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There are four ways to pay less for AWS, and they behave differently. Reserved Instances and Savings Plans, which you buy from the public rate card. Spot, which trades price for interruption. And the negotiated discount, which you argue for.
Buyers get into trouble by adding them together. They do not add. They stack in a fixed order and they multiply, which is a much less generous piece of arithmetic.
The layers multiply, they do not add. AWS applies Reserved Instances first, then Savings Plans, then your negotiated discount on what is left. So a twenty percent EDP on top of a forty five percent Savings Plan is not sixty five percent. It is fifty six.
Zero point five five times zero point eight. The negotiated discount only ever earns its percentage on an already reduced number. Which has a consequence people miss at the table. The more Savings Plan coverage you already have, the less an EDP is worth to you in absolute dollars.
So when AWS quotes a discount off on demand list, that is not your baseline.
there. Savings Plan bundling hid the seam. On newer agreements AWS folds the negotiated discount into the Savings Plan rate itself, so instead of seeing two layers you see one blended number. You can detect it in the cost and usage report: compare the standard and the net Savings Plan values, and if they match, bundling is on.
It matters because sizing a Savings Plan purchase off public rates while bundling is active makes you overbuy, systematically. The correct sizing multiplies usage by your coverage target, by the Savings Plan rate, by one minus your negotiated rate. And be careful stacking commitments on commitments. A Savings Plan sitting on top of an EDP is two independent take or pay obligations against the same workload.
If that workload shrinks, the EDP shortfall is invoiced at the end of the term, and the Savings Plan is simply wasted hour by hour, with no carry over between hours and no resale market worth the name.
Marketplace is the strange one. Third party software bought through AWS Marketplace retires your commitment dollar for dollar, usually capped at twenty five percent of it, and that cap is negotiable toward thirty or thirty five. But it receives no discount at all. You burn a dollar of commitment and pay a full list dollar for the software.
So Marketplace is shortfall insurance, not a saving. It is how you avoid writing a true up cheque, not how you lower your bill. Two footnotes that are worth real money. Marketplace spend sits outside the support fee base by AWS's own published exclusion list, so routing software through Marketplace retires commitment without inflating support.
And since May 2025 only software hosted entirely on AWS qualifies at all, judged by invoice date with no grandfathering, so agreements sized on a multi cloud software portfolio may already be short.
Now compute the effective rate. Take a ten million dollar commitment at a fifteen percent headline. Five million of ordinary services get the full fifteen. Two and a half million already covered by Savings Plans earns fifteen on an already discounted base.
Two and a half million of Marketplace earns nothing. Blend that and you are near eleven percent, not fifteen. Add mandatory support charged on gross and the real number lands closer to nine or ten.
number. Optimise before you commit, never after. Every idle instance you kill and every gp2 volume you move to gp3 after signature is a saving you hand straight to AWS, because it lowers the consumption that retires a commitment you already agreed. So the sequence is fixed: clean the estate, measure the honest baseline, then commit against it.
Optimisation done first is your money. Optimisation done second is theirs.
One last point. At Redress Compliance we run this arithmetic for a living, on pure contingency: twenty five percent of what we save you, nothing saved, nothing paid. Next episode: building the baseline that every one of these numbers depends on.
Redress Compliance works on contingency: our fee is 25 percent of what we save you. Nothing saved, nothing paid. Independent, buyer side only, never vendor funded. Want Redress to contact you? Reach out and we respond the same day.
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