Strategic Toolkit: Managing AWS Contracts – 20 Key Considerations for Procurement

Introduction: For enterprise sourcing teams, managing AWS contracts can feel like navigating a moving target. Unlike traditional software that deals with fixed licenses, AWS’s pay-as-you-go model introduces dynamic costs across hundreds of services.

The cloud giant’s sheer scale—thousands of SKUs and constantly evolving offerings—creates complexity in ensuring cost efficiency.

If not proactively managed, hidden expenses like data egress fees and underutilized resources can erode value. Procurement leaders must impose structure and strategy on this environment to optimize costs, maintain flexibility, and secure contractual protections.

Below is a strategic toolkit of 20 key considerations tailored to AWS to help enterprise procurement teams manage large-scale AWS agreements for long-term value.

From leveraging AWS’s Enterprise Discount Program to enforcing FinOps governance, these guidelines focus on cost optimization, risk mitigation, and building a balanced partnership with AWS. Use this as a playbook to drive favourable AWS sourcing and negotiations outcomes.

Read AWS Contract Negotiation Playbook for CIOs.

1. Enterprise Discount Program (EDP) Strategy

Overview: The AWS Enterprise Discount Program (EDP)—also known as a Private Pricing Agreement (PPA)—is a custom contract in which you commit to a certain amount of AWS spend (typically over 1–3+ years) in exchange for a discounted rate on that usage. It’s a primary mechanism for enterprises to reduce cloud costs at scale.

EDPs best suit organizations with large, steady AWS consumption that can confidently forecast usage. A well-negotiated EDP can yield significant savings but also introduces obligations (like required spend levels and support plans) that sourcing teams must carefully manage.

Best Practices:

• Evaluate Eligibility and Scale: Pursue an EDP only if your AWS spend is high enough (often $ 1 M+ annually) to qualify. The bigger your committed spend and the longer the term, the higher the potential discount tier—large multi-year commitments (e.g., $50M/year for 3 years) command the deepest discount.
• Align Commit with Usage Projections: Base your commitment on realistic usage forecasts (see #2). Aim for a commitment level slightly below your expected spend to avoid a shortfall​. It’s better to overachieve and consume a bit more than commit (at the discounted rate) than to overcommit and pay for unused capacity.
• Negotiate Favorable Terms: Strive for the highest discount percentage your volume can justify. Ensure the EDP covers all relevant services and regions you use so most of your spending benefits from the discount (the EDP generally spans virtually all AWS services globally). If your usage will ramp up, see if AWS will allow a ramped commitment (e.g., lower commitment in year 1, higher in year 2) to match your growth. Also, negotiate any available prepayment incentives if you can pay upfront for extra savings.
• Leverage Multi-Account Aggregation: Consolidate AWS spending from all business units under the EDP (via a master account or AWS Organizations) to reach a higher discount tier (see #8). For example, combining cloud usage across subsidiaries can boost your committed volume – AWS rewards the *economies of scale​.
• Plan for EDP Onboarding and Management: Budget for the AWS Enterprise Support plan (at least Business or Enterprise tier) if you enter an EDP—AWS *, which requires Enterprise Support for the duration of the EDP contract​. Ensure you have internal governance (finance and FinOps) to track EDP credit consumption, report progress towards the commitment, and avoid surprises.

Common Pitfalls:

• Overcommitting Spend: The biggest risk is committing to more usage than you can realistically consume. AWS will not allow you to pay less if you undershoot – any underconsumption doesn’t reduce the amount owed and can’t roll over to the next term. Overestimating growth or failing to account for optimization can leave you paying for cloud resources you didn’t use.
• Too Short or Rigid Term: Opting for a very short commitment (e.g., annual EDP renewals) for flexibility can backfire if it prevents you from achieving higher multi-year discounts. Conversely, locking in a long-term contract without any outs can hurt if your business or technology strategy changes. Balance term length flexibly (see #4 for contract term considerations).
• Ignoring Support Cost Impact: An EDP mandates Enterprise Support, which adds *3–10% of your AWS bill (min. $15k/month) in support fees. If you didn’t budget for that, the savings from the EDP could be partly offset. Also, failing to leverage the value of Enterprise Support (TAM, etc.) means you’re paying a premium without return (see #5 and #14).
• Narrow Scope or Exclusions: Not confirming which spend qualifies toward the EDP can be a trap. Most AWS services are covered, but ensure any big cost items (e.g., Marketplace purchases or certain third-party services) are addressed. Marketplace spending usually *counts toward your commitment but isn’t itself discounted under the EDP, which can reduce effective savings if a large portion of your spending is through the Marketplace (see #9).
• Lack of Exit Strategy: If you sign a massive multi-year commitment without contingency clauses, you’re effectively locked in (AWS agreements typically have no termination for convenience without paying the commitment). This is acceptable only if you’re highly confident in long-term AWS usage. Failing to consider “what if we need to pivot off AWS in 2 years?” is a pitfall – even if unlikely, the contract leaves little room for flexibility (mitigate this through careful forecasting and internal commitment to AWS’s roadmap).

What Procurement Should Do: For enterprises meeting the spend threshold, procurement should lead the charge in structuring an EDP that maximizes savings while protecting the company’s interests.

Do your homework on usage (coordinate with finance and engineering on forecasts) and engage AWS early with data-driven requests for a high-tier discount.

Ensure that legal reviews the EDP contract for any unfavourable clauses and that you understand the obligations (minimum spend, support level, etc.).

Once in place, treat the EDP as a program to manage actively: track consumption against commitment, set internal alerts if spend is off pace, and hold AWS accountable for delivering support value throughout.

Procurement can lock in substantial cloud savings and predictabilit​y by carefully negotiating and managing an EDP.

2. Forecast and Right-Size Cloud Usage Commitments

Overview: Accurate forecasting is the bedrock of any cloud cost strategy – it underpins how you size an AWS commitment and where to optimize. Unlike fixed licensing, AWS usage can scale up or down rapidly, so sourcing teams must work closely with finance and IT to project future cloud demand.

This involves analyzing historical usage trends, anticipated project launches or decommissions, and efficiency improvements. A credible forecast enables you to commit at the right level: high enough to maximize discounts but low enough to avoid paying for unused services.

It also helps bust AWS’s often overly optimistic growth projections with your reality-based plan. Essentially, right-sizing your commitments through forecasting turns the cloud’s variability from a risk into a negotiable, manageable profile.

Best Practices:

• Conduct a Comprehensive Usage Audit: Examine your AWS footprint in detail. Identify what services drive the most spend and their utilization levels. For example, break down EC2 usage by instance family and average utilization, analyze storage growth in S3, etc. Use AWS Cost Explorer and Cost & Usage Reports, and consider third-party tools for granular visibility. This audit often reveals inefficiencies (like idle instances or over-provisioned storage) that can be addressed before locking in a contract.
• Eliminate Waste Pre-Renewal: It may sound counterintuitive, but optimizing your AWS environment before negotiations can strengthen your positio​n. By aggressively rightsizing and cleaning up unused resources now, you lower your baseline spend, ensuring you’re not committing to needless waste. One company’s audit found 20% of its EC2 instances were underutilized; they resized or terminated them and achieved significant savings. This leaner state means you negotiate a commitment based on efficient usage rather than inflated consumption, and AWS knows you won’t simply pay for inefficiencies. (Ignore any advice to postpone optimization – optimization is a continuous process and shows AWS you won’t pay for inefficiencies.)
• Collaborate on Growth Forecasts: Work closely with engineering and product teams to forecast future AWS needs over the contract ter​m. Factor in planned application deployments, user growth projections, geographic expansion, and upcoming initiatives to drive cloud consumption. Also, consider external factors – market trends, acquisitions, or even economic downturn scenarios – that could increase or decrease usage. This cross-functional input yields a more realistic multi-year usage curve (e.g., maybe 10% growth year 1, 20% year 2 if a new product launches, etc.). Document assumptions and get consensus from stakeholders on these forecasts.
• Set Commit Levels Strategically: Use the forecast to determine an optimal commit. A good rule is to commit to slightly less than expected usage to give a safety buffer​. For instance, if you project $10M/year in usage, you might commit $9M – confident you’ll at least spend that, with upside room if forecasts slip. This avoids penalties or wasted spend from underutilization. Also, consider ramp-up structures if your forecast is uneven (e.g. , commit $5M in H1, $7M in H2 of a year to reflect growth). AWS will often accommodate ramped commitments in an EDP.
• Incorporate Efficiency Improvements: Continuously revisit and refine forecasts with expected efficiency gains. If you have a cloud optimization program (FinOps, see #15) targeting 10% waste reduction each year, account for that in reduced spend growth. Similarly, plan for adopting cost-saving AWS features (like more Savings Plans or new Graviton instances) and reflect their impact. This prevents overallocation. Forecast demand growth and cost-optimization efforts to arrive at net usage estimates.

Common Pitfalls:

• Basing Commitments on Vendor Projections: Avoid accepting AWS’s growth estimates for your account. The AWS sales team may suggest you double your usage in 12 months; unless that aligns with your internal plans, rely on your data. Basing a multi-million-dollar commitment on unfounded optimism can leave you paying for phantom usage. Always sanity-check forecasts against historical trends and business realities.
• Incomplete Stakeholder Input: A forecast made in a silo (either only by IT or only by finance) can miss critical information. If engineering isn’t looped in, you might underestimate a major project’s impact. If finance isn’t consulted, you might ignore budget constraints or corporate initiatives (e.g. a mandate to cut costs by 10%). Lack of full input leads to commitments that are misaligned with one side or the other.
• Ignoring Variability and Seasonality: Many businesses have cyclical or volatile usage (retail spikes in the holiday season, analytics jobs at month-end, etc.). A pitfall is committing as if usage is flat. If you have seasonal peaks, ensure your commit can accommodate off-peak lulls (perhaps by committing closer to the average usage, not the peak). AWS bills monthly, so an annual commitment gives you flexibility to average out – but you still pay for the whole year’s commitment regardless of intra-year swings. Not accounting for this may result in overcommitment during quiet periods.
• Failure to Adjust Over Time: Cloud forecasts should be living documents. A common mistake is “set it and forget it.” If your business strategy shifts six months into a contract (e.g., you decide to divest a unit that was using AWS), update your expected usage and inform negotiations for the next term. Many companies get caught off guard at renewal because they didn’t revisit forecasts as conditions changed.
• Last-Minute Scramble: Perhaps the worst pitfall is not doing the analysis early enough. If you pull usage data a week before negotiation, you’ll be flying blind or forced to accept AWS’s terms. This ties into renewal timing (see #19) – insufficient preparation time leads to suboptimal, rushed commitments that don’t reflect your true needs.

What Procurement Should Do: Take ownership of the cloud forecasting process as a critical input to negotiation. Begin the groundwork well in advance of any AWS contract discussions. Organize a cross-functional team (FinOps, cloud architects, product owners, finance analysts) to gather data and projections.

Challenge assumptions and ask tough questions: “Do we need this much capacity?” “What if we optimize X – how much can we save?” Document the forecast in detail and use it to drive negotiation targets (e.g., “We need a commitment around $Y per year and a Z% discount to meet our cost objectives.”).

During negotiations, use your data as leverage. For example, show AWS that you’ve identified idle resources and will be trimming fat (so they understand you won’t be the type of customer that pays for waste).

By right-sizing commitments based on solid forecasts, procurement ensures the organization gets the best pricing without overpaying for cloud capacity it cannot us​.

3. Optimize with Reserved Instances and Savings Plans

Overview: In addition to enterprise-level discounts, AWS offers service-specific commitment options—Reserved Instances (RIs) and Savings Plans (SPs)—that can dramatically lower costs for steady-state workloads.

These are essentially volume discounts at the resource level: you commit to using certain compute or database capacity for 1 or 3 years, and AWS provides rates up to 72% lower than on-demand pricin​g. RIs and Savings Plans are critical cost optimization levers that procurement should ensure are effectively used by cloud teams.

They require a careful strategy to balance maximum savings with flexibility and align these commitments with any broader EDP agreement (they can stack with an EDP for a compound discount​). The goal is to minimize pay-as-you-go rates for predictable usage by pre-purchasing at a discount without ending up with unused reservations.

Best Practices:

• Prefer Savings Plans for Flexibility: AWS Savings Plans (introduced in 2019) are the more flexible successor to RIs. A Compute Savings Plan lets you commit to a specific dollar/hour spent on computing and applies to any instance type or region (and even AWS Lambda usage), delivering savings up to 66–72% off the on-demand rate. This flexibility means the discount still applies if you change instance families or regions. Use Savings Plans to cover broad, fluctuating compute needs without being tied to one instance type.
• Use Reserved Instances for Specific Needs: Standard Reserved Instances still have a place for certain scenarios. They allow capacity reservation in a specific availability zone, which is useful if you require guaranteed capacity (e.g., for databases in a particular AZ). They also apply to some services beyond EC2, like RDS, Redshift, or ElastiCache, which have their own RI offerings. Leverage RIs when you are highly confident in the long-term usage of a particular resource configuration and want the last bit of savings or capacity assurance. For example, if you know a certain database will run 24/7 for 3 years, a 3-year RI can maximize savings. AWS also offers Convertible RIs that let you switch instance families during the term, adding flexibility.
• Cover Steady-State Usage Aggressively: Identify the portion of your AWS usage that is consistently utilized (the “base load”) and aim to cover as much of that as possible with RIs or Savings Plans. For instance, if you always use about 100 EC2 instances worth of computing, even at low times, commit that amount. Use tools like AWS Cost Explorer’s recommendations or third-party optimization software to find these patterns. By locking in the base load, you ensure the cloud spend for that usage is at the lowest unit cost.
• Monitor and Manage Utilization: Treat RI and Savings Plan management continuously. Track the utilization rates of your reservations – AWS provides RI utilization reports. If an RI is underutilized (e.g., you purchased 100 instances and only 80 are running), take action: either launch additional instances to use the paid capacity, or if it’s a Standard RI, consider selling it on the AWS RI Marketplace. For Savings Plans, periodically re-evaluate if your commitment amount is too low or high and top up or adjust during renewal periods. Effective management can keep utilization near 100%, extracting full value.
• Integrate with EDP Strategy: Ensure your RI/SP purchases complement your enterprise discount strategy. Notably, RI and SP discounts apply before EDP discounts, and then the EDP’s percentage off applies to the remaining costs. This means you can use both, and you should, since RIs/SPs target specific services for deeper savings. Communicate with AWS how RI/SP spend counts toward your EDP commitment (generally as part of your usage for fulfilling the commitment). In negotiation, if you plan to heavily use savings plans, you might negotiate a slightly lower overall EDP commitment because you know those savings will reduce your spending. Balancing all commitment layers (RI, SP, EDP) to optimize total cost is key. Often, combining an EDP for a broad flat discount plus Savings Plans for heavy compute workloads yields the best financial outcome.

Common Pitfalls:

• Overcommitting RIs: Just as with an enterprise commit, you can overcommit on RIs. A common mistake is buying many 3-year reserved instances under the assumption that usage will grow, but the pre-paid money is wasted if those instances aren’t used. Unlike on-demand, you don’t get it back if you don’t use the hours. Avoid “reservation sprawl” by starting with conservative quantities and adding more later (you can always purchase additional RIs or SPs as needed).
• Locking into Outdated Technology: AWS frequently releases new instance types (e.g., moving from M5 to M6g instances). If you heavily reserve an older generation for 3 years, you might miss out on newer, more cost-effective tech. This is where Convertible RIs or shorter-term (1-year) commitments can help. A pitfall is being lured by slightly higher savings for 3-year fixed RIs when a 1-year or Savings Plan would let you pivot to new instances sooner. Keep an eye on AWS announcements so your reservations don’t become a trap.
• Fragmented Management: In large organizations, if different teams buy RIs independently, you may end up with suboptimal coverage or overlapping purchases. One group might have unused RIs, while another pays on demand. Lack of centralized visibility is a pitfall. Procurement should push for a centralized or at least coordinated approach to RI/SP purchasing to maximize enterprise-wide benefit.
• Ignoring Payment Options: RIs and Savings Plans offer payment choices: All Upfront, Partial Upfront, or No Upfront (with higher hourly rates for less upfront). Not analyzing which is best can be a mistake. All Upfront yields the best per-hour price but ties up capital; No Upfront preserves cash but costs more over time. Align this decision with finance – sometimes the budget situation favors one. A pitfall is defaulting to No Upfront for convenience, losing extra savings, or doing All Upfront without considering the impact of cash flow.
• Set-and-Forget Mentality: Buying some RIs or a Savings Plan and forgetting to revisit can lead to missed opportunities or losses. If your usage pattern changes (e.g., you refactor an app to use fewer instances), you might end up with unused reservations unless you adjust. Or if AWS introduces Savings Plans for new services (they have added SPs for SageMaker, for example), you should evaluate those. Failing to regularly optimize your RI/SP portfolio is a lost opportunity.

What Procurement Should Do: Procurement should ensure that a sound RI/Savings Plan strategy is in place and executed with any larger AWS deal. This might involve working with a cloud center of excellence or a FinOps analyst who crunches the numbers on coverage and utilization. Ask AWS for RI and SP recommendations and reports, and critique them – these reports can be overly conservative.

Develop internal guidelines, such as, “We aim to cover 70% of steady compute usage with 1-year Savings Plans, and 20% with 3-year RIs for databases.” Please make sure these purchases go through a governance process (possibly with procurement approval for large commitments) to align with financial goals.

Also, factor anticipated RI/SP savings into your overall AWS budget and negotiations—highlight to AWS that you intend to optimize usage internally (so they know you won’t be overspending blindly). By actively managing reserved capacity, procurement can help the company *achieve the lowest unit costs for AWS services​* while maintaining flexibility to adapt to change.

4. Align Contract Length and Flexibility with Business Needs

Overview: The duration and structure of your AWS contract are strategic choices that affect both discount outcomes and your flexibility. AWS often encourages longer-term commitments (e.g., a 3-year EDP) in exchange for a higher discount​.

However, business conditions or technology strategies might favor a shorter term or a need to adjust commitments over time. The key is to align the contract length, renewal dates, and any ramp or exit clauses with your organization’s planning horizon and risk tolerance.

Doing so maximizes benefits (cost predictability, negotiated discounts) without getting handcuffed by an agreement that no longer fits your needs two years in. This is about finding the spot between locking in savings and maintaining agility.

Best Practices:

• Match Term to Visibility: Choose a contract term that matches how far out you have clear visibility of your cloud needs. A 3-year term is common for many enterprises because you can reasonably plan projects over that timeframe, and AWS rewards it with better pricing. If your industry or technology usage is rapidly changing, a shorter term (1–2 years) might be prudent despite a slightly lower discount. The goal is to avoid committing beyond the point you can forecast. For stable environments, longer terms yield greater savings; for uncertain ones, shorter cycles reduce risk.
• Negotiate Ramped Commitments: Don’t assume a flat annual commitment is your only option. If you expect growth, negotiate a ramp – e.g., $5M in year 1, $7M in year 2, $10M in year 3 instead of $10M every year. AWS is often amenable to structuring deals this way. A ramped EDP ensures you aren’t overcommitting in the early years and aligns costs with the actual ramp-up of usage. It also simplifies renewal discussions because the growth is pre-built into the contract. Make sure the multi-year discount is applied appropriately across the ramp.
• Align with Budget Cycles: Time your contract term and renewal date with your organization’s budgeting and funding cycles. For example, if your company does 3-year capital planning, a 3-year AWS deal that co-terminates with that cycle is ideal. Or, if your fiscal year is the calendar year, consider an AWS contract that ends in December so you can align new costs with the new fiscal budget. This avoids situations where you need extra unplanned funds to renew a deal off-cycle.
• Include Renewal Notice and Review Clauses: As part of the contract, ensure there are clear provisions about renewal. AWS standard agreements won’t auto-renew an EDP without re-negotiation (it expires, and you revert to on-demand or new terms), but make sure you have notification periods. For example, AWS should remind you 90 days before the end of the term. Internally, set a reminder far before that (6+ months, see #19). If possible, negotiate a price-hold grace period after contract expiration – for instance, if the contract lapses, AWS could agree to still honor the discount for 60 days while a new agreement is finalized. This can prevent a costly gap if negotiations go on long.
• Consider Extension or Exit Options: Depending on your leverage, you might seek clauses for flexibility, such as the right to extend the contract at the same rates for an extra year (helpful if you need a bit more time before a new commitment). Conversely, in rare cases, large customers negotiate a termination for convenience (with notice and possibly a penalty). AWS is not known for easy escape clauses. Still, if you have concerns, you could propose an option to terminate if certain business events occur (merger, divestiture) with a defined penalty (like paying a percentage of the remaining commitment). Even if AWS declines, raising it sets the tone that flexibility is important. At minimum, ensure you understand the existing termination provisions (mostly, termination means paying the rest of the commitment).

Common Pitfalls:

• Over-committing to an Extended Term: Signing a lengthy contract (4–5 years or more) because of an attractive discount, only to have business needs change midway. For example, if a strategic shift to multi-cloud or an acquisition occurs, you might regret being tied to a long AWS deal. Some firms locked into long cloud contracts later struggled when cloud prices dropped or competitors offered better tech – they couldn’t easily move. Don’t let the lure of an extra few percentage points drive you into a term that’s beyond your strategic planning horizon.
• Renewal Crammed into Year-End: Many AWS contracts, especially initial EDPs, often end around AWS’s fiscal year (Dec). If you don’t plan, you might negotiate a renewal during a holiday crunch or fiscal year-end rush. This time pressure can benefit AWS, not you. Not giving yourself ample time (see #19) or aligning term dates thoughtfully can put you at a disadvantage, rushing to sign to avoid lapsing.
• No Ramp – Front-Loaded Commitment: A pitfall is agreeing to a flat high annual commitment, assuming your usage will grow into it. If that growth is delayed, you’re stuck overpaying in the early period. Without a ramp, you might be effectively subsidizing unused capacity initially. This is especially problematic for startups or new products on AWS – better to ramp as adoption grows than to pay for peak from day one.
• Ignoring Upgrade Paths: If you sign a shorter deal (say 1 year) for flexibility but fully intend to stay on AWS long-term, failing to negotiate an upgrade path is a pitfall. For instance, if, after a year, you want to sign a longer EDP, will the discounts improve? Don’t assume AWS will automatically give you the Year 2+3 benefits later. It can put you back at the negotiating table with possibly less leverage (since you’re already deeply in AWS).
• Misaligned Internal Expectations: Similar to alignment issues (#17), it creates confusion if IT wants multi-cloud but finance wants to double down on AWS for better discounts (or vice versa). It’s a pitfall if the CIO expects a 3-year cheap deal but the CFO wants the option to cut cloud spend in a year. This underscores the need for stakeholder alignment (see #17).

What Procurement Should Do: Act as the strategist in determining the optimal contract structure. Evaluate your organization’s roadmap: if it’s clear you’ll be on AWS and growing for the next 3+ years, advocate for locking in a multi-year deal to secure bigger savings (and avoid yearly negotiations).

If uncertainty looms, argue for a shorter term or built-in flex options. Communicate the trade-offs to leadership (e.g., “A two-year term costs us X more in lost discounts vs. a three-year term, but gives us an earlier off-ramp if needed”).

When negotiating, use term length as a lever: often you can trade a longer term for better unit pricin​g or vice versa. Also, plan renewals as a continuous cycle – treat each contract end as a checkpoint to possibly recalibrate term length for the next phase of your business.

By aligning AWS contract terms with business strategy, procurement ensures the cloud contract doesn’t constrain the company but supports it in terms of cost and flexibility.

5. Choose the Right AWS Support Plan and Value-Add Services

Overview: AWS offers several support tiers – Basic (free), Developer, Business, and Enterprise – each with different services, response times, and fees. For large enterprises, AWS Enterprise Support is typically expected, especially if you have an EDP (it’s required with an ED​. Enterprise Support provides 24/7 technical support, a dedicated Technical Account Manager (TAM), and faster response SLAs, but it comes at a hefty cost (a percentage of your AWS spend.

Choosing the appropriate support level – and ensuring you get the full value from it – is a key consideration. It impacts not only cost, but also the quality of service and risk mitigation you receive from AWS.

Procurement should weigh the criticality of workloads against support costs and negotiate any available concessions or enhancements to the support package.

Best Practices:

• Assess Your Mission-Critical Needs: Determine how essential AWS uptime is to your business and what support is required. If you run public-facing, 24/7 critical applications on AWS (e.g., an e-commerce site, financial transactions system), Enterprise Support will likely get the fastest response SLAs (15-minute response for critical outages and a designated TAM. If your AWS use is more limited or non-production, a lower tier like Business Support (slower response, no TAM) could suffice at a much lower cost. Match the support level to the stakes – downtime cost vs. support fee.
• Leverage Enterprise Support Benefits: If you are on Enterprise Support, use it fully. Engage your TAM in regular cadence calls, leverage them to escalate issues, and utilize the included services like *Well-Architected Reviews, operational reviews, and training sessions​. Enterprise Support offers architecture guidance, proactive monitoring for big events, and access to specialist support engineers – these can be extremely valuable in preventing problems and optimizing performance. Ensure your teams know how to create “Business Critical” severity tickets for urgent issues to get the 15-minute response. The key is translating the hefty support fee into real operational improvements (TAM and support engineers helping you optimize and troubleshoot).
• Consider Enterprise On-Ramp: AWS recently introduced “Enterprise On-Ramp,” a mid-tier between Business and Enterprise Support. It provides many benefits of Enterprise (e.g., 24/7 support, faster response than Business, TAM available but not as dedicated) at a lower cost (minimum ~$5.5k/month vs $15k) for customers that are scaling up. If full Enterprise Support is overkill for your current size, On-Ramp can be a good stepping stone, giving enhanced support at ~1/3 the base cost. Procurement should review if On-Ramp meets requirements, especially for organizations spending in the low millions annually on AWS. You can often start with On-Ramp and upgrade to Enterprise later as needs grow.
• Negotiate Support Fee Caps or Credits: While AWS support pricing is standardized (a tiered percentage of spend​), very large customers sometimes negotiate bespoke support fees. For example, if your AWS usage is projected to surge, you might ask AWS for a cap on support costs or a volume discount beyond the standard tiers. Alternatively, you could negotiate support credits – e.g., a certain Enterprise Support fee waived in the first year – especially if transitioning from a lower tier. Always raise the topic during EDP negotiations: “Given we must have Enterprise Support, can AWS provide any relief or added value there?” Even if AWS doesn’t reduce the percentage, they might agree to additional TAM resources or specific support commitments as a value-add.
• Continually Reevaluate Support Needs: Periodically review if your support plan still makes sense. If you’ve greatly optimized and your AWS spend drops, are you overpaying for Enterprise minimum fees? Or if your environment has grown more complex, do you need to upgrade to Enterprise from Business? Also, track your support ticket volume and satisfaction. If you’re not utilizing support much and have stable systems, perhaps you’re over-invested. Conversely, if you find Business Support responses too slow for an important system outage, that’s a sign to move up. Procurement should include a support plan review as part of quarterly or annual vendor management.

Common Pitfalls:

• Underestimating the Importance of Support: Cutting costs by opting out of Enterprise Support to save that 3–5% fee can be risky if your systems are mission-critical. We’ve seen companies go with minimal support to save money, only to suffer a major outage and struggle to get timely help – the business impact of downtime far outweighs the support fees. If AWS underpins revenue-generating services, skimping on support is a false economy.
• Paying for Enterprise Support and Not Using It: On the flip side, some organizations pay for top-tier support because it is required or assume they need it, but fail to leverage the benefits. The TAM might be under-engaged, or architecture reviews may never be scheduled. This is wasted value. Enterprise Support isn’t cheap, so not taking advantage of its features (proactive reviews, TAM guidance, etc.) is a pitfall that effectively raises your cloud TCO unnecessarily.
• Misconfiguring Severity Levels and Escalations: A more tactical pitfall is not correctly using the support system. For example, not designating truly critical incidents as “Production system down” severity would guarantee a one-hour or faster response. Or not having an internal process to escalate to AWS account managers if support isn’t addressing an issue. The support plan can only help if you use it correctly—otherwise, you might experience avoidable delays.
• Ignoring Third-Party Support Alternatives: While AWS doesn’t allow third-party support for their services (you either use AWS Support or not), some organizations could supplement AWS support with an external managed service provider (MSP). A pitfall is failing to consider if working with a capable AWS MSP or consulting partner could reduce your need for direct Enterprise Support. For instance, an MSP might provide 24/7 monitoring and initial troubleshooting, escalating to AWS only when needed. This isn’t suitable for everyone, but procurement should at least evaluate it if cost is a concern and an MSP is already in play.
• Not Accounting for Support in Cloud Economics: When comparing cloud costs or negotiating, companies sometimes discuss service rates and discounts, but forget the support fees. That 5–10% can be a significant addition. If you benchmark AWS vs Azure vs on-prem, ensure support costs are included in the comparison. Not doing so is a pitfall that can make AWS seem cheaper than it is. Also, if you plan for X% savings via an EDP, remember that Enterprise Support will take a slice of those savings as your spending grows (unless negotiated otherwise).

What Procurement Should Do: Take an active role in selecting and managing the AWS support relationship. Right-size the support level – push for Enterprise Support only if needed, and be ready to justify it internally by highlighting the benefits (and perhaps pointing to AWS’s data: Enterprise customers can experience cost-saving guidance that can offset the support fee​.

During contract negotiations, treat support as part of the overall deal value: if you’re committing to Enterprise Support, ask AWS what extra value they’ll provide (additional TAM attention, etc). After signing, monitor support usage. Set up quarterly service reviews with AWS support leadership and your TAM to assess case history, root causes of incidents, and ensure AWS meets SLAs.

If you’re not getting enough out of it, don’t hesitate to demand improvements – you’re paying a premium, so hold AWS accountable for delivering a premium service. In summary, procurement should ensure the organization has the *appropriate support tier and maximizes the return on that support investment.

6. Ensure Full Cost Visibility and Transparency

Overview: One of cloud procurement’s biggest challenges is knowing where the money is going. AWS’s granular billing (millions of line items) and self-service nature mean spending can sprawl across projects and departments. Cost visibility is crucial for controlling and optimizing spending—you can’t manage what you can’t see.

This consideration is about implementing the tools, tagging, and processes to gain insight into AWS costs. With proper cost allocation and reporting, procurement and finance can identify trends, hold teams accountable, and make informed negotiation decisions.

Moreover, demonstrating strong cost control to AWS (with detailed data on usage patterns) can bolster your credibility in asking for discounts. Cost transparency is the foundation of cloud financial management (FinOps) and empowers all other strategic actions.

Best Practices:

• Establish a Robust Tagging Strategy: From day one, enforce tagging of AWS resources with key metadata (e.g., project, application, department, environment). AWS supports cost allocation tags, which let you break down spend by these custom dimensions. Define a standard set of tags (like Department, CostCenter, Project, Environment) and make it policy that all AWS resources must carry appropriate tags. This way, you can attribute every dollar to an owner or purpose when the bill comes. *Consistent tagging = clear chargeback and accountability​.
• Use AWS Cost Management Tools: Leverage AWS’s native tools for visibility. AWS Cost Explorer provides interactive dashboards and reports. Set it up to view spending by service, by tag (once tags are activated for cost allocation), by account, etc. Configure AWS Budgets and alerts to notify if certain thresholds are exceeded. Enable the AWS Cost & Usage Report (CUR), a detailed dataset you can query for deep analysis. When properly used, these tools give near real-time insight into your cost drivers. For example, Cost Explorer can show that data transfer or a specific service spiked in cost, prompting an investigation.
• Implement Third-Party or Custom Dashboards: In complex environments, AWS’s native tools might not be enough or too raw for business audiences. Consider third-party cloud cost management platforms (CloudHealth, Apptio Cloudability, etc.) or build custom dashboards that aggregate the data into business-friendly views. The goal is to present cloud spend in the context of business metrics – e.g., cost per product, cost per customer transaction – so that executives understand where cloud investment is going. Procurement can partner with FinOps to deliver monthly or quarterly reports that make AWS spending *visible to decision-makers​, highlighting areas of interest.
• Foster Accountability through Chargeback/Showback: Improve transparency by showing each internal team what AWS costs they are responsible for. A chargeback model bills departments for cloud usage that is out of their budget; a showback model at least reports it to them without an actual funds transfer. Either approach creates awareness and incentive to optimize. When teams see, for example, that “Team A spent $100k on AWS last month mostly due to unused dev instances,” it drives behavioral change. Procurement can help design chargeback schemes that are aligned with how AWS provides the data (thanks to tagging and account segmentation). This also makes budgeting for cloud more accurate at the departmental level.
• Perform Regular Cost Reviews and Audits: Make cost transparency an active process. Hold monthly cloud cost review meetings (with IT, finance, and engineering reps) where you examine the latest spend breakdown. Identify anomalies (e.g., why did storage cost jump 20% last month?) and them to find root causes. Audit specific areas – for instance, pick one AWS service and deeply dive into its cost components and whether they’re fully understood. Regular scrutiny not only catches waste (leading to Section #16 actions) but also ensures no “hidden” costs go unnoticed. It creates a culture where cloud spend is visible and managed, not an opaque blob.

Common Pitfalls:

• Lack of Tagging Discipline: A common pitfall is having an inconsistent tagging regimen, resulting in large portions of the AWS bill that are “unallocated” or lumped into miscellaneous buckets. If only 50% of your resources are properly tagged to a business owner, the rest of the spend becomes a mystery – you’ll see a big number and not know which team or project drove it. This undermines accountability. Not investing upfront in automating tag enforcement (through infrastructure-as-code templates or policies) is a mistake that leads to costly retroactive cleanup.
• Overwhelming Data, No Insight: AWS billing data is extremely detailed. Some teams drown in data without deriving insight – e.g., they pull the CUR (which is millions of rows) and lack the tools or expertise to interpret it. Simply collecting data isn’t enough; failing to convert raw data into meaningful analysis is a pitfall. It can lead to analysis paralysis, where cost reports are so complicated that no one uses them. The key is to summarize and visualize the data digestibly for stakeholders.
• Ignoring Shared Costs and Overhead: Certain AWS costs don’t neatly tag to a single owner (e.g., NAT Gateway data transfer, enterprise support fees, centralized services like logging infrastructure). A pitfall is not establishing a method to allocate these shared costs fairly (perhaps by proportion of usage or a fixed percentage). If you ignore them, your cost picture is incomplete; if you allocate them arbitrarily, teams might dispute the fairness. This can erode trust in your cost reports.
• Not Tracking Savings and Optimization Impact: Transparency isn’t only about current spend; it’s also about showing the impact of cost-saving measures. A pitfall is failing to track how changes (like rightsizing or adopting Savings Plans) affect spending over time. Without highlighting optimization wins, management might only see high costs and not realize they could have been even higher. It’s important to report on metrics like “cost avoided” or efficiency gains, which require visibility into actual and avoided spending.
• Siloed Visibility: Sometimes, finance has one view of AWS costs (at a high level), and engineering has another (at a granular level), and they don’t reconcile. This pitfall leads to confusion and finger-pointing (“Finance says we spent $1M, but when engineers sum up the projects, it’s $800k”). To maintain the credibility of the transparency initiative, ensure a single source of truth or a way to reconcile top-down and bottom-up cost views.

What Procurement Should Do: Drive the implementation of a cloud cost transparency framework as part of vendor management. Advocate for the tooling and resources needed (e.g., approve spending on a FinOps tool if it provides value). Insist on tagging compliance as part of cloud governance – procurement can even tie cloud project approvals to having a tagging strategy. In negotiations, use your detailed cost knowledge to your advantage.

For example, if you know 40% of your AWS spend is on S3 storage, you might focus discussions on S3 pricing or alternative tiers. Show AWS that you have full visibility, which implicitly signals that your spend is under control. Internally, provide leadership with clear, story-driven reports: e.g., “This quarter, AWS costs for our customer-facing app were $X, primarily due to increased usage; unit cost per user fell by 5% due to optimization.”

This level of transparency builds confidence in IT’s cloud management and helps procurement justify cloud investments or push for optimizations. Making AWS spend transparent and understandable is foundational for effective procurement oversight and cost optimization​.

7. Mitigate Data Transfer and Egress Costs

Overview: Data transfer fees are often called the “hidden tax” of cloud computing. AWS charges for moving data out of AWS (egress to the internet), and even for data between regions or availability zones in many cases. These network data charges can be complex and, if left unmanaged, lead to surprisingly large bills.

For sourcing teams, it’s critical to address data transfer in architecture planning and contract discussions. While AWS typically doesn’t waive these fees, understanding and mitigating them through design and possibly special programs (like AWS Direct Connect or CDN use) is key to avoiding budget blowouts.

Data transfer costs directly affect cost optimization and can factor into decisions about multi-cloud or on-prem moves (since getting data from AWS to elsewhere incurs egress charges). Thus, procurement should treat data egress as a significant cost driver that needs a strategy.

Best Practices:

• Architect to Minimize Cross-Region Traffic: Work with your cloud architects to keep data transfer local whenever possible. AWS charges significantly more for data moving between regions than within a region. Design your workloads so that components that chat a lot (web servers, app servers, databases) reside in the same region or availability zone if feasible. “Efficient routes” reduce costs – e.g., avoid a scenario where an application in US-east-1 constantly pulls data from the US-west. If multi-region deployments are needed for redundancy, try to limit inter-region communication to only what’s necessary.
• Use Private Connectivity and Peering: Data transfer is cheaper (or free) when using AWS’s private network paths rather than the public internet. Within a region, always use private IPs or VPC peering between your VPCs – *avoid public IP transfers for internal traffic​. Public or Elastic IP traffic, even within the same region, can incur extra charges compared to using the AWS internal network. For hybrid scenarios, consider AWS Direct Connect: it provides a dedicated line from your data center to AWS, often at lower per-GB transfer rates for high volumes and with no egress fee on the AWS side for inbound traffic. Direct Connect can pay off if you have massive data flows to on-prem.
• Leverage Content Delivery Networks (CDNs): If you serve a lot of data to end users (files, videos, websites), use Amazon CloudFront (AWS’s CDN) or another CDN to distribute that content. CloudFront has advantageous pricing – data transfer out from CloudFront is cheaper than direct from S3 or EC2, and data from AWS services to CloudFront (origin fetch) is often free for certain request types​. Essentially, pushing content through CloudFront can significantly cut egress costs to the internet. Many companies offload a big chunk of traffic to CloudFront and pay reduced rates (plus get caching benefits).
• Identify and Optimize High-Cost Transfers: Regularly analyze your AWS Cost and Usage reports for lines like “DataTransfer-Out-Internet” or inter-AZ/region data transfer. These can be filtered in Cost Explorer by usage type. Once identified, optimize those patterns: e.g., if you find a lot of cross-AZ traffic because an EC2 instance in one AZ is talking to a database in another AZ, consider co-locating them in the same AZ to eliminate that cost (assuming HA requirements are met differently). If you discover significant traffic to a particular partner or service online, explore options like AWS PrivateLink or direct peering with that partner if possible. In short, turn unknown data flows into known ones and then engineer them for cost efficiency.
• Consider Data Transfer Pricing in Application Design: Educate application teams that data transfer is not “free” and should be treated as a design constraint like any other cost. For instance, a microservices design that calls APIs across regions might functionally work but incur big fees. Introduce guidelines: e.g., “If your app will move >X TB per month across regions or out of AWS, involve the architecture review board.” Sometimes, slight tweaks (compressing data, batching calls, or placing components closer together) can save tens of thousands of dollars. Procurement can encourage this by showing teams the cost impact of their data flows and factoring it into project cost reviews.

Common Pitfalls:

• “Surprise” Egress Bills: A classic cloud cost horror story is a team enabling a feature or transfer that unexpectedly triggers massive egress charges – for example, an analytics job that every night transfers terabytes from S3 out to an on-prem system, or enabling extensive logging to an external endpoint. The pitfall is not anticipating these charges in advance. Any design that pulls significant data out of AWS should be scrutinized before implementation. If not, the bill will reveal it in a very painful way.
• Ignoring Intra-Region Costs: Many assume that data movement is free within a region. While data transfer within the same AZ is free, data transfer across AZs in the same region often incurs fees (though lower than across regions). A pitfall is deploying a clustered application across multiple AZs for high availability, but not realizing that chatty sync traffic between AZs costs thousands per month. You must also account for AZ-to-AZ costs in designs (options include using the same AZ for certain internal communications or enabling caching to reduce cross-AZ calls).
• No Visibility into Data Transfer Breakdown: If your cost monitoring isn’t granular, you might see a large “Data Transfer Out” line item and not know what caused it. Some companies treat data transfer as a single bucket and don’t allocate it back to services or teams, leading to a lack of ownership. This pitfall means no one is working to optimize it because it’s a nebulous shared expense. Better tagging and analysis (as per #6) can tie data transfer spend to the consuming service or workload, which can then be optimized.
• Not Using Available Discounts/Programs: AWS doesn’t typically negotiate custom egress rates in normal contracts, but they have some implicit discounts. For example, if you transfer out >500 TB per month, AWS reduces the per-GB price in tiers. If you’re approaching those levels, failing to talk to AWS is a pitfall – sometimes, they can suggest solutions or ensure you’re architected to take advantage of the tiered pricing. Similarly, not using CloudFront or not exploring AWS Data Transfer Hub (for large internal transfers) could miss out on savings. There’s also the AWS Data Egress Waiver for research/education networks – niche, but if applicable (universities, etc.), not leveraging it is a missed opportunity.
• Inter-Cloud Transfers: In a multi-cloud scenario, moving data between AWS and another cloud can double-charge you—AWS will bill egress, and the other cloud might bill ingress or egress on its side. A pitfall is setting up architectures that regularly sling large volumes between clouds, thus incurring costs on both ends. If multi-cloud data movement is needed, carefully plan for it (or centralize data in one place and access it remotely to reduce shuttling back and forth).

What Procurement Should Do: Bring data transfer costs into the spotlight. When evaluating AWS proposals or reviewing spend, explicitly call out data transfer as a line item to discuss. Ask AWS if there are any special programs or pricing for your use case (they might not volunteer it, but if you are moving petabytes, it’s worth the conversation). Internally, ensure that network architecture costs are part of vendor discussions (maybe push AWS for solutions like data egress discounts for large volumes, though rare). Work with IT to map data flows and estimate costs before new deployments.

If expecting heavy egress, plan mitigation strategies (like deploying some services in the region closest to users to reduce internet egress or using compression). Keep this on the radar and ask for AWS guidance to optimize (they often have networking specialists who can advise on cost-effective designs).

Also, factor data transfer in total cost of ownership evaluations – e.g., if comparing AWS vs on-prem for a data-intensive app, highlight the ongoing transfer fees. By proactively managing the often-hidden data transfer costs, procurement helps prevent nasty surprises and ensures cloud solutions remain cost-effectiv​e.

8. Consolidate Cloud Spend Across the Enterprise

Overview: Large organizations often have multiple AWS accounts across departments, projects, or even acquired companies. If not managed centrally, this can lead to fragmented purchasing where each group might negotiate (or not negotiate) independently.

Consolidating AWS usage – through AWS Organizations or a centralized procurement strategy – allows the enterprise to present a single, larger volume of spend to AWS, which can unlock better discount tiers and more attention from the vendor.

It also simplifies governance and ensures that benefits like an EDP apply uniformly. Sourcing leaders should aim to eliminate internal silos in cloud procurement and aggregate demand to maximize bargaining power.

Best Practices:

• Use AWS Organizations for Central Billing: AWS Organizations is the native way to link multiple accounts under one master account for billing purposes. Implement a hierarchy where all AWS accounts (production, dev, per-team accounts, etc.) roll up to a central payer. This way, all usage is pooled for volume discounts and EDP commitment consumption. For instance, S3 has tiered pricing – with consolidated billing, usage from all accounts counts toward the tiers, so you reach cheaper pricing thresholds faster. The same goes for EC2 RI/Savings Plans sharing across accounts.
• Merge Negotiation Efforts: Coordinate procurement for all divisions so that AWS deals are enterprise-wide. If one business unit’s contract expires this year and another’s next year, negotiate them together if possible (align end dates). Present a unified front to AWS: rather than, say, two separate $5M customers, be seen as one $10M customer – the latter typically gets a higher discount bracket and priority service. Internally, a Cloud Sourcing Committee should be established with representatives from each major cloud-using division to share plans and align timing.
• Include Acquisitions and New Units: When your company acquires a firm or spins up a new cloud initiative, quickly integrate their AWS environment under the main umbrella. AWS will usually allow you to bring new accounts into an existing EDP mid-term (the usage will count, though the commit might need adjustment if significantly more). Proactively reach out to those teams to consolidate contracts. Often, smaller acquired companies pay retail rates – folding them into your enterprise agreement can generate immediate savings (a quick win). Ensure that the language in your AWS contracts allows the addition of additional accounts/entities to the agreement.
• Standardize Policies and Share Best Practices: With consolidated management, you can enforce certain cost-saving policies across the board (like the tagging policies, RI strategies, etc., mentioned elsewhere). You can also share assets like RI pools or Savings Plans across accounts, increasing utilization. For example, an idle RI in one project can be used by another if accounts are linked. Create a governance mechanism to oversee these shared resources. Additionally, share knowledge: one team’s optimization insight (e.g., how they reduced DynamoDB cost) can be communicated enterprise-wide via a cloud center of excellence, amplifying savings.
• Monitor Spend by Business Unit: While consolidating doesn’t mean losing visibility, it means quite the opposite. Use tagging or account segregation to keep a report of AWS spend by BU or product. This allows you to allocate costs internally, even as you negotiate externally in aggregate. Show each unit their contribution to total cloud spending and how it compares to others (perhaps fostering healthy competition to be more efficient). An internal chargeback model can live alongside external consolidation, not mutually exclusive.

Common Pitfalls:

• Shadow IT and Untracked Accounts: One big pitfall is the existence of AWS accounts that procurement/IT doesn’t even know about. Suppose a team with a credit card can open an account and run workloads outside the centralized structure. In that case, you’re missing out on consolidating that spend (and possibly exposing the company to security risks). This undermines volume leverage. Make it a priority to discover and corral all AWS usage – perhaps through expense audits or network scans. Untracked shadow accounts not only pay full price but also escape governance.
• Decentralized Contracts with Different Terms: Without consolidation, you might have multiple contracts with varying end dates and terms, which is suboptimal. For example, two divisions might have differing discount levels or negotiated clauses. This inconsistency is a headache and likely means one part of the company is getting a worse deal than another. It also weakens the overall negotiating stance—AWS sales teams might deal with each in isolation, not giving the enterprise credit for total spend.
• Complex Internal Cost Allocation: Sometimes, organizations fear consolidation because they worry about allocating costs internally if everything is on one bill. As mentioned, this can be overcome with tagging and account separation. The pitfall is avoiding consolidation due to internal accounting issues—that’s solvable and shouldn’t block external savings. Develop a fair chargeback model so that each unit pays for what they use, even if you pay AWS centrally.
• Overlooking Subsidiary or Global Spend: Multinationals might have AWS accounts in various countries or subsidiaries that operate semi-autonomously. A pitfall is failing to include those in the enterprise negotiation. If approached that way, AWS often can roll up global contracts or at least ensure consistent pricing globally. If each region negotiates on its own, you lose potential leverage. Break down internal barriers—even if a regional IT team historically handled their own AWS, bring them into the fold for a unified enterprise agreement.
• Organizational Resistance: Sometimes, individual tech teams resist central control, fearing loss of agility or oversight. This can sabotage consolidation efforts. If not addressed, it’s a pitfall—those teams might keep separate accounts or not fully participate, diluting results. Overcome this by communicating the benefits (lower costs, which means more budget available for innovation, etc.) and by giving teams autonomy within a centrally governed model (i.e., they can still deploy freely, just under a linked account with tagging).

What Procurement Should Do: Champion a “One-Company” approach to AWS. Start by taking inventory of all AWS engagements and spend across the enterprise. Engage leadership to mandate that any AWS use undergo a central procurement review.

If multiple contracts exist, plan to co-term and merge them at the next opportunity. Use hard data: for example, “By consolidating, our total AWS spend would move from $8M to $12M, potentially qualifying us for an additional X% discount based on volum​e.” Present that to executives to get buy-in.

Then coordinate with AWS at the account team and sales management level – make sure they see your company as one big client and push for a single global account manager if feasible. Internally, set up governance (perhaps a Cloud Steering Committee) to manage the consolidated environment and address any concerns from individual teams.

Remember to also consolidate knowledge and practices. Procurement can facilitate internal workshops for different teams to share their AWS cost management tips, creating an internal community.

By consolidating spend and efforts, procurement increases leverage for better pricing and streamlines cloud management across the board.

9. Leverage AWS Marketplace and Third-Party Spend

Overview: AWS Marketplace is a digital catalog of third-party software and services customers can purchase and run on their AWS accounts. From a procurement standpoint, Marketplace offers an opportunity: if you route certain software purchases through AWS, that spend can count toward your AWS committed spend (EDP) and be centralized on your AWS bill.

Many enterprise software vendors (security tools, databases, SaaS connectors, etc.) are available via the Marketplace. Strategic use of AWS Marketplace can thus help fulfill AWS contract commitments and simplify vendor management.

However, one must be mindful that while Marketplace spend contributes to meeting your commitment, AWS typically does not apply your AWS discount to third-party items (the pricing is set by the vendor​. Procurement should consider which third-party software expenditures make sense to channel through AWS and negotiate accordingly.

Best Practices:

• Map Your Software Portfolio for Opportunities: Review the software and services your company buys that run on AWS or could be billed through AWS. Common examples include software licenses for appliances/VMs (firewalls, VPNs), developer tools, data analytics platforms, or even SaaS subscriptions that offer a Marketplace option. If you identify $500k/year of software that could be bought via AWS Marketplace, that’s an additional $500k counting toward your AWS spend commitmen​t. It can be a win-win: simplify billing (one consolidated invoice) and boost your AWS negotiation volume.
• Negotiate Private Offers on Marketplace: Many vendors on AWS Marketplace allow Private Offers, meaning you negotiate price and terms directly with the vendor (often with AWS’s assistance). Then, the vendor publishes a custom offer for you on the Marketplace. Use this to your advantage: negotiate your enterprise volume discount with the third-party vendor as usual, then transact it through Marketplace to count to AWS. The best practice is to ensure you’re not paying more on the Marketplace than you would directly. AWS takes a cut from the vendor, but that shouldn’t raise your price – vendors often keep customer pricing consistent and accept a lower margin to get the benefits of Marketplace. Always compare the direct quote vs. the Marketplace quote and insist on parity or better.
• Include Marketplace Spend in EDP Planning: When structuring an EDP, talk with AWS about how Marketplace spend will be treated. In general, AWS *counts Marketplace spend toward the committed dollar amount​ (often up to a certain cap, e.g., sometimes AWS might only count it up to 25% of the commitment – clarify this in your contract). Knowing this, you might commit to more total volume if you have significant third-party spending. Also, clarify exclusions – support fees for third-party products might not count. By understanding these rules, you can plan to route enough third-party purchases through AWS to safely meet your commitment without solely increasing first-party AWS service usage.
• Benefit from Simplified Procurement Process: Purchasing via AWS Marketplace can cut down on separate procurement cycles. Once terms are set, adding more licenses or subscriptions via Marketplace quickly goes through your AWS PO. Embrace this efficiency, especially for software that may scale up and down alongside your AWS usage (e.g., as you spin up more cloud environments, you add corresponding third-party tools via Marketplace). Ensure that your AP and finance are internally ready for this – often it means one consolidated invoice from AWS rather than many vendor invoices, which is generally positive.
• Track and Optimize Marketplace Usage: Treat Marketplace spend as part of your cloud optimization efforts. For instance, if you have an AMI (Amazon Machine Image) subscription from Marketplace that charges hourly, monitor its usage. Teams sometimes forget about these, just like they forget instances – you might be paying for unnecessarily running third-party software. Also, periodically review to see if there are new competing solutions on the marketplace that could be cheaper or more suitable. Essentially, manage third-party cloud software with the same rigor as AWS native services.

Common Pitfalls:

• Assuming AWS Discounts Apply: One pitfall is thinking your EDP discount (say 15% off) will also make Marketplace software 15% cheaper. It does not – Marketplace products are sold at list or negotiated vendor price, and AWS passes through the cost (taking their fee from the vendor). So, don’t expect savings from AWS on the third-party item itself. The value is in it counting toward your commitment, not reducing the third-party cost directl​y. Failing to realize this could lead to budget miscalculation. Always evaluate the net financial impact: sometimes, Marketplace might even have a slightly higher cost if not negotiated (vendor might list with a premium). That’s why private offers are key to aligning pricing.
• Marketplace Spend Without Oversight: It can be easy for individual engineers to subscribe to a SaaS tool via Marketplace with one click (if they have IAM permissions). Without oversight, this could lead to unwanted software expenses or duplicative tools being purchased. The convenience can bypass normal procurement review. Make sure there’s governance – perhaps require that Marketplace subscriptions over a certain amount need approval, just as you would for any software contract. Otherwise, you may see a bloated bill with various marketplace charges that procurement didn’t vet.
• Hitting Commit Limits or Miscounts: As mentioned, some AWS contracts might cap how much Marketplace spend counts toward the EDP commitment (for example, only up to 25% of your annual commitment). A pitfall is relying on Marketplace spend to meet your commitment and then discovering that not all of it counted. Or not tracking how much you’ve funneled through – you don’t want to underuse your commit on first-party services because you over-relied on third-party. Keep an eye on these proportions and negotiate caps that won’t hurt you (if AWS initially says 25% cap and you expect 30% of your spend is third-party, negotiate for a higher cap in the contract).
• Overlooking Direct Deals: Sometimes, going through AWS might cause you to miss out on vendor-specific incentives. For instance, a software vendor might offer a bigger discount or a broader enterprise license if you deal directly, but they have less flexibility through the Marketplace. Be cautious: do what’s financially best overall. If a crucial software vendor can give you 10% better pricing off-AWS in exchange for a direct 3-year deal, weigh that against the benefit of counting it toward AWS commit. It might still be worth going through AWS if that commit is critical to achieve, but it might not if it’s just marginal. Always do the math and coordinate – sometimes you can negotiate with the vendor and still transact via Marketplace, getting the best of both.
• Contractual Blind Spots: Ensure that any terms you need (data privacy, liability, etc.) from third-party software are still in place when buying via Marketplace. AWS Marketplace will have standard terms, but you might need a separate agreement or enterprise license with the vendor for specific clauses. Don’t assume Marketplace clicks through all your usual procurement checkpoints for third-party software. It addresses the commercial transaction, but you may still need the vendor to sign a side agreement for things like GDPR, support expectations, etc. Not doing so can leave gaps (e.g., who do you call for support – AWS or vendor? Usually vendor, per their SLA, which you should secure).

What Procurement Should Do: Use AWS Marketplace as a strategic procurement channel. Engage with both AWS and third-party vendors to structure deals that take advantage of it. During AWS negotiations, explicitly include a discussion on Marketplace: “We plan to route approximately $X of third-party software through AWS – we want this to count towards our EDP and here’s the list of key vendors.”

This flags to AWS that they should facilitate those private offers. Internally, coordinate between your cloud and software procurement teams – they shouldn’t operate in isolation. They may find that bundling a software purchase via AWS adds value.

Also, track the Marketplace spend as its category in reports (e.g., show how much of your AWS bill is third-party) so it’s visible. If it’s growing, that’s leverage with AWS (to show increased total spending) and third-party vendors (to negotiate volume).

10. Plan for Multi-Cloud or Hybrid Cloud Strategies

Overview: While AWS might be your primary cloud provider, few enterprises want to be 100% dependent on a single vendor. A multi-cloud strategy (using multiple cloud providers) or a hybrid strategy (combining cloud with on-premises infrastructure) can provide leverage in negotiations and risk mitigation against lock-in.

From a procurement perspective, even if you don’t actively split workloads today, the option to do so strengthens your hand with AWS. It also gives you flexibility if AWS pricing or terms become unfavorable. However, multi-cloud/hybrid approaches have trade-offs: potential loss of volume discounts and added complexity.

The key is approaching them deliberately, using them as a strategic tool rather than a reaction. This consideration focuses on how procurement can factor multi-cloud/hybrid plans into the AWS sourcing strategy.

Best Practices:

• Evaluate and Benchmark Alternatives: Do your homework on AWS’s competitors. Understand how Azure and Google Cloud (or others) compare in terms of services, pricing, and contract offerings. Even if you have no immediate migration plan, obtaining competitive pricing quotes or running pilot projects on other clouds can give you data points. For example, suppose GCP offers commitment discounts or flat rate pricing for certain services. In that case, you can bring that up in AWS negotiations (“we have assessed alternatives – for comparable usage, GCP would cost $X”). Ensure these comparisons are apples-to-apples and include support and networking costs. The very act of evaluating alternatives signals to AWS that you are a savvy customer with options.
• Maintain Portability in Architecture: Encourage your engineering teams to design with cloud portability when feasible (this is also covered in #11). Practically, this might mean using technologies like Kubernetes, multi-cloud management tools, or avoiding highly proprietary AWS features for core components. You have real multi-cloud capability if your systems can run on multiple environments with minimal refactoring. From the procurement side, you might fund proof-of-concepts on another cloud or VMware/Azure Stack on-prem to validate portability. The more you can show AWS that moving is not an insurmountable hurdle, the more credible your negotiation stance.
• Use Multi-Cloud as Negotiation Leverage: Even if you don’t intend a large-scale shift, let AWS know that each renewal is a competitive decision. This can be done subtly or explicitly. For instance, run a cloud RFP before your EDP renewal – invite AWS and other providers to bid for your forecasted workloads. AWS will see they’re in a competitive bake-off. You can also leverage public cloud market dynamics: mention them if you’re aware of aggressive incentives (like Azure giving credits to switch, etc.). AWS reps are trained to counter competitors and may improve terms to win your recommitment. Keep AWS “on their toes” by never assuming vendor lock-in is absolute – even if moving 100% off AWS would be painful, emphasize that new projects could go elsewhere, or a portion of the workload is fungible.
• Adopt a Hybrid Approach Where Sensible: Consider if certain workloads are more cost-effective or strategically wise to keep on-prem or in colocation. Some enterprises repatriate specific systems due to steady-state load or to avoid cloud markups. If you have a robust on-prem environment, use that in talks: e.g., “We’re evaluating keeping this big Oracle DB on our private cloud vs. AWS RDS – price needs to justify moving it.” Also, AWS has hybrid offerings (Outposts, Local Zones). Ironically, these can be leverage points too: if AWS knows you might choose on-prem or another vendor’s hybrid solution, they might push their own and give commercial incentives for AWS Outposts. Align hybrid decisions with procurement strategy by factoring total cost of ownership – sometimes showing AWS that on-prem is 30% cheaper for a certain workload can push them to find you savings or credits.
• Spread Risk, Not Too Thin: Strategically, consider a multi-cloud stance that perhaps designates a secondary cloud for a certain use case (for example, using GCP for big data workloads or Azure for some SaaS integrations) rather than a 50/50 split of everything. This gives you true experience and presence in multiple clouds without duplicating every effort. Procurement can then compare vendor management experiences and keep both relationships active. When AWS sees that, for example, you spend $1M on Azure and $X on AWS, they know they’re not the only game in town. Use that to negotiate things like flexible contract terms – you might say, “We value flexibility and are willing to accept a slightly lower commitment to retain some capacity for multi-cloud.” The goal is for AWS to compete to be your majority provider, but it knows it must continually earn that business.

Common Pitfalls:

• Using Multi-Cloud as a Hollow Threat: If AWS perceives your multi-cloud intentions as a bluff with no substance, it won’t carry much weight. A pitfall is to talk about moving to Azure without any preparatory work or internal buy-in. AWS account teams often know the technical status of your environment – they might ask, “Have you run anything on Azure/GCP?” The threat is weak if the answer is no and there’s no plan. It’s better to have at least pilot workloads or genuine assessments underway to back up your stance.
• Losing Volume Discounts by Spreading Too Thin: If you split significant workloads across clouds, you might drop below discount thresholds on each, negating the benefit. For example, two $5M spends might get better pricing than one $10M spend. The benefit of multi-cloud must outweigh the loss of economies of scale. Some companies jumped into multi-cloud for strategic reasons but saw their cloud bills rise because they lost their highest-tier discounts. Avoid this by carefully modeling costs in single and multi-scenarios and negotiating volume agreements with both clouds (cloud providers may adjust discount expectations if they know you’re multi-cloud, but you have to push for it).
• Underestimating Management Overhead: Multi-cloud/hybrid introduces complexity—different skill sets, tools, and security models. If not managed, this can lead to inefficiencies and even security gaps, which have cost implications (operational incidents, etc.). From procurement’s view, also note that you’ll have multiple contracts to negotiate and track. Going multi-cloud without investing in proper multi-cloud management capabilities is a pitfall. Ensure your organization is ready for the complexity or limit the scope to what you can handle.
• Not Capitalizing on Cloud Competition: Sometimes enterprises adopt multi-cloud passively (different teams choose different clouds), but don’t actively use the situation to negotiate. That’s a missed opportunity. If you’re already multi-cloud by happenstance, leverage that: let each provider know the other exists in your environment, and you will allocate workload based on performance and cost. A pitfall is treating each relationship in isolation – instead, create a bit of friendly tension where each cloud provider is aware of the other’s footprint and therefore eager to prove themselves, often through better service or deals.
• Misaligned Strategy Internally: Similar to alignment issues (#17), if IT wants multi-cloud but finance wants to consolidate on one to maximize the discount, it creates confusion. It’s important to have a clear business rationale for multi-cloud (risk mitigation, avoiding lock-in, regulatory needs, etc.) and ensure all stakeholders agree. If not, you might not fully commit to any approach and end up half-negotiating with AWS and half-exploring other clouds, satisfying neither goal.

What Procurement Should Do: Treat multi-cloud/hybrid as part of your sourcing strategy playbook. Even if the company is largely AWS-centric, maintain relationships with other cloud providers – take their calls and learn their programs (they often will perform free assessments or POCs for you).

Data from these interactions should be brought to AWS negotiations. If appropriate, lead a competitive RFP for cloud services to formalize the evaluation (this can be powerful: AWS may respond with concessions to avoid losing). Internally, advise leadership on the cost-benefit of multi-cloud: quantify the negotiating leverage and risk reduction versus the potential lost discount.

If the company decides to pursue multi-cloud, ensure contracts reflect that flexibility – for instance, you might opt for slightly lower commitments on each platform or include clauses that allow you to move some % of workload without penalty.

Keep an eye on cloud market trends (new entrants, price cuts, partnerships like Azure with SAP, etc.) and inject those into discussions. In summary, procurement should keep the competitive landscape alive. Hence, AWS sees that you are not an auto-renew customer but will continually seek value and flexibility.

11. Avoid Proprietary Lock-In and Ensure Flexibility

Overview: One risk of heavy AWS usage is vendor lock-in—becoming so dependent on AWS-specific services and constructs that moving away (or even threatening to) becomes difficult.

AWS offers many unique, high-value services (Lambda, DynamoDB, Aurora, etc.), but they often have proprietary elements that can increase switching costs. While leveraging these services can accelerate development and performance, procurement and IT leaders must recognize the trade-off between short-term benefits and long-term flexibility.

This consideration is about proactively managing lock-in: making conscious decisions about which AWS services to use, ensuring data portability where possible, and negotiating contracts that don’t unduly bind you. The goal is to preserve leverage and options so AWS continues to earn your business rather than trap you.

Best Practices:

• Identify Critical Lock-In Points: Conduct an architectural review to identify which parts of your stack are heavily AWS-specific. For example, if you extensively use DynamoDB (AWS’s NoSQL), note that migrating off would be non-trivial (different APIs/data model). Similarly, serverless functions (Lambda), AWS-specific machine learning services, or proprietary APIs (like SQS and SNS) can tie you to AWS. Catalogue these and assess the impact if you need to switch them out. This doesn’t mean avoiding all AWS services, but doing so consciously and having an exit strategy for the critical ones.
• Keep Data Portable: Ensure that your data is not hostage to AWS. Use open data formats and regularly back up critical data to locations outside AWS (could be on-prem or another cloud). For instance, if you use RDS (AWS’s managed database), periodically take database snapshots and store them off-AWS, or use database engines (like PostgreSQL, MySQL) that you can run elsewhere if needed. Avoid heavy use of proprietary features that would complicate migration for object storage. By keeping data movable, you can migrate or dual-run on another platform if needed. (Egress cost is a factor, but a one-time migration cost might be acceptable in a strategic shift.)
• Modularize and Abstract: Encourage architecture patterns that abstract away provider-specific details in non-critical areas. For example, an application layer or middleware can interface with AWS or alternatives with minimal changes. Containerization is a key enabler – containers can run anywhere, so using EKS (Kubernetes on AWS) rather than deep AWS-specific services can give you more portability. Similarly, consider multi-cloud frameworks or infrastructure such as Code (Terraform, etc.), which are cloud-agnostic. This modularity means if you ever needed to shift a component off AWS, you’re modifying an adapter, not rewriting the whole application.
• Negotiate Flexibility Clauses: While AWS won’t give an easy out clause, aim for contractual terms that avoid undue lock-in. Ensure the contract doesn’t auto-renew commits without renegotiation, and try for options like shorter renewal cycles or rights to adjust commit levels if business circumstances change. If you’re concerned about specific scenarios (e.g., AWS discontinuing a service you rely on), discuss provisions (like the ability to reduce the commit associated with a discontinued service). You might also negotiate a clause that AWS will reasonably assist in data export or transition if the contract ends. These discussions remind AWS that you value flexibility highly.
• Continuously Evaluate Alternatives: Even if you are currently all-in on AWS, occasionally explore other solutions. For example, try an open-source equivalent of a managed AWS service or monitor multi-cloud container orchestration trends. This prepares you with knowledge if you ever need to pivot and signals internally that lock-in risk is being mitigated proactively. Sharing with AWS that you experiment with other solutions (without threatening) shows them you are technically capable of moving if needed. This can indirectly encourage them to treat you well regarding pricing and support.

Common Pitfalls:

• Going “All-In” on Proprietary Tech Too Soon: Adopting many higher-level AWS services quickly (because they promise easier, faster deployment) can lead to an environment very tailored to AWS. The pitfall is not pausing to consider open alternatives; shifting off any of these could be a significant project once built. The short-term agility can lead to long-term inflexibility if not managed.
• No Exit Planning: A stark pitfall is no plan for leaving or reducing AWS usage because “we’ll never leave.” This mindset can lead to complacency and overconfidence from AWS’s side. Companies that assume a vendor will always be cheap/good sometimes face regret if prices rise or technology needs to shift. While AWS often lowers prices, you should still have at least a conceptual exit strategy or contingency, even if it’s just a list of what would need to change to run elsewhere.
• Data Gravity as Lock-In: Over time, you might accumulate so much data in AWS (many TB/PB) that moving it becomes logistically and financially daunting. If you don’t periodically archive or copy data, you may inadvertently trap yourself by sheer volume – the thought of paying egress on petabytes might deter any migration consideration. Address this by practicing selective external backups or at least knowing how you’d migrate data sets (maybe via AWS Snowball devices or similar) should you need to.
• Standard Contractual Limits: Accepting AWS’s standard liability and SLA terms without question can be a form of lock-in to risk. If AWS has almost no liability and an SLA credit is tiny compared to your business impact, you are essentially on the hook for everything, even if AWS fails. That dependency can be dangerous. Aim to negotiate slightly improved terms (even if just a higher liability cap or custom SLA for a crucial service) so that AWS has more skin. Not doing so isn’t lock-in in the usage sense, but it locks you into absorbing all risk.
• Overconfidence in AWS’s Dominance: AWS is a leader today, but technology moves fast. A pitfall is assuming AWS will always be the best or only viable choice for everything. Companies in the past locked into a single tech ecosystem (e.g., mainframes, specific database vendors) sometimes found themselves paying a premium or stuck as the world moved on. Avoid tunnel vision – even as you invest in AWS, keep an eye out for disruptive tech (serverless on other clouds, edge computing, etc.) so you’re not caught off guard.

What Procurement Should Do: Be the guardian of flexibility in cloud discussions. During planning and negotiations, consistently ask, “What is our alternative if we didn’t use this AWS service?” and “How easily can we change this decision later?” Push for documentation of exit plans for critical architectures.

Ensure that large cloud-related decisions are reviewed, including a lock-in risk and mitigations section. For contracts, involve legal to secure any possible protections (even if limited). In communication with AWS, emphasize that while you value the partnership, the company retains a multi-vendor outlook to ensure best value – that message should be delivered professionally but clearly.

When AWS knows a customer could leave if necessary (even if it’s a heavy lift), they are more likely to go above and beyond to satisfy you. Internally, champion engineering best practices that preserve optionality (like using open standards).

Finally, if you sense the organization becoming too entwined with AWS without checks, raise it as a strategic concern to leadership – quantify the risk (e.g., “If we ever had to migrate, it would take X months and Y cost – are we comfortable with that? If not, let’s invest in some portability measures now.”).

By proactively safeguarding flexibility, procurement helps ensure AWS remains a choice based on value, not an unavoidable dependency.

12. Negotiate Key Contractual Protections (SLAs, Liability, etc.)

Overview: AWS’s standard customer agreement tends to favor AWS, including modest service level agreements (SLAs) with limited remedies and tight liability caps. Enterprise procurement should scrutinize these terms and push for improvements or clarifications, especially if AWS underpins critical services.

While AWS won’t radically overhaul its Ts&Cs for one customer, certain protections, such as enhanced support commitments, better outage remedies, or customized terms for unique business requirements, can be negotiated.

Ensuring your contract covers performance guarantees, data protections, and fair liability allocation is crucial to reducing risk. This consideration is about not overlooking the “legal fine print” in favor of just pricing—a bad clause can cost more than a bad price in the event of an incident.

Best Practices:

• Understand Standard SLAs and Shortcomings: AWS offers service-specific SLAs (typically uptime percentages like 99.9% or 99.99% availability), and usually, the remedy is a service credit percentage for downtime beyond that. Review these in detail for the AWS services you heavily use. Identify if any critical service lacks an SLA or is insufficient for your needs. For instance, the standard EC2 SLA is 99.99% uptime in a region if deployed across multiple AZs; ensure you architect to meet SLA requirements. Avoid SLA exclusions (e.g., customer misconfiguration or planned maintenance may not count). Know the credit process – usually, you must request credit within a certain time frame. Knowledge of AWS’s SLA framework equips you to discuss expectations.
• Prioritize Negotiating What’s Negotiable: Some SLA elements might be fixed, but you can negotiate other support aspects. Focus on what matters: e.g., response time commitments for critical tickets (maybe in an addendum, AWS support commits to 15-min response for P1, which is already standard for Enterprise, but you might formalize escalation paths), or having a named backup TAM if the primary is unavailable (ensuring continuous support). If uptime of a service is paramount, consider negotiating a higher credit or bespoke SLA. For example, AWS could provide additional service credits or on-site assistance if an outage exceeds X hours. AWS typically won’t change core SLA percentages per customer. Still, large clients can sometimes get tailored support promises around the SLA (like a detailed incident report and mitigation plan for any Severity 1 incident). Pick your battles based on risk: for absolutely critical services, perhaps deploy multi-region or multi-cloud for protection rather than expecting AWS to sign an extreme SLA.
• Liability and Indemnification: By default, AWS’s liability is highly limited, often to the amount you paid AWS in the last 12 months, and they disclaim indirect damages. This is a concern if your business would incur huge losses from AWS failures (think an AWS outage takes down your revenue stream). Aim to raise the liability cap or get carve-outs for certain scenarios. For example, push for liability equal to 12 months of fees, if not 24, rather than the default 1 month or s​o. Also, they seek unlimited liability for things like breach of confidentiality or willful misconduct, which is common in contracts. Additionally, ensure mutual indemnification – AWS should indemnify you for IP infringement by their services, for example (they do in the customer agreement, but double-check). These negotiations can be tough – AWS isn’t known to give large liability caps – but even a moderate increase is better than none.
• Data Protection Addenda: If you operate in regulated industries or handle personal data, ensure the contract includes necessary data protection terms. AWS offers a GDPR Data Processing Addendum and will sign Business Associate Agreements for HIPAA. Make sure these are executed. Also consider security commitments – AWS won’t change their shared responsibility model, but you can request language that AWS maintains industry standard security controls (they usually have this in compliance whitepapers). Confirm any logging or audit requirements your compliance needs – e.g., AWS can provide access to audit reports (SOC, ISO) but will not likely allow on-site audits by each customer, so rely on their third-party certifications. Ensure confidentiality clauses cover your data.
• Termination and Renewal Clauses: Negotiate clarity on how the contract terminates and what happens after. Prefer contracts that end after the term (no automatic renewals of commitment). If you allow auto-renew, cap it in the short term and include a notice period. Additionally, consider a termination assistance clause if AWS is a critical supplier – that is, AWS would reasonably help (perhaps billable) in migrating services out for a period after termination. While you may never need that, it’s good to agree that AWS won’t suddenly cut off access if you decide to transition at contract end (typically, you’d roll to on-demand rates if there is no new contract, but clarify this in writing). For renewals, try to get a price hold on any custom discount for a short window after contract expiry while negotiating the next one, so you aren’t pressured by a looming price jump if talks run long.

Common Pitfalls:

• Overlooking SLAs Entirely: Some assume AWS is infallible and never even review SLA documents until a major outage happens. Then, they realise the credit covers a tiny fraction of their business loss. Don’t be that company – examine AWS SLAs upfront and decide if you need additional safeguards. Also, a pitfall is not claiming SLA credits: AWS won’t always proactively give them; you often must submit a claim. Have a process to do this if an outage qualifies.
• Accepting One-Sided Liability: Simply clicking through AWS’s standard contract without considering the implication that AWS’s liability is practically nil (beyond service credits) is risky. If your use of AWS is non-critical, fine, but if it’s critical, failing to negotiate higher liability or at least be aware of it is a mistake. If AWS doesn’t move on liability, you may need to insure that risk elsewhere (look into cloud outage insurance or ensure your business continuity plans cover it).
• Legal Involvement Too Late: Sometimes, procurement focuses so much on pricing that legal terms are an afterthought addressed at the last minute. This can cause delays or you end up dropping requests. Engage your legal counsel early to identify must-haves so you can introduce them to AWS early in the process. Also be mindful: AWS account managers might not have authority on legal terms – you may need AWS legal involved, which takes time. Not planning for this is a pitfall that can result in a rushed sign-off with suboptimal terms to meet a deadline.
• Not Aligning Contract Terms with Internal Policies: Ensure your AWS contract doesn’t conflict with your internal or regulatory requirements. For example, if you have a policy that vendors must give 30 days’ notice before any material change, but AWS’s agreement allows them to change services with minimal notice, that’s a gap. While you can’t change how AWS evolvesits services, you can ask for notification commitments or have internal monitoring. Failing to reconcile these can create compliance issues.
• Trusting Verbal Assurances: Sometimes sales or TAMs might say “In practice, AWS does X or rarely does Y” to reassure you on a concern that isn’t strongly reflected in the contract. While AWS generally acts in good faith, it always gets important promises in writing. For example, if uptime is critical and the rep says, “We’ve never had that service down more than 5 minutes,” that’s not a contractual guarantee. Don’t rely on non-binding statements.

What Procurement Should Do: Review and negotiate the AWS contract terms, not just pricing. Work closely with legal and risk management teams. Prioritize the areas that matter most – usually SLA, liability, and compliance. Use examples (if available) of peers or industry expectations to bolster your requests (“Our policy and common industry practice is 12 months liability coverage​, so we require this”).

Even if AWS pushes back, you might get some middle ground or at least an acknowledgment of your concerns that can be referenced if issues arise. Document any negotiated deviations or AWS commitments in an addendum or order form. Internally, ensure the operations team is aware of the contract terms – e.g., how to claim SLA credits, what data security measures AWS has contractually committed to, etc. Keep a summary of key terms handy.

At renewal time, use past performance to adjust terms: if AWS met all SLAs, that is fine; if they had issues, maybe push for stronger terms as a condition of renewal. Also, leverage your spend – a larger customer might get more willingness from AWS to tweak Ts&Cs. If AWS truly doesn’t budge on a critical point, consider if you need insurance or technical mitigations to cover that risk.

Communicate to leadership what risks you accept by using AWS (they may be comfortable with the,m given AWS’s reputation, but they should know).

Ultimately, ensure the contract strikes a balance of protecting your company’s interests while remaining acceptable to AWS, cementing not just a cost-effective but also a *secure and well-governed cloud partnership​.

13. Utilize AWS Credits and Incentive Programs

Overview: AWS offers various incentive programs to encourage adoption and expansion. These include promotional credits, migration funding programs, and collaborative investment initiatives (like the AWS Migration Acceleration Program, or MAP).

Such programs can offset costs in the short term – for example, AWS might provide a certain amount of credits to help migrate a workload or as an incentive in a negotiation. There are also credits for specific purposes (startups get Activate credits, research institutions, etc.).

For enterprise procurement, maximizing these incentives can significantly improve your cloud ROI, especially for one-time migration or transformation projects. It’s essentially “free money” or co-investment that should not be left on the table. However, credits are temporary, so they must be leveraged wisely and factored into long-term planning.

Best Practices:

• Tap into Migration Acceleration Program (MAP): If you are moving significant on-premises infrastructure to AWS, AWS’s MAP can provide service credits or partner support funding. Typically, AWS will fund a percentage of migration costs (sometimes 25% or more) to reduce the initial burde​n. Work with your AWS account team to get an assessment – they might require a business case or use of certain AWS services/partners. Ensure this is included in your negotiation – for example, “We plan to migrate 100 servers; we expect AWS to provide MAP credits covering $X of that effort.” This can be a huge savings in year 1.
• Negotiate Upfront Credits in Contracts: As part of an EDP or large deal, you can often negotiate a pool of AWS credits as a signing bonus. For instance, AWS might agree to provide $100k of one-time credits to be used in the first few months or to offset specific projects. These are effectively extra discounts beyond the percentage – use them to kickstart new initiatives or cover double-spending during migrations (when you temporarily pay for on-prem and cloud). When negotiating, frame it as “we need help to facilitate moving Service A to AWS, a credit of $X would allow us to proceed.” It’s not uncommon for large customers to receive upfront credits or training credits as part of a renewal deal. Get it in writing and ensure clarity on expiration dates.
• Leverage Training and Service Credits: AWS often is willing to provide credits for training programs (e.g., free attendance in an AWS training course or certification vouchers) and professional services workshops. If expanding AWS usage, ask for training credits to skill up your teams – this pays off in better cloud efficiency. Likewise, AWS may offer proactive architecture workshops or well-architected reviews for free (usually included in Enterprise Support) – take them up on these. They can improve your environment and thus make it more cost-effective (AWS’s Trusted Advisor and Well-Architected reviews often find savings​. Maximize any non-cash perks that AWS will include: support upgrades, training, professional services days, etc.
• Coordinate with Partners for Funding: AWS has funds that it can pass through partners (like consulting firms or software vendors) to encourage customer adoption. For example, an AWS consulting partner might be able to do a project for you at half price because AWS subsidizes them. If you’re engaging an AWS Partner Network (APN) firm for a deployment, ask if AWS funding programs are backing it. Often, partners have to apply, but procurement can encourage using those programs. This way, AWS covers part of your partner’s bill. Similarly, if adopting a third-party software from Marketplace, sometimes AWS or the ISV might have a credit (e.g., “Get $10k in AWS credits if you deploy XYZ security appliance”). Always inquire – AWS solutions architects and partners will know if such incentives exist.
• Track and Optimize Credit Usage: Once you receive credits, manage them actively. Assign someone (FinOps or cloud PM) to monitor credit balances and expirations. Prioritize using credits on net-new or exploratory work (so regular operations aren’t artificially cheap and then jump in cost when credits expire). If credits have an expiry date, schedule workloads or testing to consume them fully by then – it might be rational to temporarily shift some usage to take advantage of credits. Also, factor in the “credits burn” when forecasting spend; know when they’ll run out to avoid surprises in the budget.

Common Pitfalls:

• Credits Masking True Spend: Relying on promotional credits without planning what happens after expiration. A classic pitfall is getting $200k in credits for year 1 of a project and then year 2 hits, and your AWS costs jump dramatically. If the business didn’t plan, this would become a budget crisis. Avoid this by projecting costs with and without credits and communicating the “normalized” run-rate to stakeholders. Treat credits as one-time savings, not a permanent reduction.
• Not Meeting Credit Conditions: Some credits come with strings – e.g., MAP credits might require completing certain milestones or using an AWS-certified partner. A pitfall is not reading the fine print and accidentally invalidating the credits. For instance, MAP might disperse credits after migration is complete; if you never fully migrate because of a change in plan, you might lose them. Ensure you understand any requirements (like providing AWS with before-and-after reports). Also, many credits have expiration dates – not using them in time is a direct loss.
• Overestimating AWS Goodwill: Assuming AWS will always throw in credits to solve issues. Credits are a tool, but AWS has become more structured in how it gives them. A pitfall is expecting, for example, “AWS had an outage, they’ll give us free service credits beyond SLA” – generally, they stick to what the SLA states unless a very unique circumstance. So, consider SLA credits your primary remedy (which is why negotiating strong terms is important). Use credits proactively for planned initiatives, not as an ad-hoc bandage.
• Unaware of Available Programs: Multiple AWS funding programs (MAP for migrations, MAP for Windows/SQL migrations, modernization credits, startup credits, etc.). A pitfall is not knowing and therefore not asking. AWS may mention them, but procurement should also research and ask peers. If you moved a lot of Windows to AWS, did you tap into their optimization credits? Missing such programs leaves money on the table.

What Procurement Should Do: Aggressively pursue AWS incentive programs as part of your cost optimization arsenal. In every negotiation or quarterly business review, ask AWS, “What programs or promotions can we take advantage of in the next period?” Make it a standard question.

When planning cloud initiatives, involve AWS early to explore funding – for example, if you plan a big data center migration next year, signal that to AWS and solicit a MAP proposal. Keep an inventory of credits awarded and their usage. Also, coordinate with finance to treat credits properly in budgeting (usually, you’d budget gross costs and show credits as an offset, to be transparent about actual usage cost).

Use credits to facilitate internal approvals: e.g., “AWS will subsidize 30%, making the business case more compelling.” Ensure internal awareness that these are finite – perhaps create a separate line in reports for “AWS Credits Applied” so everyone sees how incentives offset the bill. Finally, calibrate your relationship with AWS: they are more likely to extend generous credits if they see a long-term growth opportunity.

So share your roadmap (under NDA) to justify why AWS should invest credits in you (“we plan to launch X, which will significantly increase spend; credits now will speed that up”). This aligns incentives. In summary, treat AWS like a partner that can co-invest in your success – capture all the credit and funding opportunities to reduce costs and accelerate projects while being mindful of their limitations.

14. Maximize AWS Support and Account Management Resources

Overview: When you’re a significant AWS customer (especially with Enterprise Support), AWS assigns account management and technical resources to help you succeed. This includes Technical Account Managers (TAMs), solutions architects, support engineers, and potentially specialist teams for your industry or use case.

Fully utilizing these value-added services can improve the your AWS usage’s performance, reliability, and cost-effectiveness. Essentially, you’re paying for more than raw infrastructure – you’re paying for AWS’s expertise. Procurement should ensure the organization is extracting maximum value from these services, which justifies the support costs and continuously optimizes the environment.

A strong collaborative relationship with AWS’s account team turns them into allies who can advocate for you internally and provide insights that benefit your sourcing strategy (like upcoming discounts or product roadmaps).

Best Practices:

• Engage in Regular Business Reviews: Set up structured Quarterly Business Reviews (QBRs) with AWS, where your key stakeholders (IT, finance, procurement, TAM, account manager) meet to review the past quarter’s usage, costs, achievements, and upcoming need​s. Use this forum to review open issues and ensure AWS follows through on any promises. QBRs keep AWS accountable and keep you informed about their plans (often, AWS will share product roadmaps or new features that could help you). It’s also a chance to discuss optimization opportunities identified by AWS’s team and the status of ongoing credits or programs. Make these meetings strategic – not just support tickets, but aligning AWS services with your business objectives (they often bring a “Customer Success Manager” or similar to).
• Demand Architectural Guidance and Reviews: AWS offers programs like Well-Architected Framework reviews and has solution architects assigned to your account. Schedule periodic deep dives into your architecture with them. Have AWS validate that your setups follow best practices for cost optimization, security, and performance. They might, for instance, point out that you can switch to a newer instance type for better price/performance or that you have unattached EBS volumes costing money. Take advantage of Trusted Advisor (part of Enterprise Support), which provides automated checks on your account, and have AWS experts walk through the findings with your tea​m. The TAM can also coordinate specialist architects (database experts, etc.) to consult on particular workloads. Essentially, treat AWS’s brainpower as an extension of your team – you’re paying for it via support fees, so utilize it to continuously improve and save money.
• Escalate Issues and Use AWS’s Chain of Command: Don’t suffer in silence if you encounter any serious service issues or unmet needs. Use the TAM to escalate within AWS – they can bring in senior support engineers or service team members. If your TAM or account manager isn’t effective, know that AWS has an escalation path: you can involve an Enterprise Support manager or even AWS senior management for critical issues. AWS often responds well when customers professionally push for resolution. Also, if you feel something in the AWS platform is lacking, ask your account team to submit a feature request on your behalf – AWS service teams prioritize features partly based on big customer asks. Having a voice in AWS’s development (e.g., joining customer advisory boards or beta programs) can shape the service to better meet your needs.
• Maintain Executive Sponsorship: Ensure there are executive-level connections between your company and AWS. For large enterprises, AWS usually has a senior account executive or even an executive sponsor who periodically checks in. Arrange at least an annual executive meeting (your CIO/CTO with AWS counterparts, possibly AWS high-ups if you’re big enough). In those meetings, discuss strategic direction, how AWS can better support you, and recap any major successes or concerns. Executive relationships can be crucial if you need a favor or a quick turnaround on something (like expediting a contract or getting an exception approval). AWS is likelier to go the extra mile if its executives are engaged and see you as a long-term strategic partner, not just a customer number.
• Collaborate on Innovation: Use AWS’s interest in your success to your advantage. If you have ideas for new solutions or want to try AWS’s latest services, involve them. They might provide free Proof-of-Concept support or credits (linking with #13) and technical guidance. For example, if you’re considering implementing AI/ML, AWS could bring in a Machine Learning specialist to do a workshop with your team and show how to do it cost-efficiently on AWS. By involving AWS in your innovation projects, you benefit from their expertise and tie your success closer to them, which they will recognize in future negotiations by treating you favorably (because you’re showcasing AWS’s capabilities). According to one strategy, communicate broader business requirements and see how AWS can assist beyond just infr​ – e.g., training programs, go-to-market support if you are building a product on AWS. They may have programs for that.

Common Pitfalls:

• Treating AWS as Just a Vendor, Not a Partner: Some companies maintain a very arm’s length relationship, only engaging AWS when there’s an issue or at renewal. That can result in missed opportunities. If AWS isn’t involved, they might not fully grasp your needs, and you might not leverage their help. The pitfall is thinking, “We’ll just use AWS tech and not talk to the humans.” Cloud success at enterprise scale often requires human collaboration.
• Underutilizing the TAM: A TAM is often underused when companies only open reactive tickets and ignore the TAM’s proactive outreach. If your TAM offers to do an analysis or coordinate a meeting and you never take it, you lose value. Another pitfall is not inviting the TAM to key internal meetings where they could help. TAMs can sometimes attend your internal ops reviews or planning sessions (on request)—don’t isolate them; use them as an internal advocate with AWS knowledge.
• Not Measuring Service Quality: Without metrics, you may not realize if AWS support quality is slipping or if certain requests have been outstanding for too long. A pitfall is failing to track support ticket resolution times, frequency of incidents, or architecture improvement recommendations made vs. implemented. By measuring these, you can objectively discuss with AWS where to improve. If you never give feedback (positive or negative) on support, AWS might assume the status quo is fine. When negotiating renewals, having data on “AWS helped reduce our severity-1 incidents by X%” or conversely “we had Y incidents above SLA” strengthens your position either to praise (and justify continued partnership) or to push for changes.
• Ignoring AWS Product Announcements: AWS constantly releases new services and features (re: Invent and throughout the year). A pitfall is not leveraging your account team to stay on top of relevant announcements. For example, you might be manually doing something that AWS just automated in a new feature. While AWS has blogs, your account team can highlight the ones that matter to you. If you don’t engage them or attend their webinars, you might keep using an older, more expensive method while a new cost-saving feature is available.
• One-Sided Communication: Only contacting AWS to complain or only to ask for discounts at renewal is a pitfall. That can strain the relationship. Conversely, only passively listening to AWS sales pitches without communicating your priorities is also bad (they might push things you don’t need). Aim for a balanced dialogue. Share successes (e.g., “We improved our user traffic by X using AWS – thanks for support”). Share concerns early. Make it a partnership ethos: you both win when AWS provides value for cost.

What Procurement Should Do: Foster a culture of active vendor management for AWS. Procurement can coordinate the QBRs and ensure the right people attend. Draft an agenda with strategic items (not just technical, but cost optimization and contract foresight).

Keep minutes of these meetings and track action items, including those AWS commits to. If AWS promised something (like a cost savings analysis), follow up. Encourage internal teams to reach out to AWS for help rather than trying to solve everything alone (with the caveat of cost-awareness). If there’s hesitation to involve AWS (perhaps engineering fearing a sales push), procurement can mediate by framing it: “AWS is part of our extended team to solve this problem efficiently.”

Also, ask AWS for account reviews before renewal time – e.g., 6–9 months out- for a summary of how they’ve supported you and where improvements lie. This sets the stage for the negotiation (they essentially state their value prop, and you have a basis to agree or note gaps). During negotiations, acknowledge good support from AWS (if true) – it builds goodwill – and then segue into areas to address.

Finally, procurement should ensure escalation paths are known: know your AWS account manager’s boss and their boss if needed. In a crisis, be ready to call those numbers.

By deeply engaging AWS’s support and account resources, procurement helps continuously optimize the cloud environment. It keeps AWS invested in your success, which pays dividends in cost efficiency and smoother negotiation.

15. Embed Cloud Governance and FinOps Practices

Overview: Cloud spend is not a one-time set-and-forget — it requires ongoing governance to ensure costs align with business value. FinOps (Cloud Financial Management) is the practice that brings financial accountability to the variable spend model of clou​d. By embedding FinOps principles, procurement and finance can continuously optimize cloud usage in collaboration with engineering.

This includes budgeting, utilization tracking, cost optimization initiatives, and aligning cloud spend with business KPIs. Strong governance ensures that all the negotiated discounts and best practices translate into actual savings and prevent cost creep.

Procurement should champion and support FinOps adoption as it directly impacts the ROI of AWS contracts.

Best Practices:

• Establish a Cross-Functional FinOps Team: Create a team or at least a working group that includes finance/procurement, engineering, and product owners to manage cloud costs​. This team should meet regularly to review cloud spend, identify optimization opportunities, and decide on actions. Procurement can co-lead this with IT. The FinOps team ensures shared responsibility – engineering provides context for usage, finance provides cost targets, and they find solutions (like rightsizing or reservation purchases). This breaks silos: engineers get cost transparency, and finance understands usage drivers.
• Implement Budgeting and Chargeback: Give each product/team a cloud budget (monthly/quarterly) aligned with overall company budgets. Use the cost allocation (from #6) to track actuals against these budgets. When a team consistently exceeds budget, invokethe FinOps process: investigate why (is demand higher than forecast? Are there inefficiencies?). Likewise, if a team is under budget because of optimizations, acknowledge and possibly reallocate savings to other needs. A chargeback model where each BU “pays” for their AWS usage out of their budget enforces discipline. If chargeback is too aggressive culturally, start with showback – showing them the numbers and what it would mean. The key is to treat cloud resources as not unlimited – tie them to financial accountability.
• Define KPIs and Track Cloud Efficiency: FinOps suggests metrics like the percentage of cloud spend wasted or the unit cost per transaction/service. Choose relevant ones for your business and monitor them. For example, track what percentage of your resources are underutilized (idle instances, oversized instances) as a measure of waste. Another example: cost per customer or user for your cloud infrastructure. By quantifying efficiency, you can celebrate improvements (like reducing waste from 30% to 20% saved $X) and spot issues. Also track coverage of discounts – e.g., what percent of compute hours are at on-demand rates vs covered by RIs/SPs – and aim to maximize coverage. Regularly review these KPIs and adjust strategies accordingly.
• Continuous Optimization Cycle: FinOps is iterative – use tools (AWS Trusted Advisor, third-party optimizers, etc.) to constantly find optimization opportunities. Set up a pipeline where recommendations (terminate unused instances, downgrade storage classes, etc.) are evaluated and implemented if appropriate. Prioritize quick wins (like shutting off dev environments on weekends or rightsizing over-provisioned resources). Over time, these small wins compound. Encourage engineering teams to incorporate cost optimizations into regular sprints (e.g., a story to clean up resources or optimize a query). The FinOps team can feed such backlog items. Treat cloud optimization as an ongoing part of operations, not a one-time project.
• Promote a Cost-Conscious Culture: Through governance, instill the mindset that engineers and product owners are responsible for the cost efficiency of what they build. Provide training on reading AWS bills and understanding cost drivers. Recognize teams or individuals who find innovative ways to save money while meeting goals. Perhaps allocate a portion of realized savings back to teams for reinvestment (this gives an incentive to save). Make cost a visible metric in project dashboards. When everyone sees cost as part of performance, not an afterthought, it becomes a normal factor in decision-making.

Common Pitfalls:

• Lack of Ownership for Cloud Costs: One common pitfall is assuming either IT or Finance will manage cloud costs in isolation. IT may think, “Finance set the budget, we just spend it,” while Finance may think, “IT is watching the usage, we just pay the bill.” This gap leads to overspending. Everyone needs clear roles: engineering owns usage efficiency, finance owns budget guardrails, and FinOps bridges them.
• Delayed Reactions: Unlike fixed infrastructure, cloud costs can change rapidly. A pitfall is treating cloud budget variances on a quarterly or annual cadence—by the time you react, you could be wildly over. If a team spins up expensive resources, waiting until the end of the quarter to notice could burn a lot of cash. FinOps should be as real-time as feasible: monthly or even weekly checks on key metrics and quick actions (e.g., shutting something down next day if found idle).
• Overemphasis on Savings vs. Value: Sometimes, a narrow FinOps focus can lead to friction, such as pushing too hard to cut costs without understanding the impact on performance or delivery. The goal is optimization, not just minimization. If scaling up infrastructure increases revenue or customer satisfaction more than it costs, that can be a good trade. FinOps should help find waste and inefficiency, not prevent legitimate growth. Balance cost discussions with service quality and business outcomes.
• Tool Fatigue: Buying a fancy cloud cost management tool but not integrating it into processes is a pitfall. Fancy dashboards mean little if no one acts on them. It’s better to have a simple report that people use than a complex tool they ignore. Ensure any tool adopted fits your process and team capacity.
• Not Aligning with Engineering Workflows: If cost governance is seen as separate from DevOps workflows, engineers might circumvent it. FinOps should integrate with existing processes (e.g., tagging enforcement via CI/CD, cost checks in deployment pipelines). Failing to do so can make it feel burdensome or easy to ignore.

What Procurement Should Do: In partnership with finance, Procurement should champion FinOps adoption. Secure executive support by highlighting that industry surveys show companies waste nearly 30% of cloud spend on average, and that’s addressable. Position FinOps as the way to maximize ROI on the AWS contract you negotiated.

Help set up the governance structure and ensure the FinOps team has access to detailed billing information (you might need to work with AWS to get CUR reports or detailed billing exports set up). Use procurement’s experience in cost management to contribute to FinOps strategy (e.g., you might spot that an RI purchase would be better than on-demand and push for it).

Additionally, tie FinOps achievements back to procurement wins: for example, “Our FinOps optimizations reduced usage by 15%, which helped us negotiate a smaller commit and avoid overcommitting – saving $X in potential unused spend.” When negotiating

16. Eliminate Wasteful Cloud Spend

Overview: Many cloud expenses often go to waste – idle resources, over-provisioned capacity, or forgotten services that continue to incur charges. Industry estimates show enterprises waste nearly 30% of their cloud spending on avera​ge. Sourcing leaders must aggressively target and eliminate this waste to maximize the value of AWS contracts.

Unlike fixed infrastructure, AWS’s elasticity means teams might liberate resources and forget to turn them off. Implementing processes to continuously find and remove cloud waste ensures that your negotiated discounts aren’t eroded by paying for resources you don’t need.

This consideration zeroes in on the tactical execution of cost optimization within your AWS environment, complementing the broader FinOps governance (see #15) with a specific focus on waste reduction.

Best Practices:

• Identify Idle and Orphaned Resources: Use AWS Cost Explorer, CloudWatch metrics, and tools like AWS Trusted Advisor to flag underutilized resources. Common culprits include EC2 instances running at very low CPU usage, EBS volumes attached to no instance, old snapshots, idle load balancers, and orphaned IP addresses. Create a routine (weekly or monthly) to review these and tag them for action. For example, if an instance’s CPU has been under 5% for a month, consider downsizing it or shutting it off during non-peak hours. Similarly, delete unattached storage volumes or old data no longer needed (or move it to cheaper storage like Glacier). Each of these small clean-ups saves money cumulatively.
• Right-Size Continuously: Ensure that each workload is running on appropriately sized infrastructure. It’s common for teams to over-provision “just in case.” Use CloudWatch or third-party performance monitoring to see actual utilization of instances, databases, etc. Then adjust – e.g., migrate an app from an 8xlarge instance to a 4xlarge if it has never used the larger capacity. Leverage AWS’s recommendations (Trusted Advisor or Compute Optimizer), which suggest instance size reductions or modern instance family moves. Right-sizing can often cut costs 20-50% for that component with minimal performance impact, especially for dev/test or lower environment tiers.
• Schedule Non-Production Resources: Not all environments need to run 24/7. Implement scheduling to shut down development, test, or training servers during off-hours (nights, weekends) when they’re not in use. AWS Instance Scheduler or simple scripts with Lambda/CloudWatch can automate this. By turning things off 70% of the time (e.g., only running 8 am-8 pm on weekdays), you cut that portion of the cost by 70% straight away. Communicate this practice to teams so they design workflows to tolerate nightly shutdowns for non-critical systems.
• Optimize Data Storage Costs: Data can be a silent budget killer if not managed. Apply lifecycle policies to move infrequently accessed data to cheaper storage classes (S3 Infrequent Access, Glacier) and delete no longer needed data (with proper approvals). Compress data where possible before storing or transferring. Also, analyze data transfer patterns (as per #7) – if cross-region data flows generate high egress fees, see if re-architecting or caching can cut that down. Often, caching frequently accessed data (using CloudFront or ElastiCache) can reduce repetitive transfer and compute costs.
• Empower Teams with Visibility and Goals: Make each engineering team aware of their waste metrics. For example, provide a monthly report: “Team A – you spent $50k, of which $15k (30%) looks to be waste (idle resources, etc.).” Then work with them to set reduction targets (perhaps to cut waste in half next month). Tie this into FinOps (see #15) by turning recommendations into actionable tickets or backlog items owned by the teams. When teams see the direct dollar impact of cleaning up, it often motivates action, especially if leadership highlights it. Consider friendly competitions or incentives for teams that achieve the highest optimization rates.

Common Pitfalls:

• Neglecting to Follow Through on Recommendations: Many companies generate many cost optimization reports but don’t implement the changes. This is a pitfall—identifying waste is only half the battle. Ensure there is clear ownership and accountability when executing cleanup tasks. The value is lost if Trusted Advisor flags 100 idle instances and nothing happens. Make it someone’s job (e.g., the FinOps analyst or the engineering lead) to drive these to resolution.
• Overzealous Cutting: While removing waste is good, avoid cutting resources that impact performance or resilience. One pitfall is shutting down “idle” instances that were acting as hot standbys for failover or scaling. Always double-check with service owners before terminating resources – context matters. Implement changes in lower environments first to validate the impact. The goal is to trim fat, not muscle.
• Ignoring Small Wastes: Tiny resources (like a $40/month EIP or a dev t3.small instance) may not seem worth cleaning up. But cloud waste is often the sum of many small leaks. If you have dozens of little unused bits, together they add up. Ignoring these is a pitfall because each is minor – tackle them via automation if possible. For instance, enforce auto-deletion of unattached volumes after 30 days or use AWS Config rules to alert on unused IPs. Over a year, even a few hundred dollars of monthly waste becomes thousands.
• One-Time Cleanup with No Sustained Process: Some organizations do a big one-off cost purge (perhaps before a contract renewal) and pat themselves on the back. But without an ongoing process, waste will creep back in as new projects start and people leave resources running. Treating optimization as a project instead of an ongoing practice is a pitfall. Continuously monitor and periodically repeat cleanup exercises. Make “cost hygiene” a regular operational task akin to security patching or backup verification.
• Lack of Employee Training: If engineers aren’t aware of cost implications, they might inadvertently create waste faster than they remove it. Not educating teams on writing cost-efficient code or using resources wisely is a pitfall. For example, a developer might set a super high autoscaling limit “just in case,” causing dozens of instances to run idle. Training and guidelines can prevent such wasteful configurations up front.

What Procurement Should Do: Integrate waste-reduction initiatives into the procurement and budgeting cycle. When reviewing AWS spend, always ask, “Where can we trim?” and ensure those trims happen. Collaborate with the FinOps or cloud operations team to quantify waste and report on progress to executives – making it visible keeps momentum (e.g., “this quarter we eliminated $100k of annualized waste, which is equivalent to a 5% cost reduction”).

Use contract renewal periods as milestones: do a thorough cleanup before renewing or increasing commitments, so you negotiate based on a lean usage baseline (no point committing to waste). Also, consider writing efficiency clauses into internal chargeback agreements – for instance, business units pay for their cloud usage, including any waste, which incentivizes them to pay attention.

Procurement can also push AWS for help: your TAM or solutions architect can assist in identifying optimizations (AWS has a vested interest in your success, too). When optimizations are made, factor those into forecasting and inform AWS (e.g., “we’ve optimized our environment, so our growth might be lower – thus we seek a smaller commit”).

This signals to AWS that you are a savvy customer managing costs. In summary, procurement should act as a cheerleader and enforcer for eliminating cloud waste – ensuring it’s someone’s job, celebrating the savings achieved, and recalibrating contracts to only pay for value received.

17. Align Internal Stakeholders and Objectives

Overview: A unified internal front is crucial when negotiating with AWS. The vendor can exploit those gaps if different stakeholders (IT, finance, business units) have conflicting priorities or communicate inconsistently with AWS.

For example, if one department expresses urgent need for a service while procurement is trying to hold a hard line on pricing, AWS will sense the urgency and weaken your leverage. Ensuring all internal parties agree regarding cloud strategy, requirements, and walk-away points is key to a successful negotiation.

Moreover, internal alignment prevents unplanned cloud usage or commitments from popping up outside the purview of central procurement. This consideration emphasizes the importance of coordination, communication, and education within the enterprise as you manage the AWS relationship.

Best Practices:

• Form an Internal Cloud Steering Committee: Bring together key decision-makers – CIO/CTO, CFO or finance lead, Head of Dev/Engineering, and procurement. Hash out internal goals and limits before engaging AWS on any major negotiation or initiative. Decide on questions like: What’s our budget? What are our non-negotiable contract terms? What compromises are we willing to make (e.g., longer term for a better rate)? By aligning at the top, you ensure dthat irectives flow consistently. This committee can approve any major cloud spend or architectural shift, preventing siloed decisions.
• Speak With One Voice to AWS: Designate a primary negotiation team (procurement lead, IT lead, etc.) and route all AWS communications through them. Instruct other stakeholders and teams that those inquiries should be deferred to the central team if AWS reaches out to them directly about sales or negotiations. This avoids well-meaning engineers or managers accidentally revealing information (like “we have a tight deadline” or “we have extra budget to use”) that could weaken your bargaining stance. If business units have direct AWS rep relationships (perhaps from earlier days), brief them on what to say or not say during renewal periods. Maintaining a unified front ensures AWS hears a consistent message on needs and constraints​.
• Align on Cloud Requirements and Trade-offs: Internally, reconcile the priorities of different groups. Finance might prioritize cost savings, IT prioritize performance and support, and business units want flexibility or new features. Get these on the table and decide how to balance them as an organization. For instance, if one BU wants a new AWS analytics service, agree on the plan: maybe you’ll pilot it but not commit enterprise-wide until next year, and procurement will negotiate a discount. If finance demands cost cuts, decide which projects can scale down. Present a cohesive requirement list to AWS rather than mixed signals. AWS “can sniff out internal misalignment and will exploit it” – as seen in other vendor negotiations, the same applies here.
• Educate Stakeholders on the Negotiation Strategy: Ensure all internal players understand the game plan with AWS. If your strategy is to appear willing to walk away unless certain terms are met, everyone must uphold that stance in their interactions. Brief executives and project leaders on what the key negotiation messages are (e.g., “we are considering other cloud options”, or “we have strict budget limits”). Also, align on what is not to be disclosed (e.g., don’t volunteer that you have an urgent launch or that you have $X unallocated budget – share such details with AWS only if it serves your strategy). When everyone knows the plan, there’s less risk of someone inadvertently undermining it.
• Coordinate Internal Cloud Usage Plans: Often, different teams plan AWS usage growth or reduction based on their projects. Consolidate these forecasts (as covered in #2) and reconcile them with a budget. Internal stakeholders should agree on one forecast scenario to use in negotiations. This prevents, say, one department telling AWS, “we’ll likely double usage,” while another says, “we need to cut spend” – those mixed messages reduce credibility. Internally decide: are we portraying a high-growth story to get more discounts or a cost-constrained story to keep costs low? Choose a narrative and ensure all stakeholders reinforce it as needed.

Common Pitfalls:

• Executives Going “Rogue” with AWS: A well-intentioned senior exec might bypass procurement and talk directly with an AWS executive, perhaps making informal promises or demands that conflict with the negotiation strategy. For instance, a CTO might express enthusiasm for a new AWS service (“we’re going to use a lot of machine learning!”) while procurement is trying to downplay interest to negotiate the price. This misalignment can be leveraged by AWS (“your CTO wants this, why hesitate?”). Avoid this by pre-briefing any executive interactions with AWS and debriefing afterwards.
• Departmental Cloud Deals on the Side: If internal alignment is poor, a business unit might sign its own small AWS agreement or purchase via credit card because it felt central IT was too slow or restrictive. This undermines enterprise leverage (fragmenting spend) and can create contractual conflicts. It’s a pitfall when internal governance isn’t enforced. Solve it by strong policy (all cloud spend must go through central procurement) and by providing a reasonable level of internal service so that BUs aren’t tempted to circumvent it.
• Mixed Objectives = Compromised Outcomes: If one group is pushing for maximum discount and another is pushing to adopt cutting-edge AWS tech ASAP at standard pricing, the result can be a muddled negotiation where you get mediocre discounts and overcommit to tech you might not need. Internal conflict can lead to settling for the lowest common denominator rather than achieving the best. This is why internal resolution of objectives is critical – present AWS with clear, prioritized objectives, not a laundry list of contradictory asks.
• Resistance to Unified Process: In some organizations, historically, each unit did its IT procurement. Moving to a consolidated approach can cause turf battles or fear of losing autonomy. If stakeholders aren’t brought on board (i.e., shown the benefits of a united front), they may drag their feet or still engage AWS separately. This pitfall can be mitigated by executive mandate and demonstrating wins (like “because we combined our needs, we achieved a 20% better discount, saving $Y for all departments”).
• Internal Miscommunication: It’s possible to accidentally mis-communicate internally as well – e.g., finance tells IT “don’t overspend,” IT interprets as “no capacity growth,” and tells AWS something overly restrictive that hampers negotiation flexibility. Or an engineering team may hear about a possible multi-cloud move and stop optimizing AWS, thinking that investment will shift (when that was just a negotiation tactic). To avoid such confusion, clearly communicate what is part of the negotiation strategy versus actual operational decisions. Keep negotiation bluffing within the negotiating team – don’t alarm the rank-and-file with talk of moving off AWS unless that’s a firm plan.

What Procurement Should Do: Orchestrate the internal alignment like a critical project. Use your facilitation skills to get input and buy-in from all stakeholders before dealing with AWS.

Schedule prep meetings well in advance of renewals to set objectives and roles. Create an internal brief or playbook for the AWS negotiation that outlines our unified position, key messages, and fallback options, and circulate it to stakeholders (especially anyone who might talk to AWS).

Direct the flow of information: if AWS needs to talk to someone for technical validation, ensure a procurement or FinOps person is in that meeting, too. Internally, keep leadership informed of negotiation progress so nobody goes off to do their lobbying with AWS out of impatience.

Treat your internal organization as Team One – get your team dynamics sorted out before engaging the opposing team (AWS). When well-aligned, you’ll negotiate from a position of strength and avoid costly internal slip-ups.

18. Maintain Negotiation Leverage and Alternatives

Overview: Even after entering a partnership with AWS, it’s crucial to maintain leverage in all negotiations. AWS, like any vendor, will be most flexible on pricing and terms when it feels competitive pressure or uncertainty about your next steps.

This means procurement should cultivate credible alternatives and a willingness to say “no” or delay if the terms aren’t right. Leverage comes from options, whether considering another cloud provider, extending on-premises capacity, or simply being ready to walk away from non-essential add-ons.

Additionally, controlling the timing and information flow in negotiations can prevent AWS from gaining the upper hand. This consideration focuses on tactics to preserve bargaining power throughout your AWS relationship.

Best Practices:

• Benchmark Regularly and Entertain Bids: Periodically (at least before each renewal), benchmark AWS’s prices and offerings against the market. This could involve getting informal quotes from Azure/GCP or using third-party benchmark studies. Conduct a competitive RFP for your cloud workload or a portion of it if feasible. Even if you lean towards staying with AWS, having proposals from others gives you concrete data to ask AWS for better terms. Let AWS know (subtly) that you are evaluating alternatives – for example, “Our board has asked us to compare AWS with other options this year.” A credible threat of moving some workloads to another provider motivates AWS to offer a concession.
• Control the Negotiation Timeline: Don’t let AWS dictate deadlines. Start negotiations early (as noted in #19) and plan your timeline of key milestones. If AWS tries to rush you with a “quarter-end” sales push, be willing to bypass that deadline – often, AWS will come back with similar or better offers even after an internal quarter cutoff, especially if they sense you won’t be pressured. By contrast, if you have leverage (like multiple bids or the ability to defer a project), you can afford to wait for AWS to improve an offer. The power to delay or say “we’ll revisit later” is leverage. Ensure your internal stakeholders are aligned that waiting is an option (so no one caves due to impatience or false urgency).
• Keep AWS Guessing (to an extent): In negotiations, information is power. Share only what AWS needs to know to give you a good deal, and be cautious about revealing hard constraints like exact budget limits or drop-dead dates. For instance, if you must sign by Q4 for a project, try not to let AWS know that – otherwise, they know you have no choice but to agree by then. Instead, be non-committal or mention you have various scheduling options. Internally, instruct team members not to volunteer internal deadlines or how badly a particular service is needed. If AWS doesn’t know your absolute must-haves, they’ll be more inclined to offer their best terms across the board rather than hold firm on something knowing you can’t drop it. (Of course, maintain honesty – don’t lie – but you don’t have to put all your cards on the table.)
• Leverage Multi-Source Strategy: Even if you primarily use AWS, consider maintaining a small footprint in another cloud or keeping some capacity on-premises (hybrid). This isn’t just technical – it signals to AWS that you have alternatives ready. For example, if AWS pricing isn’t favorable, you could say, “We’ll run this new workload in our private cloud for now,” and you truly have that environment available. Likewise, use the existence of other contracts: “We also invest in Azure for some functions, so AWS needs to stay competitive for us to consolidate more here.” This keeps AWS’s competitive instincts engaged.
• Use Internal Deadlines as Leverage: If you are under less time pressure than the AWS sales team, you can use their quotas as leverage. Sales reps often want to close deals by quarter or year-end. If you’re unsatisfied with an offer by mid-Q4, you might say, “We’ll have to push this to next year’s budget.” That can spur AWS to improve terms to close it sooner (assuming they want it in this year). Be careful that this doesn’t backfire (you don’t want to lose an offer). Still, it can be a powerful negotiating chip if you genuinely have the flexibility to postpone a deal.

Common Pitfalls:

• Showing Your Hand Too Much: A classic pitfall is inadvertently giving AWS insight into your constraints. For instance, a project manager eagerly tells the AWS rep, “We need to launch by next month” – now AWS knows you are against the wall time-wise and might offer a less favorable deal, figuring you’ll accept. If they know a large budget is approved, they may not feel pressure to offer a deep discount. Guard such information. Also, be mindful of what AWS can observe: sudden huge increases in your usage can signal them that you’re committed deeply, potentially reducing their incentive to offer discounts.
• Empty Threats: Saying “We’ll move to Azure” with no real plan or intent can harm credibility. AWS likely knows the state of your architecture (they see what services you use). If you’re heavily invested in AWS-specific services and have given no prior indication of multi-cloud, a sudden threat to leave might ring hollow. That doesn’t mean you can’t negotiate hard – just back it with substance (e.g., maybe you can credibly threaten to shift new projects to other clouds, even if core stays). Avoid bluffing that can be easily called out.
• Overemphasizing Relationship Over Competition: Some organizations become very cozy with AWS account teams and hesitate to play hardball because “we have a great relationship.” While partnership is important (see #20), remember AWS is a massive company, and its reps have targets. A pitfall is assuming the nice lunches or friendly chats will automatically translate tothe best pricing. You still need to assert competitive tension – AWS responds to that professionally. Don’t hesitate to ask for bids or better terms out of fear of straining the relationship; a true partner will understand you have to consider your company’s interests.
• Rushing into Unfavorable Terms: If AWS presses urgency (“prices might go up next month” or “this promo won’t last”), don’t let that force a quick agreement unless you’re truly satisfied. If you take a bit more time, another vendor or a creative solution might yield a better outcome. A pitfall is accepting a subpar deal because you felt there was no alternative on short notice – often, with a little delay, alternatives surface, or AWS improves the offer.
• Not Utilizing “No” Power: Sometime,s procurement teams must reach an agreement because AWS is so central. But saying “no” or pausing negotiations is a valid strategy for unmet demands. Many have found that walking away (even temporarily) can lead to a better second offer. Pitfall: thinking “we have to sign whatever they give.” Unless it’s an critical service with no substitute, you usually have more leverage than you think – use it by being willing to reject proposals that don’t meet your requirements.

What Procurement Should Do: Keep competitive pressure on AWS at all times. Do market checks, engage with other cloud providers’ enterprise teams (even if just exploratory), and ensure AWS knows you are a discerning customer with choic​e. During negotiations, manage information carefully – perhaps create a unified communications plan about what to reveal and what to hold back.

Train anyone interacting with AWS on this plan (similar to #17’s alignment). Don’t be afraid to orchestrate an RFP – even if AWS ultimately wins, the process can extract better concessions. In discussions, ask questions that hint you know the market: “Azure is offering X in their commit program – can AWS match that?” If AWS believes it’s in a competitive scenario, you’ll see more flexibility.

19. Prepare Early for Renewals and Expansion

Overview: Timing is a critical element in strategic sourcing with AWS. Starting renewal and expansion discussions well before contract expiration gives you the luxury of thorough analysis, competitive exploration, and iterative negotiation without the pressure of a ticking clock​.

Too many companies engage AWS late and rush into a less favourable deal as the deadline looms. Early preparation flips the script – AWS then faces the pressure to propose attractive terms to secure your commitment in a timely manner.

Additionally, early planning allows procurement to coordinate internal approvals and, if needed, line up alternative solutions before the old contract lapses. This consideration emphasizes proactivity: treating cloud renewals not as a last-minute IT task but as a strategic project that begins many months (even a year) before the due date.

Best Practices:

• Kick Off Renewal Planning 6–12 Months Ahead: For a large AWS agreement, begin internal renewal prep at least half a year before it expires (and a full year ahead for large enterprises or complex deals). Industry advisors often recommend engaging AWS **6–12 months before contract end​. This lead time is especially needed if you intend to do an RFP or need to evaluate architectural changes. Create a timeline with milestones: by T-6 months, internal requirements set; T-5 months, initial discussion with AWS; T-3 months, finalize negotiation. Starting early ensures you own the schedule and can conduct multiple negotiation rounds if needed.
• Conduct a Thorough Usage and Contract Review: Early in the renewal cycle, deeply dive into your current AWS usage, spend patterns, and how well the current contract served you. Identify any shortcomings: maybe you needed a new service that wasn’t in the commit last time, or you overcommitted on an area you didn’t use. Use this analysis to define what you want to change in the new contract (commit levels, added services, better pricing on certain high-cost items, etc.). Also, review any operational issues – support responsiveness, SLA credits owed, etc. – so you can address them in negotiations (e.g., “We had three SLA breaches with minimal credit; we’ll need improved terms there”). Know your current contract and environment so you go into renewal talks with a clear list of demands and fixes.
• Engage Stakeholders Early: Loop in all relevant stakeholders (finance, IT leadership, business units) on the renewal timeline and gather their input well in advance (reflecting alignment per #17). This ensures the budget is earmarked and there are no surprises (“Wait, we didn’t plan for a 3-year prepay!”). Early engagement of finance is particularly key if you might consider options like upfront payments or a larger commitment – these often need CFO approval. By having these discussions months ahead, you can shape internal consensus on the goals of the new contract and obtain preliminary approvals for different scenarios.
• Allow Time for Multiple Iterations and Approvals: In complex deals, expect that the first offer from AWS might need refinement. With an early start, you can counter-propose, perhaps involve higher AWS management, and hammer out details. Also, your legal review may take time – starting early means you’re not forced to accept terms due to deadline pressure. Build in the buffer for legal negotiations and any procurement board approvals at your end. Plan for slippage – even if you target finishing one month early, if it slips to the expiry date, you’re still okay. It is far better to finish early than to negotiate the night before expiration.
• Coordinate Expansion Discussions with Renewals: If you foresee major new cloud initiatives or significantly increased usage next term, fold those into the renewal negotiations rather than handling them separately later. For example, if you know a big data project is coming in Q2 next year, mention it in renewal talks and leverage it to get better pricing/credits now (in exchange for committing to AWS for it). AWS will appreciate the long-term view and often give concessions upfront for future growth commitments. Conversely, if you expect to scale down or optimize (as in #16), adjust your commit in renewal accordingly. Renewal time is your best chance to realign contract terms with plans, so gather those plans early from stakeholders. Don’t lock into an outdated pattern; proactively shape the new agreement around upcoming needs.

Common Pitfalls:

• Starting Negotiations Too Late: The worst-case scenario is initiating talks only a month or a few weeks before expiration. This often results in a rushed renewal at status-quo terms because there’s no time to negotiate thoroughly. AWS sales know when you’re desperate and can hold firm. Late starts also mean you have no time to pursue alternatives if AWS’s offer is high – you’re stuck. Avoid the “panic renewal” at all costs by planning. As Redress Compliance noted, waiting until the last minute limits your leverage and can lead to unfavorable terms.
• Missed Deadlines Internally: Sometimes procurement might start early but still miss key windows – e.g., forgetting that your budgeting cycle finalizes 3 months before renewal, so if you don’t have a deal by then, funding is uncertain. Or missing AWS’s fiscal year-end if you wanted to leverage it. Failing to align the negotiation timeline with internal and AWS timelines is a pitfall. Mark and manage all relevant dates (internal budget lock, AWS year/quarter ends, etc.).
• Renewal Creep without Review: Another pitfall is auto-renewing or extending contracts by inertia without re-evaluating them. Perhaps you had a small initial commit that keeps renewing annually; you might be missing out on a larger EDP that would yield more savings, or vice versa, stuck in too high a commit from a previous growth spurt. Renewal time should always trigger a fresh analysis (don’t just roll over). Even if you plan to continue the same volume, negotiate something – price reductions due to AWS’s lowered costs, a shorter term if you need flexibility, etc. Never let a renewal go by as a rubber stamp.
• Forgetting to Renew Support or Subsidiary Agreements: Often, the main AWS commitment is front-of-mind, but ensure that related agreements (Enterprise Support, Marketplace private offers, partner agreements) are renewed or aligned. It’s a pitfall to renew your EDP and then realize your Enterprise Support lapsed or auto-renewed at a high rate because you didn’t negotiate it concurrently. Align the term dates of support with the main contract if possible so that you can tackle them together.
• Internal Change Not Communicated: Perhaps since the last contract, your company’s strategy changed (e.g., a new mandate for multi-cloud, or a cost-cutting initiative). If procurement doesn’t gather and reflect those changes in the renewal plan, you might negotiate based on old assumptions. For example, not knowing the business wants to go multi-cloud could lead you to over-commit to AWS. This pitfall is addressed by the stakeholder alignment in #17 and early info gathering – incorporate any strategic shifts into your renewal approach well in advance.

What Procurement Should Do: Project-manage the renewal process proactively. Treat the renewal like a major sourcing event: set a schedule, assign tasks (usage analysis, internal requirement gathering, legal review), and track progress. Put a reminder in your calendar at least 6–12 months before the AWS contract ends to kick this off.

Communicate this timeline to AWS, too: for example, inform your account manager, “Our goal is to have next year’s agreement finalized by [date]” – this sets expectations that you won’t be going down to the wire (which prompts them to engage resources accordingly).

Use early discussions to ask AWS for new programs or offerings that might benefit you (“What can we take advantage of in a new deal that we didn’t have before?”). Also, renew internally before you renew externally: secure management approval on the desired outcome (budget for a multi-year commitment, etc.) so that when you negotiate, you have the authority to agree within those parameters. If needed, arrange executive-to-executive meetings early to smooth any high-level concerns, not at the last second.

Lastly, use the time to get competitive quotes and do rigorous cost modeling; AWS might counter that time is being wasted, but stick to your plan – better a slightly delayed deal on good terms than a fast one on bad terms. By preparing methodically and early, procurement can confidently approach AWS renewals and avoid last-minute compromis​e.

20. Build a Long-Term Collaborative Partnership

Overview: While maintaining leverage and a hard negotiation stance is important, an equally vital consideration is fostering a strategic partnership with AWS. The best outcomes arise when AWS truly understands your business and is invested in your success, at renewal time and continuously.

This partnership mindset means working with AWS as a vendor to squeeze on price and as a collaborator to drive innovation and value. It involves open communication, joint planning, and leveraging AWS’s resources (expertise, programs, innovation roadmap) to your advantage.

A collaborative relationship can yield early access to new features, tailored solutions, and responsive support that ultimately benefit your organization’s objectives. The tone you set – cooperative yet rigorous – will influence how AWS engages with you beyond the contract signature.

This final consideration ties all the others together by ensuring the procurement-vendor relationship with AWS is managed in a mutually beneficial way for the long run.

Best Practices:

• Establish Executive Sponsorship and Governance: Identify executive sponsors on both sides. Within your company, have a C-level champion for the AWS relationship (e.g., CIO) who regularly connects with AWS senior leadership. Ask AWS to assign an executive sponsor to your account to check in on the partnership’s health. Conduct annual or semi-annual executive briefings to discuss strategic direction (beyond day-to-day projects). In these meetings, share your company’s tech roadmap and business growth plans (under NDA) so AWS can align its support and maybe include you in a relevant beta progra​m. In turn, ask AWS to share insight into their product roadmap regarding your needs (they often will, privately). This high-level alignment ensures both parties work toward common goals and prevents surprises.
• Be Transparent about Objectives: Cultivate open communication with AWS about your long-term objectives and concerns. For example, if cost reduction is a major corporate initiative, convey that to AWS early, not just as a bargaining chip, but so they can help (perhaps by suggesting architectural changes or introducing cost management tools). If you plan to expand into new regions or launch new products on AWS, involve them in early planning – they might provide design assistance or commercial incentives to support it. By being clear about what success looks like for you (e.g., “We need to handle 2x traffic in two years at the same cost per user”), AWS can tailor solutions and proposals to help meet those goals. A collaborative AWS team will work with you on optimization, not just try to sell more.
• Leverage AWS Innovation Programs: AWS has programs like Innovation Workshops, immersion days, hackathons, and more. Take advantage of these to solve business challenges in creative ways. For instance, engage AWS’s solution architects or even their ProServe (professional services) in co-designing a prototype for a new idea – they often do short engagements at low/no cost for strategic customers. Participate in AWS customer advisory boards or user groups to exchange ideas and give feedback on AWS services – this not only influences AWS’s development in your favor but also builds relationships with AWS product teams. The more embedded you are as a trusted customer, the more AWS will go to ensure you are satisfied (which can translate to better support, early features, etc.).
• Hold AWS Accountable – Constructively: Partnership doesn’t mean being a pushover. Keep AWS accountable to their commitments (support SLAs, delivery of credits, etc.), but handle issues constructively. If something goes wrong (e.g., an outage or missed deliverable), engage AWS in a post-mortem discussion: what will they do to prevent this next time? Ask for appropriate remedies (service credits, additional support) and focus on solutions. When AWS sees you approach problems collaboratively – “how do we fix this together” – they’re often more responsive than if it’s purely adversarial. Maintain a record of issues and resolutions and periodically review them with AWS at QBRs to ensure continuous improvement. This balanced approach builds respect: AWS knows you won’t let things slide, but you’re also fair and solutions-oriented.
• Celebrate and Publicize Mutual Wins: When the partnership yields positive results (cost savings, performance gains, business growth enabled by AWS), acknowledge it. Internally, credit AWS teams who helped – this encourages your stakeholders to keep collaborating with them. Consider participating in joint case studies or press releases if appropriate (only if you’re comfortable). Being featured as a success story in AWS’s marketing can give you leverage (AWS greatly values customer references), and it fosters goodwill. Of course, only do so if the story truly is positive. By highlighting successes, you reinforce the value of the partnership to both sides’ leadership, creating a virtuous cycle of support and investment.

Common Pitfalls:

• Treating AWS as an Adversary Only: If every interaction with AWS is purely combative (only about discounts, SLA failures, etc.), you miss out on the collaborative aspect. AWS might fulfill the contract, but not go beyond – you become just another account. A pitfall is failing to engage AWS’s creative resources; you might leave innovation money on the table or not hear about beneficial programs. Balance tough negotiation with cooperative engagement in operations.
• Over-Reliance on Relationship: Conversely, a pitfall is to become too cozy and lose critical distance. Don’t accept proposals just because you “trust AWS” – always verify and validate against your analysis. A strong relationship should augment, not replace, due diligence. Also, ensure the partnership doesn’t slide into complacency – e.g., not checking bills because “AWS has our back” or not exploring alternatives when it might be beneficial. Keep the partnership professional and based on results.
• Lack of Internal Advocacy for the Partnership: The procurement or IT leaders sometimes have the partnership mindset, but other execs only see the bill. If you don’t communicate the value AWS brings (e.g., “they helped us launch in half the time” or “they provided $200k in credits for migration”), higher-ups might pressure you to cut costs at the expense of support or innovation. It’s a pitfall if the partnership benefits aren’t visible to all – it could lead to decisions like dropping Enterprise Support to save money, which hurts long-term. Champion within your company what the AWS partnership yields (in concrete terms).
• Rotating AWS Account Team without Continuity: AWS often rotates account managers or TAMs every two years. A pitfall is not ensuring knowledge transfer in these transitions—sometimes, new reps come in cold. Mitigate by maintaining documentation of past agreements and context and insisting on an onboarding meeting with the new team to get them up to speed. Also, if you find AWS keeps rotating people too fast, give feedback (stability is part of the partnership).
• Ignoring Changing Personnel or Strategy at AWS: AWS, as an organization, can change focus (for instance, pushing certain services or cost models). If you operate on autopilot, you might not notice shifts that could affect you (like a new pricing model that’s better for your use case). Stay engaged with AWS and industry news so you can pivot the partnership as needed. For example, if AWS starts emphasizing sustainability and you have sustainability goals, collaborate on that – it’s a new area of mutual interest that strengthens ties.

What Procurement Should Do: Balance the hard and soft aspects of the AWS relationship. Continue negotiating hard on commercial points (that’s your job), and invest in the relationship capital. Arrange regular meetings (operational and executive).

Provide AWS with positive and constructive feedback so they know where they stand. When AWS performs well, acknowledge it to their management (this builds goodwill that can help in negotiations, as the account team can use your praise as internal justification for better terms).

Conversely, if issues arise, address them promptly through the partnership channels rather than letting frustration fester. Internally, advocate for using AWS’s strengths: if there’s an opportunity for AWS to assist a project (at little/no cost), push your project teams to accept that help.

Sometimes, engineers are wary of vendor involvement – here, procurement can mediate, explaining that AWS’s help could save time/money. Also, strategize long-term with AWS: perhaps propose a quarterly innovation day between your architects and AWS or a yearly roadmap workshop.

This signals you’re in it for a long-term win-win, not just transactional deals. In negotiations, you can reference this collaborative history: “AWS, you know our business and how we work together; let’s craft an agreement that reflects our strong partnership.” This often resonates and leads to more creative solutions.

In sum, procurement should strive to be firm but fair, extracting maximum value while treating AWS as a key strategic partner. Over time, this approach will pay off in better service, tailored offerings, and a trusted relationship that makes the procurement and use of AWS more effective and rewarding.

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