AWS

Insights into AWS Private Pricing Term Sheets

AWS Private Pricing Term Sheet (PPTS) is:

  • Cost Saving Mechanism: Designed for enterprise customers with large AWS spends.
  • Prepay Program: Offers discount rebates for a commitment to a particular annual spend.
  • Customized Discounts: Tailored based on the enterprise’s committed annual spending.
  • Requires Enterprise Support: Available to customers enrolled in AWS Enterprise Support.
  • Highly Customizable: Terms and discounts are negotiable based on specific enterprise needs​​.

Introduction AWS Private Pricing Term Sheets

AWS Private Pricing Term Sheet

In the dynamic world of cloud computing, cost optimization remains a pivotal concern for enterprises.

AWS Private Pricing Term Sheets (PPTS) are crucial in this landscape. They offer a specialized cost-saving mechanism for enterprise customers.

The PPTS is a strategic financial arrangement designed to aid large-scale enterprises in managing their cloud expenditure efficiently.

  • Cost-Saving Mechanism: The AWS PPTS is explicitly tailored for enterprise customers with substantial cloud spending. It represents a focused effort by AWS to provide cost-effective solutions to its larger clients, acknowledging their unique needs and consumption patterns.
  • Purpose: PPTS’s primary objective is to enable enterprises to leverage AWS services more economically. By offering a range of financial benefits and discounts, it aims to make cloud adoption and scaling more viable and sustainable for large organizations.

Key Features of AWS Private Pricing Term Sheets

Features of AWS Private Pricing Term Sheets

The AWS Private Pricing Term Sheet is distinguished by distinctive features designed to meet enterprise-level clients’ financial and operational needs.

Prepay Program with Discount Rebates

  • Nature of the Program: PPTS is essentially a prepay program. Enterprises commit to a certain level of AWS usage, and in return, they receive notable discount rebates. This arrangement allows for significant cost savings, especially for businesses with high cloud usage.
  • Discount Structure: The rebates offered under PPTS are tailored based on the enterprise’s committed annual spending, providing a customized approach to cloud cost management. This flexibility in structuring discounts allows businesses to align their cloud spending with broader financial strategies​​.

Enterprise Support Requirement

  • Mandatory Support Subscription: To qualify for PPTS, enterprises must be enrolled in AWS Enterprise Support. This requirement underscores AWS’s commitment to providing financial benefits and comprehensive support to its major clients.
  • Enhanced Support Benefits: Businesses participating in the Enterprise Support program gain access to a higher level of assistance, including technical guidance and account management services. This support is pivotal for enterprises managing extensive and complex AWS deployments​​​​.

Understanding these critical features of AWS Private Pricing Term Sheets is essential for enterprises looking to optimize their cloud investment.

PPTS offers financial incentives and integrates support services, making it a comprehensive solution for large-scale AWS users.

Benefits of AWS Private Pricing Term Sheets

Benefits of AWS Private Pricing Term Sheets

Discounted Rates and Customization

  • Significant Cost Savings: One of the foremost benefits of AWS Private Pricing Term Sheets is the provision of discounted rates on the total bill. These discounts are particularly substantial for enterprise customers with high AWS spending.
  • Tailored to Annual Spend: The degree of discount offered is customized based on the committed annual spend. This means that the more an enterprise commits to spending on AWS services annually, the greater the potential savings through the PPTS​​.

Flexibility in Pricing and Contract Negotiations

  • Negotiation Leverage: Under the PPTS, AWS offers pricing and contract terms flexibility, particularly for large-scale customers. This flexibility allows enterprises to negotiate terms most suited to their needs and usage patterns.
  • Adaptability to Business Changes: Negotiation flexibility is critical for enterprises whose cloud usage and requirements might change over time. PPTS allows for adjustments in contract terms to align with evolving business needs, providing a scalable solution that can grow with the enterprise​​.

Comparison with Traditional AWS Pricing Models

Comparison with Traditional AWS Pricing Models

PPTS vs. Standard AWS Pricing

  • Customization and Scale: PPTS offers a higher level of customization than traditional AWS pricing models, which are generally standardized and based on pay-as-you-go or reserved instance pricing. This customization benefits enterprises with large-scale cloud operations and complex requirements.
  • Long-Term Financial Planning: While standard AWS pricing models are designed for a broad range of customers and use cases, PPTS is geared towards meeting large enterprises’ financial and operational needs. This includes the ability to plan and budget for cloud costs over the long term, with clearer visibility on expenditure.
  • Enhanced Support and Services: In addition to financial benefits, enterprises enrolled in PPTS often receive enhanced support and services as part of AWS Enterprise Support. This comprehensive support is not typically available under standard pricing models and adds significant value for enterprises managing complex AWS environments.

The AWS Private Pricing Term Sheet offers distinct advantages over traditional AWS pricing models, making it an attractive option for enterprises looking to optimize their cloud expenditure while benefiting from a tailored and scalable approach to AWS services.

Strategies for Negotiating AWS Private Pricing Term Sheets

Strategies for Negotiating AWS Private Pricing Term Sheets

Effective negotiation strategies are crucial for maximizing the benefits of AWS Private Pricing Term Sheets (PPTS).

Here are some best practices and tips:

Understanding AWS’s Flexibility

  • Recognize Negotiation Opportunities: Understand that AWS is flexible, especially for high-spend clients, despite its standardized pricing. Identify areas where AWS is willing to negotiate and prepare to leverage them in discussions.
  • Customization Potential: Be aware that AWS’s PPTS can be highly customized. Come to the negotiation table with a clear idea of your specific needs and how AWS can tailor its offerings to meet these requirements.

Leveraging Enterprise Support Status

  • Maximize Support Benefits: Use your status as an Enterprise Support customer to your advantage. This can provide leverage in negotiations, as AWS values its enterprise-level relationships.
  • Strategic Relationships: Build and maintain a strong relationship with your AWS account manager. They can be instrumental in navigating the complexities of PPTS negotiations and advocating for your interests within AWS.

Top 5 Recommendations for Negotiating AWS PPTS

Top 5 Recommendations for Negotiating AWS PPTS

To fully leverage the benefits of AWS Private Pricing Term Sheets, enterprises should consider the following: To maximize the benefits of AWS Private Pricing Term Sheets (PPTS), organizations should adopt a strategic approach that aligns with their unique business needs and goals.

Here are five key strategies to consider:


1. Conduct a Comprehensive Needs Analysis

  • Assess Current Usage: Evaluate your current AWS usage across all services to identify trends, dependencies, and areas of high expenditure.
  • Forecast Future Needs: Project your cloud requirements over the next 1 to 5 years, considering growth plans, product launches, and scalability needs.
  • Pinpoint Key Focus Areas: Identify where customized pricing or terms will deliver the most value, such as high-cost services like EC2, S3, or RDS.

Example: A SaaS provider might analyze its growing reliance on computing and storage to request targeted discounts for these services in the PPTS.


2. Develop a Clear Negotiation Strategy

  • Define Objectives: Outline your desired pricing, commitment levels, and contract flexibility before negotiations.
  • Highlight Strategic Goals: Emphasize how your organization’s growth plans align with AWS services and how AWS can support your long-term success.
  • Identify Non-Negotiables: Be clear about terms that are critical to your business, such as payment schedules or support enhancements.

Example: A media company planning to expand globally could negotiate for multi-region pricing benefits aligned with their rollout schedule.


3. Leverage Data and Analytics

  • Use Usage Data: Present detailed data on your AWS consumption patterns and future requirements to support your negotiation points.
  • Identify Optimization Opportunities: Analyze areas where your spending could be optimized with tailored pricing.
  • Incorporate Third-Party Tools: Use cloud management platforms or cost analysis tools to uncover additional insights into spending and growth trends.

Example: A retail business experiencing seasonal spikes can use data to negotiate flexible terms for peak usage periods.


4. Explore Multi-Year Commitments

  • Maximize Discounts: 3 to 5 years Commitments often unlock more significant savings than shorter agreements.
  • Balance Flexibility: Ensure that multi-year agreements include terms for scalability and adjustments to accommodate evolving business needs.
  • Align with Financial Goals: Structure the commitment in a way that supports predictable budgeting and aligns with your long-term cloud strategy.

Example: A fintech company projecting steady growth can commit to a multi-year agreement to secure deeper discounts while building scalability into the contract.


5. Regularly Monitor and Adjust

  • Track Performance: Continuously monitor your AWS usage to ensure it aligns with the terms of your PPTS agreement.
  • Adapt to Changes: Be proactive in renegotiating terms as your organization’s cloud usage evolves or as AWS introduces new services and pricing models.
  • Collaborate with AWS: Communicate openly with AWS account managers to stay informed about updates and optimization opportunities.

Example: A logistics company adopting new IoT solutions can renegotiate its PPTS to include pricing for AWS IoT services.

FAQ: AWS Private Pricing Term Sheets

What are AWS Private Pricing Term Sheets?
AWS Private Pricing Term Sheets (PPTS) are customized agreements between AWS and customers that provide tailored pricing, discounts, and terms based on specific usage and business needs.

Who can negotiate a Private Pricing Term Sheet with AWS?
Organizations with substantial AWS usage, typically spending millions annually, or those with unique requirements may qualify to negotiate a PPTS.

How are discounts determined in a PPTS?
Discounts are based on factors such as annual spending commitments, projected growth, service usage patterns, and the length of the agreement.

Which services are covered under a PPTS?
PPTS can include a wide range of AWS services, but the specifics depend on the negotiated terms and the organization’s needs.

How does PPTS differ from the AWS Enterprise Discount Program (EDP)?
PPTS offers a more tailored approach with customized terms, whereas EDP provides standard discounts based on predefined spending thresholds.

Can existing AWS customers qualify for a PPTS?
Existing customers can negotiate a PPTS if their usage has grown significantly or they anticipate substantial future growth.

Is there a minimum spending requirement for a PPTS?
While there isn’t a strict threshold, businesses with significant AWS usage are more likely to benefit from and qualify for a PPTS.

What is the typical duration of a PPTS agreement?
Most agreements last 1 to 5 years, depending on the organization’s goals and the terms negotiated with AWS.

Are usage commitments required in a PPTS?
Yes, most PPTS agreements include usage or spending commitments, which are used to determine discount levels.

What payment terms can be negotiated in a PPTS?
Payment terms, such as upfront payments, annual billing, or deferred payments, can be negotiated to meet the customer’s financial needs.

What happens if spending commitments are not met?
If commitments are not met, penalties or adjustments to the discounts may apply, depending on the terms outlined in the agreement.

Can a PPTS include additional benefits?
PPTS agreements often include enhanced support, training credits, or collaboration on strategic initiatives.

Can the terms of a PPTS be modified during the agreement period?
Modifications may be possible, but they typically require renegotiation and AWS approval.

How should a business prepare for PPTS negotiations?
Businesses should analyze their historical usage and project future needs and align internal teams to determine their desired terms before negotiating with AWS.

What happens when a PPTS agreement ends?
At the end of the agreement, businesses can renegotiate terms, transition to a standard pricing model, or enter a new PPTS agreement based on their needs and usage.

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Author
  • Fredrik Filipsson has 20 years of experience in Oracle license management, including nine years working at Oracle and 11 years as a consultant, assisting major global clients with complex Oracle licensing issues. Before his work in Oracle licensing, he gained valuable expertise in IBM, SAP, and Salesforce licensing through his time at IBM. In addition, Fredrik has played a leading role in AI initiatives and is a successful entrepreneur, co-founding Redress Compliance and several other companies.

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