spend. Businesses that choose to leverage Vendr’s expertise and robust catalog of data on SaaS products and services — including AWS EDP — often see significant cost savings. 

AWS EDP FAQs 

What is the minimum spend to qualify for AWS EDP?

Most EDP agreements require a minimum annual commitment of at least $500,000 and are available to enterprise cloud users with a demonstrated history of significant cloud usage and spending. 

What is the difference between an Amazon Private Pricing Agreement (PPA) and an EDP?

Previously, EDP was the only contractual way to get a cross-service discount and the PPA provided service-specific discounts as an addendum to the EDP contract. Today, these terms are functionally equivalent for customers. 

Does AWS marketplace spend count towards EDP?

Yes, AWS Marketplace spending counts towards your EDP commitment, thought sometimes there are limitations on what percent of your commitment can come from the Marketplace alone. This will only yield discounts if it's used to inflate your commitment which comes with its own risk.