Contents
Key takeawaysWhat an EDP isWhen the EDP costs more than listWhat we saw, 2024 to 2026Sizing the commitmentMarketplace creditContract termsAccount team linesRenewal timelineWhat to do nextFAQAn AWS EDP discount only pays when the commitment matches what you consume. Size it to your trailing twelve months of billing, route eligible Marketplace spend into it, and write the exit terms before you sign.
- Sizing decides the value. Commitments sized on growth forecasts ran 15 to 25 percent above realized consumption, and once the unused commitment exceeds the discount, the EDP costs more than list.
- Use the trailing file. Commit at or below twelve months of actual consumption by service and account, and let growth be billed as it arrives.
- Check the layer below. Savings Plans inside the EDP need the same trailing file test, because they repeated the overcommitment one layer down.
- Route Marketplace spend. Eligible third party software counts toward the commitment at a negotiated credit rate, so inventory it before you set the number.
- Hold the term at three years. Extra years deepen the rate but stretch the forecast further, so each one has to pay for itself.
- Date every offer. The mix of credits and rate discount changes by quarter, and only the rate lasts the whole term.
- Write the exit at signature. Defined notice and pro rated commitment relief cost little before signing and are hard to win afterward.
What is an AWS EDP, and what does the discount buy you?
An AWS Enterprise Discount Program (EDP) is a firm annual spend commitment over a fixed term, usually three years, in return for a discount on your AWS usage. The discount runs from about 5 percent for smaller commitments to about 20 percent at the top commitment thresholds and longer terms.
The discount does not scale smoothly. It steps up at commitment thresholds, which is why account teams so often suggest committing a little more to reach the next step. You will also see it called a Private Pricing Agreement (PPA), and AWS Marketplace documentation refers to this committed spend as "EDP/PPA".
Who carries the risk in the default contract?
Strip away the branding and the EDP is a trade. AWS buys certainty about your spend and pays for it with a discount. Your job is to decide whether that payment covers what the certainty costs you.
In the default contract, you carry all of the risk. If you consume less than you committed, you pay the difference anyway. If you consume more, AWS bills the extra usage. No outcome puts the gap between commitment and consumption on AWS, so the sizing conversation is where most of the value in the agreement is won or lost.
The parts of an EDP and what to check in each
| Term | How it works | What to check |
|---|---|---|
| Commitment | Firm annual spend across the term | Size it to trailing billing data |
| Discount | Stepped by commitment threshold and term length | Worth nothing once the overcommitment is larger than the discount |
| Credits | Blended into EDP and PPA offers alongside the rate | They sweeten year one without repricing the base, so value them separately |
| Term | Typically three years | Longer terms deepen the rate and extend the forecast risk |
| Marketplace credit | Eligible third party purchases count toward the commitment at a credit rate | Get the rate for each seller in writing and route eligible spend through it |
| Savings Plans beneath | Rate commitments that sit inside the spend commitment | Size them to the same trailing file as the EDP |
| Early termination | Defined notice and pro rated commitment relief, if negotiated | The default structure has no exit worth having |
Why credits and the rate need separate columns
EDP and PPA proposals blend a rate discount with credits, and AWS's appetite for each shifts with its own quarter. Date every proposal and note the quarter it was issued in.
Then compare offers on the rate first. A credit is spent once, while the rate applies to every dollar for the whole term.
Negotiating AWS 2: The Commitment, and the Measurement Rule
When does an AWS EDP cost more than paying list price?
An EDP costs more than list whenever the unused commitment is larger than the discount. Measure the unused commitment as a share of what your usage would cost at list price, and the premium over list is simply the overcommitment minus the discount.
Run the two percentages against each other before you sign anything. A 12 percent discount on a commitment that runs 20 percent above what you will consume is not a saving. It is an 8 percent premium over list, paid under the name of a discount.
A worked example over one contract year
Say your trailing twelve months of AWS usage would cost $10 million at list. The growth plan points higher, and the account team proposes a $10.8 million annual commitment at 12 percent. The alternative is a commitment of $8.5 million, sized below the trailing file, at a lower hypothetical step of 10 percent.
| Scenario | No EDP, pay list | EDP sized to the forecast | EDP sized to the trailing file |
|---|---|---|---|
| Annual commitment | None | $10.8 million | $8.5 million |
| Discount | None | 12 percent | 10 percent |
| Usage stays at $10 million list: you pay | $10.0 million | $10.8 million ($8.8 million of usage plus a $2.0 million shortfall) | $9.0 million, no shortfall |
| Usage grows 20 percent to $12 million list: you pay | $12.0 million | $10.8 million ($10.56 million of usage plus a $0.24 million shortfall) | $10.8 million, no shortfall |
If usage stays flat, the forecast commitment costs $1.8 million more than the trailing file commitment and $0.8 million more than paying list. If the growth arrives in full, the two EDPs cost the same. The bigger commitment only pulls ahead if growth runs above 20 percent, and that is a bet on the forecast you were trying to test.
The example assumes the discount applies to all usage, including usage above the commitment. Check that your agreement says so in plain terms, because that is what allows growth to arrive as uncommitted upside.
AWS EDP Negotiation Guide
How to size the commitment, test the discount and write the exit terms, with a renewal timeline.
Get the white paper →What have we seen in AWS EDP reviews from 2024 to 2026?
Most of the lost value came from overcommitment. Across the EDP and Savings Plan reviews we ran, commitments sized on the forward growth forecast came in 15 to 25 percent above realized consumption. One layer down, Compute Savings Plans were over committed by 14 to 28 percent against trailing twelve month compute consumption on most of the accounts we reviewed.
Three patterns came up again and again:
- Commitments set in the planning meeting. The number was copied from the growth plan, with the seller's optimism and the buyer's ambition both built in, and the billing data was never consulted.
- Marketplace credit left on the table. Credit rates were never negotiated and third party purchases were never routed through AWS Marketplace, so existing spend filled none of the commitment.
- No exit clause. When the forecast met reality, the overcommitment had no relief of any kind.
The forecasts were not dishonest. Growth plans are written to be ambitious, which is their job. The trailing twelve month billing file is the one number in the negotiation that no one in the room has a reason to inflate. For the same forecast pattern across all three hyperscalers, see our AWS overspending report.
Why we advise against stretching for the next discount tier
The common advice is to commit as high as you can justify, because the discount steps up at each threshold. We disagree. A step is worth a few points, and the overcommitment we see is usually larger. Commit at or below trailing consumption, negotiate the rate on that figure, and accept the lower step if that is where it lands.
How should you size an AWS EDP commitment?
Size it to your trailing twelve months of consumption, by service and by account, and commit at or below that figure. Real growth will still be billed, and it is cheaper to pay for it when it arrives than to prepay a forecast.
How to build the trailing twelve month file
- AWS Cost Explorer. Pull 12 months at monthly granularity, grouped by service and by linked account, so you can see which workloads are growing and which are flat.
- AWS Data Exports. The Cost and Usage Report line items show net cost after discounts and credits, which is what your finance team will reconcile against the commitment.
- Savings Plans reports in Cost Explorer. The usage report on each plan shows how much of the commitment you actually consume. Coverage shows how much eligible usage still runs at On Demand rates.
- One time items. Strip out migration double running, promotional credits and project spikes that will not recur.
- Marketplace invoices. List every third party subscription you already buy, through AWS Marketplace or elsewhere.
The Savings Plans layer under the EDP
Savings Plans are rate commitments for one or three years inside your spend commitment. EC2 Instance Savings Plans save up to 72 percent against On Demand rates and Compute Savings Plans up to 66 percent, so the pull to buy more is strong. Our Savings Plans and Reserved Instances guide covers the choice between them.
The purchase recommendations in Cost Explorer look back over 7, 30 or 60 days, which is too short to size a three year commitment and can mistake a seasonal peak for a baseline. Size Savings Plans from the same trailing twelve month file as the EDP, or you stack one overcommitment inside another.
First EDP or renewal
On a first EDP, you often sign while workloads are still migrating, so the trailing file understates next year. Commit to what has already moved and ask for a ramp that rises as later waves go live.
At renewal you hold three years of billing history, and so does AWS, which makes the trailing file hard to argue with. Our shortfall risk guide works through ramp shapes in detail.
How does AWS Marketplace spend count toward an EDP?
Eligible purchases count toward the commitment at a credit rate, typically 50 percent for general Marketplace transactions and 100 percent for specific strategic partners. Marketplace is the flexible part of the commitment, because it turns software you already buy into commitment retirement.
AWS decides eligibility product by product, and products deployed on AWS typically qualify. Since May 1, 2025, the catalog also takes SaaS hosted elsewhere, and only listings 100 percent deployed on AWS carry the "Deployed on AWS" badge and keep counting toward customer benefits. Treat an unbadged listing as uncounted until the account team confirms it in writing.
A worked example of Marketplace routing
Say you already spend $1.5 million a year on third party software. Of that, $1.0 million sits with strategic partners credited at 100 percent, and $0.5 million with general sellers at 50 percent. Routed through Marketplace, that spend retires $1.25 million of commitment a year, which closes well over half of the $2.0 million shortfall in the earlier example.
This turns part of the commitment from a bet on infrastructure growth into a routing decision about spend that already exists, which is a far safer thing to promise. More detail sits in our guide to Marketplace and the EDP.
Which AWS EDP contract terms should you negotiate before signing?
Negotiate the exit, the term length and the Marketplace credit rates at signature, while AWS still wants the deal closed. After signature, the default terms apply and AWS has no reason to change them.
An EDP with defined notice and pro rated relief is an agreement you can afford to be wrong about. The default EDP is not.
Contract wording to ask for
- Early termination. A defined notice period and commitment relief pro rated to the months left in the term, with the triggering events listed in the clause itself.
- Discount on all usage. Written confirmation that the rate covers usage above the commitment, so growth is never billed at list.
- Marketplace credit rates by seller. The general rate and the strategic partner rate stated in the agreement, plus the list of sellers that qualify.
- Ramp. Annual commitments that start lower in year one and rise with your migration plan.
- Shortfall treatment. A right to carry an unused amount into the next year before AWS invoices it.
- Proposal validity. An issue date and an expiry date on every offer, so you can compare credit and rate mixes quarter by quarter.
Our notes on EDP flexibility provisions and on termination and off ramp clauses cover these clauses in more detail.
How long should the term be?
Three years is the balance point between discount depth and flexibility. Each extra committed year deepens the rate but extends the least reliable number in the agreement, the forecast. Take a longer term only where the added discount outweighs that risk. For current step points, see our EDP discount tiers page.
What will the AWS account team say, and how should you reply?
Expect the conversation to push the commitment up and the protections out. These are the lines we hear most often, with the replies we recommend.
- "Your growth plan gets you to the next tier." Reply: "Show us the rate at our trailing twelve month level. Growth above that is billed anyway."
- "This credit package is only available this quarter." Reply: "We will value the credits separately. Put the rate on paper with an issue date, and we will compare it with next quarter's offer."
- "Early termination is not part of a standard EDP." Reply: "Then we sign a smaller commitment. Notice and pro rated relief are the price of the size you want."
- "Marketplace spend counts automatically, you do not need it in the contract." Reply: "Then writing the credit rates and the seller list into the agreement costs you nothing."
When should you start preparing an AWS EDP renewal?
Start 12 months before the renewal date. Renewal is when the commitment resets, the credit rates open up and the exit clauses can be written in, and each of those needs the billing data ready first.
| Before renewal | What to do |
|---|---|
| 12 months | Build the trailing twelve month file by service and account. Check the current shortfall or surplus against the commitment. |
| 6 months | Inventory third party software spend and check which sellers are eligible. Set the target commitment from the trailing file. |
| 3 months | Request dated proposals. Compare rate and credits separately. Table the exit, ramp and Marketplace terms. |
| 1 month | Check the final text for the early termination clause, the discount on all usage and the seller credit rates. Size Savings Plans purchases to the new commitment. |
If renewal is less than 12 months away, our EDP renewal strategy covers shorter timelines.
What to do next
- Build the trailing file first. Pull 12 months of consumption by service and by account. Every other step depends on it.
- Set the commitment at or below trailing consumption. Let real growth arrive as uncommitted upside, billed as it happens.
- Inventory your third party software spend. Negotiate the Marketplace credit rates that let it fill part of the commitment.
- Price the term. Take extra years only where the added discount is larger than the forecast risk they bring.
- Write the exit at signature. Ask for defined notice and pro rated relief, and put the next renewal cycle in the calendar as the point where every term reopens.
- Get a second pair of eyes. Our AWS advisory team runs the sizing and the negotiation with you, and the AWS knowledge hub holds the rest of our AWS research.
Frequently asked questions
What discount does an AWS EDP deliver?
Typically about 5 percent for smaller commitments, rising to about 20 percent at the top thresholds and on longer terms. The rate rises in steps rather than along a smooth curve. Offers also blend in credits, so judge each proposal on the rate over the full term before you look at the year one credits.
How should an AWS EDP commitment be sized?
Start from your last twelve months of actual consumption and commit at or below it, whatever the growth plan says. Apply the same test to Savings Plans: on most accounts we reviewed they were over committed by 14 to 28 percent against trailing compute use. An unconsumed commitment is spend that no discount recovers.
Do AWS Marketplace purchases count toward an EDP commitment?
Yes, if the product is eligible. General Marketplace transactions typically count at 50 percent and specific strategic partners at 100 percent. Check this before you set the commitment, because routed third party spend can close a shortfall without any new AWS usage.
What is the right AWS EDP term length?
Typically three years, which balances discount depth against flexibility. A five year term can bring a deeper rate, but it asks you to forecast consumption well past your current architecture plans, and the forecast is already the weakest number in the agreement.
Can an AWS EDP be terminated early?
Only on the terms you negotiated at signature, such as a defined notice period and pro rated commitment relief under the early termination clause. Without that clause, a divestiture or a workload moving off AWS leaves you paying the full commitment for the rest of the term.
Is the default AWS EDP structure buyer friendly?
No. The default structure favors AWS: the commitment is firm, consumption is uncertain, and the discount is the only compensation. Honest sizing, negotiated Marketplace credit and an exit clause are what keep your flexibility without giving up the rate.
When is the best time to negotiate an AWS EDP?
At renewal, with a trailing consumption file in hand, because the commitment resets and the credit rates and exit clauses are open again. Start about 12 months out so the billing data, the Marketplace inventory and your target commitment are ready before the first proposal arrives.