Contents
Key takeawaysThe five instrumentsWhy 15 percent lands at 11Comparing offers and benchmarksWhat we have seenWhat the account team will sayContract terms to ask forHow bill size changes itChecking your own numbersWhat to do nextFAQEvery instrument in an AWS agreement is quoted as a percentage, and no two apply to the same base. Negotiate against the effective rate across your whole bill, after support is added and each discount sits on its own base.
- The headline overstates the rate. A 15 percent headline routinely lands at an 11 percent effective rate once each instrument is applied to its own base.
- Five instruments, five bases. The EDP discount, service rates, Savings Plans, support and Marketplace credit measure different things and cannot be summed.
- Support runs the other way. Enterprise Support takes up to 10 percent of monthly charges, calculated on gross spend before any discount.
- Covered compute is its own number. A Savings Plans rate describes a covered workload and should never be compared with a whole bill average.
- Marketplace is insurance. It retires commitment dollar for dollar on spend you would make anyway, so it belongs in shortfall planning and out of the savings line.
- Get the bases in writing. Ask for each discount in dollars on a defined set of charges, and model the effective rate before approvers see a number.
What does an AWS contract negotiation cover?
An AWS enterprise agreement combines five pricing instruments. Each is quoted as a percentage, each applies to a different base, and only one of them adds to your bill instead of reducing it.
That is why the percentages cannot be added together. The table shows how far each instrument reaches and what it is calculated on.
| Instrument | Range | Applies to | Effect on the bill |
|---|---|---|---|
| EDP commitment discount | 5 to 20 percent | Eligible charges across the commitment, stepped by threshold | Reduces it |
| Service specific private pricing (PPA) | 5 to 40 percent | Named service lines only | Reduces it |
| Savings Plans and Reserved Instances | Up to 72 percent | Covered compute usage only | Reduces it |
| Enterprise Support | Up to 10 percent | Gross monthly charges, before discounts | Adds to it |
| Marketplace drawdown | 100 percent credit | Progress against the commitment | Changes no price |
EDP: the commitment discount
The Enterprise Discount Program gives a percentage off eligible charges in return for a committed annual spend. The percentage steps up as the commitment crosses each threshold. A figure quoted above 20 percent is either a different instrument or a percentage of a different base.
AWS does not publish the thresholds, so every step is negotiated. Ramps, shortfall terms and commitment sizing are covered in our EDP guide.
PPA: rates on named services
Service specific private rates reach 5 to 40 percent, but each applies only to the service line written into the agreement. A hypothetical 30 percent rate on one database service tells you nothing about storage, data transfer or compute, so it cannot be added to the EDP percentage.
AWS's own Marketplace documentation refers to committed spend as "EDP/PPA", so confirm which discount a quoted PPA figure means before you model it. Our PPA guide explains how service rates sit inside the wider agreement.
Savings Plans and Reserved Instances: covered compute only
Savings Plans and Reserved Instances reach up to 72 percent below on demand prices, on one or three year terms. AWS quotes that ceiling for EC2 Instance Savings Plans and Reserved Instances. Compute Savings Plans top out at 66 percent and Database Savings Plans at 35 percent.
The rate is real, and it describes a covered workload. It says nothing about the managed services, storage and transfer charges around that workload. Our Savings Plans and Reserved Instances comparison covers which commitment fits which usage.
Enterprise Support: the instrument that adds cost
Enterprise Support is billed monthly as a share of charges: 10 percent of the first $150,000, 7 percent from $150,000 to $500,000, 5 percent from $500,000 to $1 million, and 3 percent above that. A $5,000 monthly minimum applies, cut from $15,000 in December 2025.
AWS calculates the fee on gross charges, before any discounts or credits. The published fee therefore ignores your EDP discount entirely. AWS ends Enterprise On-Ramp on January 1, 2027, and is moving those customers to Enterprise Support at renewal or in batches through 2026. Plan detail is in our Enterprise Support pricing guide.
Marketplace: commitment credit without a price cut
Eligible AWS Marketplace purchases burn down your EDP commitment at 100 percent credit, so a $1 software invoice retires $1 of commitment. AWS decides eligibility product by product, and products deployed on AWS typically qualify. Marketplace charges are also excluded from the Enterprise Support fee base.
Why does a 15 percent AWS discount land at 11 percent?
A 15 percent headline lands near 11 percent because it applies to one base while the invoice covers everything. The discount reaches only the charges your agreement defines as eligible, and Enterprise Support is added on the gross bill. Divide the dollars saved by the whole bill and the rate falls.
The example below uses one hypothetical month. Say gross AWS charges are $400,000 and the agreement's definition of eligible charges covers $320,000 of them.
| Line | Amount | How it is calculated |
|---|---|---|
| Gross AWS charges | $400,000 | Usage at rates before the EDP discount |
| Charges eligible for the discount | $320,000 | Set by the agreement's definition (80 percent here) |
| EDP discount at 15 percent | $48,000 saved | 15 percent of $320,000 |
| Enterprise Support fee | $32,500 | 10 percent of $150,000 plus 7 percent of $250,000, on gross charges |
| Bill before the discount | $432,500 | Gross charges plus support |
| Bill after the discount | $384,500 | $432,500 less $48,000 |
| Effective rate | 11.1 percent | $48,000 divided by $432,500 |
A finance team that read "15 percent" expected about $60,000 off a $400,000 month. The invoice shows $48,000 off and a $32,500 support line. The negotiation delivered exactly what was signed; the headline simply described a narrower base than the bill.
Four instruments reduce what you pay, and support adds to it. It is also the only one calculated on total gross spend. A model that sums the discounts without subtracting support produces a number the invoice will never match.
What Marketplace does to the same month
Add $50,000 of third party software bought through Marketplace. Commitment progress rises by $50,000, which protects you against shortfall. The discount does not change, so the effective rate on the $482,500 total falls to about 10 percent, even though nothing about the deal got worse.
AWS EDP negotiation guide
How to size the commitment, read the discount steps and use Marketplace credit before you sign.
Get the white paper →How should you compare AWS offers and benchmarks?
Compare offers on the effective rate across your whole AWS bill, with each instrument kept on its own base. That is the only figure the invoice will reflect, and the only one that makes two offers comparable.
The covered compute comparison error
The most frequent benchmarking error mixes a Savings Plans rate with a whole bill average. A buyer who sets their overall average against a peer's covered compute rate concludes they are being badly treated when they are not. A buyer who quotes their own covered rate as a bill wide figure concludes the opposite.
Both compare percentages calculated on different bases. Before you use any benchmark, including ours, ask which base the percentage was calculated on. Commitment discounts by tier are in our EDP discount benchmarks.
Why we do not book Marketplace drawdown as a saving
The usual advice is to route as much third party software as possible through Marketplace and report the drawdown as savings. We agree with the routing and disagree with the reporting, which is the most common modeling error we see in AWS business cases. Software you already buy becomes commitment progress, and the money leaves the business either way.
Counting it as a saving double counts it. Book it as shortfall insurance inside the commitment sizing model, where it is worth a great deal if AWS usage grows slower than planned. Our Marketplace procurement guide covers which purchases to route.
What have we seen in AWS negotiations in 2024 and 2025?
In the AWS agreements we advised on in 2024 to 2025, the gap between headline and invoice usually traced back to how the deal was modeled. Four patterns recurred.
- Headline versus effective rate. A negotiated 15 percent routinely became an 11 percent effective rate once each instrument sat on its own base and support was subtracted from the whole bill.
- Marketplace booked as savings. Business cases listed commitment credit as a price reduction.
- Mismatched benchmarks. Covered compute rates were compared with whole bill averages, in both directions.
- Disappointed approvers. Finance leaders who signed off on a headline later read a lower number on the invoice.
A well negotiated AWS agreement can still disappoint the people who approved it, if the business case was built on the headline.
Modeling the effective rate before signature closes that gap. Approvers then sign off on the number the first invoice will show.
What will the AWS account team say, and how should you answer?
Expect the account team to present each instrument in its most favorable percentage. Every line below is accurate as far as it goes, and each reply turns the discussion to dollars on a defined base.
- "The next commitment tier gets you to 15 percent." Ask for the discount in dollars against your forecast of eligible charges, and for the definition of eligible charges in writing.
- "Your committed compute already runs far below on demand." Ask what share of total spend that covered compute represents. Your Savings Plans coverage report answers it.
- "Route your software vendors through Marketplace and it all counts." Agree that it helps with shortfall, then ask AWS to confirm eligibility for each named product before you size the commitment on it.
- "Support is standard pricing and sits outside the commercial deal." Point out that it runs on gross charges and belongs in your total AWS cost. Ask for it to be priced inside the agreement.
Which AWS contract terms protect the effective rate?
The terms that protect the effective rate are the ones that fix each base. Ask for them in the signed agreement, because a percentage on a slide can be applied to a smaller base later.
- A definition of eligible charges. The services and charge types the EDP percentage applies to, so the base behind the headline cannot shrink.
- Written treatment of the support fee. The published fee runs on gross charges, so any relief has to be in the private terms.
- Marketplace eligibility by product. Named products confirmed as counting toward the commitment, with any cap stated.
- Service rates with their own terms. Each PPA rate listed with its service, rate and duration, plus how it interacts with the EDP percentage on the same charges.
- Shortfall handling. What you owe if spend falls short, so Marketplace drawdown and ramps are sized against a known consequence. See our shortfall guide.
Our private pricing clause redlines give suggested wording for each of these.
How does the effective rate change with the size of your AWS bill?
Support weighs most on smaller bills, because the fee bands fall as spend rises. At $100,000 a month, support adds a full 10 percent; at $5 million a month it blends to under 4 percent. Below $50,000 a month the $5,000 minimum applies, and the fee exceeds 10 percent of charges.
| Gross monthly charges | Monthly support fee | Fee as share of charges |
|---|---|---|
| $100,000 | $10,000 | 10.0 percent |
| $400,000 | $32,500 | 8.1 percent |
| $750,000 | $52,000 | 6.9 percent |
| $2,000,000 | $94,500 | 4.7 percent |
| $5,000,000 | $184,500 | 3.7 percent |
Mid sized and large accounts
At $400,000 a month, support pulls the effective rate in the worked example down by about one point, from 12 percent to 11.1. The other three points come from the eligible charge definition. On a $5 million month the support effect shrinks, so the definition of eligible charges decides almost all of the gap.
How do you check your own AWS numbers before negotiating?
Build the effective rate model from your own billing data before the first commercial meeting. Everything you need is in the AWS billing console.
- Cost Explorer. Group by service and by charge type to separate usage, Savings Plans fees, support and credits. The amortized view spreads upfront payments across the months they cover.
- Savings Plans coverage report. Coverage shows the share of eligible compute running at committed rates, which is the base the Savings Plans rate applies to.
- Reserved Instance coverage report. The same view for Reserved Instances, by instance family and Region.
- Cost and Usage Report. Export it through Data Exports for line item detail, including the discount and credit lines your current agreement already applies.
- Marketplace billing. List Marketplace charges by product to see what already retires commitment and what could.
Put each total next to the instrument it belongs to. The AWS knowledge hub has guides on each report and instrument.
What to do next
- Build one model of the whole bill. Attach every instrument to the base it applies to, using your own Cost Explorer and coverage data.
- Subtract Enterprise Support from total spend. Calculate it on gross charges with the published bands and show it in the discount calculation.
- Separate covered compute from everything else. Keep the Savings Plans rate out of the whole bill average.
- Reclassify Marketplace as shortfall protection. Move it from the savings line into the commitment sizing model.
- Ask for dollars on defined bases. Get the eligible charge definition, the support treatment and Marketplace eligibility in writing.
- Negotiate against the effective rate. Put that figure in the business case your approvers sign. The AWS practice builds the model with you.
Frequently asked questions
Why does a 15 percent AWS discount end up at 11 percent?
Because the headline covers one base while the invoice covers the whole bill, and Enterprise Support adds a fee on gross charges. The gap is predictable. Model it before signature and give approvers the effective rate, so the invoice confirms the business case.
What is the actual AWS EDP discount range?
5 to 20 percent, stepped by commitment threshold. A figure above that is either another instrument or a percentage of a different base. AWS does not publish the thresholds, so ask where your forecast sits relative to the next step before deciding whether a larger commitment is worth it.
What discount does an AWS PPA reach?
Service specific private rates reach 5 to 40 percent on the named service lines only. Check each rate's duration as well as its size. A service rate that expires partway through the term changes your effective rate for the remaining years.
Are AWS Savings Plans really up to 72 percent off?
Yes, as a ceiling on covered compute. AWS's own averages are lower: it quotes Standard Reserved Instances at about 40 percent for one year and 60 percent for three years. Model savings from your own coverage data.
What is the most common AWS discount comparison error?
Setting a whole bill average against someone else's covered compute rate, or presenting your own covered rate as a bill wide figure. The first makes a fair deal look poor and the second makes a weak one look strong.
How should AWS Marketplace spend be treated in the deal?
As shortfall insurance. Eligible purchases retire commitment in full, which protects you if AWS usage grows slowly. Because that software spend would happen anyway, it lowers no price, and adding it to the savings line counts the same money twice.
Why does Enterprise Support matter so much in AWS negotiations?
It is the only instrument that increases the bill, and it is charged on total gross spend. It is also changing: the minimum fell to $5,000 a month, and AWS is moving Enterprise On-Ramp customers to Enterprise Support through 2026, so recheck the fee before you renew.
Can AWS discounts be added together?
No. Each applies to a different set of charges. The workable method is line by line: apply each instrument only to the charges it covers, total the dollars, add support, and divide the savings by the whole bill.
What number should we negotiate against with AWS?
The effective rate across the whole bill, expressed as dollars per year over the term. It is the only figure that matches the invoice. It also allows you to compare an offer with a higher headline on a narrow base against a lower headline on a wide one.
Can a well negotiated AWS agreement still disappoint?
Yes, when the business case quoted the headline. Finance then sees a lower saving on the invoice and assumes the deal underperformed. Put the effective rate, the support fee and the eligible charge definition in the approval paper, so the first invoice can be reconciled line by line.