Case Study: AWS Contract Negotiation for a Midwestern US Bank
Challenge
A prominent midwestern US bank with 40,000 employees and a broad range of services, including retail banking, wealth management, and commercial lending, engaged Redress Compliance to assist with renegotiating its AWS agreement. AWS was critical to the bank’s operations, powering its digital banking applications, data analytics, and fraud detection systems. However, the existing agreement presented several challenges:
- Significant cost increases due to expanded cloud usage across departments.
- Misalignment between purchased AWS services and actual usage.
- Limited flexibility to support rapidly evolving banking technology needs.
- Inefficiencies in resource provisioning lead to wasted spend.
The bank required expert guidance to optimize its AWS contract, reduce costs, and secure favorable terms for future scalability.
The Process
- Comprehensive Usage Review: • Analyzed AWS usage across banking operations, data centers, and customer-facing digital services. • Identified overprovisioned and underutilized cloud resources. • Evaluated the effectiveness of key AWS services, such as analytics and machine learning, in supporting the bank’s strategic goals.
- Cost Optimization Recommendations: • Proposed rightsizing EC2 instances and transitioning workloads to lower-cost options such as AWS Savings Plans and Reserved Instances. • Identified opportunities to consolidate S3 storage tiers to optimize data costs. • Recommended the use of auto-scaling policies to match resource demand more effectively.
- Benchmarking and Strategic Preparation: • Benchmarked the bank’s AWS costs and terms against similar-sized financial institutions. • Highlighted discrepancies in pricing and terms and identified areas for cost savings. • Developed a negotiation strategy to secure volume-based discounts and additional value through tailored enterprise agreements.
- Negotiation and Contract Restructuring: • Engaged AWS account teams with a detailed analysis of inefficiencies and cost-saving opportunities. • Secured deeper discounts on core AWS services, including compute and storage. • Negotiated terms allowing for dynamic scaling to support fluctuating demands in customer transactions and data processing.
- Governance and Ongoing Monitoring: • Established governance processes to proactively monitor AWS usage and identify inefficiencies. • Delivered training sessions for IT teams to optimize resource allocation and manage future contract renewals effectively. • Implemented automated tools to track and control cloud spending in real-time.
Results
- Cost Savings: • Achieved a 33% reduction in annual AWS costs, saving $6.2 million over three years. • Eliminated $1.5 million in spending on underutilized resources and redundant services.
- Improved Contract Flexibility: • Negotiated dynamic resource scaling to meet fluctuating transaction volumes during peak banking hours. • Secured pricing protections and credits for future growth initiatives.
- Operational Enhancements: • Streamlined resource provisioning to align with operational needs. • Improved governance and transparency in cloud usage, reducing inefficiencies.
Quote from the CTO:
“Redress Compliance’s expertise in AWS negotiations transformed our cloud strategy. They helped us save costs substantially while ensuring our contract supports our growth and digital innovation goals. Their guidance was invaluable.”
Key Results:
- Savings Achieved: $6.2 million over three years.
- Flexibility Secured: Scalable licensing aligned with operational fluctuations.
- Operational Efficiency: Improved governance and optimized resource usage.
This case highlights Redress Compliance’s ability to deliver tailored negotiation strategies for financial institutions, ensuring cost efficiency, operational alignment, and scalability in AWS agreements.
