Case Study: AWS Contract Negotiation for a German Online Services Company
Challenge
A leading online services company based in Germany, with over 10,000 employees and operations across Europe, engaged Redress Compliance to renegotiate its AWS agreement. The company’s platform served millions of users daily, relying on AWS for hosting, data analytics, and content delivery. However, the existing agreement presented several challenges:
- Increasing costs due to exponential growth in platform usage and data storage.
- Limited visibility into cloud resource utilization, resulting in inefficiencies.
- Misalignment between AWS services purchased and the company’s operational priorities.
- Rigid contract terms that lacked flexibility for scaling resources based on user demand.
The company sought expert support to optimize its AWS spending and negotiate a contract aligned with its rapid growth trajectory and operational requirements.
The Process
- Usage Assessment and Analysis: • Conducted an in-depth analysis of AWS usage across hosting, content delivery, and analytics services. • Identified overprovisioned EC2 instances and underutilized Reserved Instances. • Evaluated the cost-effectiveness of data storage and transfer services, such as S3 and CloudFront.
- Needs Prioritization: • Worked with product and IT teams to define critical operational requirements. • Highlighted AWS features that delivered value for the platform’s growth versus those with minimal ROI. • Identified opportunities to consolidate services and reduce redundancy.
- Strategic Preparation: • Benchmarked AWS pricing and terms against other online services providers with similar scale and requirements. • Developed a negotiation strategy focused on securing scalable terms and better volume-based discounts. • Proposed a hybrid cost-saving approach using Reserved Instances, Savings Plans, and Spot Instances.
- Negotiation and Contract Revision: • Presented AWS with a comprehensive proposal emphasizing inefficiencies and optimization opportunities. • Secured significant discounts on core services, including compute, storage, and content delivery. • Negotiated a flexible contract structure that allowed the company to scale resources dynamically based on user demand.
- Governance and Implementation: • Established a governance framework to monitor AWS usage and control costs proactively. • Delivered workshops for IT and product teams to manage AWS resources effectively. • Implemented automated tools to optimize costs and track real-time usage.
Results
- Cost Savings: • Reduced annual AWS costs by 27%, saving €4.5 million over three years. • Eliminated €1.2 million in spending on underutilized resources and redundant services.
- Enhanced Contract Flexibility: • Negotiated scalable terms to handle seasonal fluctuations in platform traffic. • Secured pricing protections for future expansions and new feature rollouts.
- Operational Improvements: • Streamlined resource allocation across key services, improving efficiency and performance. • Enhanced visibility into AWS usage, enabling better decision-making and cost control.
Quote from the CTO:
“Redress Compliance’s expertise transformed our AWS strategy. Their support not only delivered substantial cost savings but also ensured our agreement aligns with our platform’s growth and innovation goals. They were an indispensable partner.”
Key Results:
- Savings Achieved: €4.5 million over three years.
- Flexibility Secured: Scalable resources aligned with user demand.
- Operational Efficiency: Improved governance and optimized resource usage.
This case highlights Redress Compliance’s ability to deliver tailored AWS negotiation strategies, ensuring cost efficiency, operational alignment, and scalability for online service providers.
