Case Study: AWS Contract Negotiation for a Global Technology Company
Challenge
A global technology company with over 15,000 employees and operations across multiple regions engaged Redress Compliance to assist in renegotiating its AWS agreement. The company relied heavily on AWS for its cloud infrastructure, supporting various applications, from development and testing environments to mission-critical workloads for its clients. However, the existing agreement posed significant challenges:
- Rapidly escalating costs due to increased consumption across multiple business units.
- Lack of transparency in usage patterns, leading to inefficiencies and over-provisioning.
- Limited flexibility in the existing agreement to adapt to evolving business needs.
- Difficulty accessing competitive pricing and additional value through enterprise-level commitments.
The company needed expert guidance to optimize its AWS investment, reduce costs, and secure favorable terms for future scalability.
The Process
- Usage Analysis: • Conducted a detailed analysis of AWS usage across all departments and business units. • Identified overprovisioned resources, unused services, and opportunities for cost optimization. • Mapped out key growth areas and identified services critical for upcoming business initiatives.
- Cost Optimization Recommendations: • Proposed rightsizing instances, transitioning workloads to more cost-effective AWS services, and utilizing Reserved Instances (RIs) and Savings Plans. • Suggested retiring unused resources and consolidating fragmented deployments. • Recommended adopting automated tools to monitor and optimize cloud spending in real time.
- Benchmarking: • Compared the company’s AWS costs and terms against similar technology organizations. • Highlighted discrepancies in pricing and terms and identified opportunities for improved discounts and service offerings.
- Negotiation Strategy Development: • Developed a data-driven strategy focused on achieving deeper discounts, increased flexibility, and additional value through enterprise-level commitments. • Set clear objectives for pricing protections, spending commitments, and access to new AWS services.
- Negotiation and Contract Realignment: • Engaged with AWS account representatives to present findings and advocate for improved pricing and terms. • Secured enhanced discounts on key services, including computing, storage, and data transfer. • Negotiated a flexible enterprise agreement allowing growth and shifting business priorities.
- Implementation of Governance Framework: • Established governance processes to monitor AWS usage and ensure ongoing cost optimization. • Delivered training sessions to internal teams on effective cloud resource management and optimization tools. • Implemented a regular review process to evaluate agreement alignment with evolving business needs.
Results
- Cost Savings: • Achieved a 35% reduction in annual AWS costs, saving $8.5 million over three years. • Eliminated $2.1 million in spending on unused or underutilized resources.
- Improved Contract Flexibility: • Negotiated terms allowing for dynamic resource scaling to match fluctuating demand. • Secured price protections for future expansions and new service adoption.
- Operational Enhancements: • Streamlined cloud resource allocation and improved utilization rates across the organization. • Enhanced transparency and governance in AWS usage, reducing inefficiencies.
Quote from the CTO:
“Redress Compliance’s expertise in AWS negotiations delivered exceptional value. Their strategic approach helped us achieve significant cost savings while aligning our contract with our operational and innovation goals. Their support was critical in optimizing our cloud strategy.”
Key Results:
- Savings Achieved: $8.5 million over three years.
- Flexibility Secured: Dynamic scaling and pricing protections.
- Operational Efficiency: Optimized resource usage and reduced waste.
This case demonstrates Redress Compliance’s ability to deliver tailored negotiation strategies, ensuring cost efficiency, flexibility, and alignment with business goals for AWS agreements.
