The AWS Enterprise Discount Program (EDP) is:
- Prepaid Commitment Model: Customers commit to a specific usage amount for AWS services.
- Discounted Pricing: Offers significant discounts over standard pay-as-you-go rates.
- Customized Plan: Tailored to the organization’s specific AWS usage and needs.
- Long-Term Agreement: Typically involves multi-year commitments.
What is AWS EDP?
The AWS Enterprise Discount Program (EDP) is a contractual agreement between AWS and organizations that commits them to spend a specified amount on AWS services over a set time frame, typically 1 to 5 years.
In return for this commitment, AWS offers substantial discounts on cloud services, helping businesses reduce costs and gain predictable pricing.
Key Features of AWS EDP
- Enhanced Support: Customers often receive priority support and access to AWS account teams to help optimize usage.
- Commitment-Based Discounts: Organizations pledge a specific annual spending amount, unlocking discounts across AWS services.
- Customizable Agreements: AWS EDP terms are tailored to meet individual business needs, including workload requirements and strategic goals.
- Broad Service Coverage: Discounts apply to a wide range of AWS offerings, such as EC2, S3, RDS, and machine learning services.
Eligibility for AWS EDP
To be eligible for AWS EDP, customers must demonstrate a history of spending $1 million or more on AWS services or committing to doing so.
The discount rates vary, but for a $1+ million annual commitment, the discount rate for the standard AWS on-demand pricing model may be around 9 percent.
The AWS EDP program covers the majority of AWS solutions and professional services across all AWS regions. It’s best suited for businesses certain about future service utilization and spending needs.
Five scenarios where an organization should consider AWS EDP
- High and Predictable Usage:
Organizations with steady, high-volume cloud usage are well-suited for an AWS Enterprise Discount Program (EDP), as they can fully leverage the discounts and incentives tied to consistent usage. - Focus on Cost Reduction:
Companies prioritizing long-term cost savings can benefit from an EDP by locking discounted rates for their committed usage, reducing overall cloud expenditures. - Stable Growth and Operations:
Enterprises with predictable operational demands and stable growth trajectories are ideal for EDP. Their reliability allows them to confidently commit to long-term agreements. - Need for Budget Certainty:
Businesses that require fixed, predictable budgets for cloud expenses to align with their financial planning goals benefit from the cost consistency provided by an EDP. - Planned Cloud Expansion:
Organizations preparing to scale their cloud infrastructure substantially, whether through increased workloads, regional expansion, or adopting more AWS services, can secure better pricing and support by entering an EDP.
These scenarios highlight the strategic value of AWS EDPs for businesses seeking cost predictability, efficiency, and scalability while aligning cloud investments with their long-term objectives.
Pros and Cons of AWS Enterprise Discount Program (EDP)
Pros:
- Significant Cost Savings:
The AWS EDP provides substantial discounts on a wide range of AWS services, making it an attractive option for organizations with high or consistent cloud usage. These savings can help reduce overall IT operational costs over the contract period. - Predictable Spending and Budgeting:
With fixed pricing tied to the agreement, organizations gain greater clarity and control over their cloud spending. This predictability facilitates financial planning and aligns with long-term budgetary goals. - Customizable Commitments:
The EDP allows for negotiation flexibility, enabling businesses to structure agreements based on their unique workloads, growth projections, and service requirements. This tailored approach ensures the contract aligns with organizational goals. - Access to Enhanced Support and Benefits:
EDP customers often receive additional perks such as dedicated account management, priority support, and collaborative planning sessions with AWS experts to optimize usage. - Alignment with Growth Strategies:
For businesses planning to scale their infrastructure or adopt new services, the EDP offers an opportunity to lock in discounted rates while securing predictable costs for future expansion.
Cons:
- Long-Term Commitment:
EDP agreements typically span multiple years, which may limit flexibility. Organizations must carefully assess future cloud needs, as unforeseen changes in usage could impact their ability to meet commitments. - High Upfront Commitment:
The financial model often requires a substantial upfront investment or commitment to a predefined spending level. This may strain budgets, especially for organizations with fluctuating or unpredictable workloads. - Risk of Underutilization:
The organization risks paying for unused capacity if the committed usage level is unmet. Misjudging future growth or overestimating needs can result in wasted resources and reduced cost efficiency. - Potential for Overcommitment:
Organizations might feel pressured to commit to higher spending levels to secure larger discounts, which could lead to financial strain if actual usage falls short of projections. - Limited Service Adjustments:
The agreement typically locks in pricing and service commitments, potentially restricting the ability to adapt to new technologies or shift workloads to other cloud providers during the contract term.
Key Considerations:
- Evaluate Current and Projected Usage: Before entering an EDP agreement, ensure your organization understands its current AWS usage and realistic growth projections.
- Involve Stakeholders: Collaborate with finance, IT, and operations teams to align the agreement with organizational goals.
- Negotiate Flexibility: Discuss terms that allow some adaptability to account for changing business needs or unexpected scenarios.
- Plan for Optimization: Invest in monitoring and optimization tools to ensure committed usage levels are met and resources are efficiently utilized.
Negotiating an AWS Enterprise Agreement
Qualifying for EDP is not difficult. However, realizing AWS’s full potential will be challenging.
Here are some strategies for negotiating an AWS enterprise agreement:
- Analyze your past AWS expenses and forecast future spending.
- Show AWS the value your company will bring by committing to long-term purchases.
- Forecast your AWS cloud requirements accurately.
- Consolidate the AWS budget if additional AWS cloud users are in your immediate association.
- Hone your negotiation skills; show AWS why they would not like to lose you!
Strategies for Securing Better Discounts from AWS
Several factors can influence your AWS EDP contract, potentially leading to better discounts.
Here are some key considerations:
- Prepayment: Although AWS no longer requires prepayment, they may offer additional discounts for partial or full prepayment. This can be a strategic move to secure better rates.
- AWS Marketplace: Your spending on the AWS Marketplace can partially count towards your AWS EDP commitment value. However, it’s important to note that this spending typically cannot be discounted at the EDP rate.
- Projected Future Spending: Do you have the capacity to migrate existing on-premise services to AWS (or another cloud)? If so, this could potentially enhance your negotiation power for future contracts. The more you plan to use AWS services, the better discounts you might secure.
- Support Pricing and Services: AWS mandates that EDP customers enroll in the AWS Enterprise Support program for the duration of the EDP contract. This requirement allows you to negotiate and clarify what you receive through AWS support throughout the EDP contract period.
By understanding these variables and effectively leveraging them, you can potentially secure better discounts and maximize the value of your AWS EDP contract.
Remember, every penny saved is a penny earned!
Alternatives to AWS Enterprise Discount Program (EDP) include
1. AWS Partner Opportunity Acceleration Program (POA)
Overview
The AWS Partner Opportunity Acceleration (POA) Program is designed to help AWS Partners drive customer adoption of AWS services by offering financial incentives and support for specific projects.
Key Features:
- Funding for Specific Initiatives: AWS partners can receive funding for qualified customer projects that promote AWS adoption, such as migrations, workload optimizations, and innovation-driven implementations.
- Partner Collaboration: Encourages collaboration between AWS, partners, and customers to achieve shared business goals.
- Use Cases: Ideal for organizations working with AWS Partners to execute cloud transformation projects or proof-of-concept initiatives.
Example:
A consulting firm partnering with AWS might leverage POA funding to migrate a mid-sized company\u2019s on-premises databases to AWS RDS, covering a portion of the migration costs and accelerating project delivery.
2. AWS Private Pricing Term Sheet (PPTS)
Overview
The AWS Private Pricing Term Sheet (PPTS) provides customized pricing agreements tailored to an organization’s requirements and spending levels. It is often negotiated for businesses with significant cloud usage without a formal EDP.
Key Features:
- Customized Pricing: This enables organizations to negotiate pricing terms that reflect their unique workloads and expected usage patterns.
- Flexibility: Unlike EDP, PPTS agreements may not require multi-year commitments and are more adaptable to fluctuating usage.
- Discount Levels: Offers tiered discounts similar to EDP, though often more suitable for organizations with variable needs.
Example:
A SaaS company with fluctuating workloads negotiates a PPTS to secure discounts on its primary usage of EC2 instances during peak business months while avoiding a rigid long-term commitment.
3. AWS Migration Acceleration Program (MAP)
Overview
AWS MAP is a structured program designed to support organizations in transitioning their workloads to AWS. It provides funding, tools, and resources to simplify and accelerate migration.
Key Features:
- Funding Support: Offers financial assistance to offset migration costs, including licensing fees, consulting services, and training.
- Migration Expertise: Access to AWS migration tools, best practices, and dedicated migration specialists.
- Workload Optimization: Includes post-migration reviews and recommendations to optimize workloads for cost and performance.
Use Cases:
- Organizations with large-scale on-premises workloads or legacy systems are looking to modernize.
- Enterprises requiring financial and technical support to transition to AWS.
Example:
A financial services company migrates its legacy infrastructure to AWS using MAP. The program funds part of the project, reduces upfront migration costs, and accelerates deployment to AWS.
4. AWS Savings Plans
Overview
AWS Savings Plans offer flexible pricing models that provide significant discounts for consistent usage across AWS services without requiring a long-term contractual commitment like EDP.
Key Features:
- Commitment-Based: Customers commit to a specific amount of usage (measured in $/hour) for 1 or 3 years to receive discounted rates.
- Service Flexibility: Savings Plans apply to a wide range of services, including EC2, Lambda, and Fargate, and can even cover usage across regions.
- Low Barrier to Entry: Accessible for smaller organizations or those with inconsistent growth patterns.
Example:
A startup committing to $10/hour in compute resources benefits from up to 72% savings on EC2 instance costs while retaining flexibility for workload adjustments.
5. Volume Discounts
Overview
For organizations with significant monthly AWS spending, AWS offers volume-based discounts that automatically apply as usage grows.
Key Features:
- Automatic Discounts: Tiered pricing decreases as usage increases, particularly for services like S3, CloudFront, and EC2.
- No Contracts: Unlike EDP or PPTS, volume discounts do not require formal agreements or commitments.
Example:
An e-commerce company with high S3 storage usage sees automatic cost reductions as its data volumes exceed predefined thresholds.
FAQ: What is AWS EDP? – AWS Enterprise Discount Program
What is the AWS Enterprise Discount Program (EDP)?
AWS EDP is a contractual agreement where organizations commit to a specific level of AWS spending over a set term, typically 1 to 5 years, in exchange for service discounts.
Who is eligible for AWS EDP?
Organizations with consistent and substantial AWS usage, typically spending hundreds of thousands to millions annually, are eligible for AWS EDP.
How long does an AWS EDP agreement last?
Most agreements last between 1 and 5 years, depending on the negotiated terms and the organization’s growth and spending projections.
What kind of discounts does AWS EDP offer?
Discounts vary based on the committed spending level, ranging from a few percentage points to significant reductions, depending on usage volume.
Does AWS EDP include all AWS services?
Most AWS services are included, but exclusions may apply to certain services or products. These specifics are outlined in the agreement.
Can EDP terms be customized?
The agreement is negotiable, allowing organizations to align the terms with their cloud strategies and anticipated usage patterns.
What happens if the spending commitment isn’t met?
Organizations may face penalties or need to make up the difference by paying the agreed commitment regardless of usage.
Can the agreement be adjusted during the term?
Adjustments are generally limited, but AWS may allow amendments for significant changes in business needs or usage patterns.
How is EDP different from AWS Savings Plans?
EDP covers a broader scope, including multiple services, and requires long-term spending commitments, while Savings Plans are tied specifically to compute usage.
Is support included in AWS EDP?
Yes, most agreements include access to AWS support services, such as technical account managers and architecture guidance.
What are the key benefits of AWS EDP?
Cost savings, predictable spending, and access to dedicated AWS support are the primary benefits of EDP.
Are there any risks associated with AWS EDP?
Risks include overcommitting to spending levels or unexpected changes in cloud usage that may impact the organization’s ability to meet the commitment.
How should an organization prepare for EDP negotiations?
Evaluate historical usage, forecast future needs, and collaborate with finance and IT teams to establish realistic spending commitments.
Can organizations combine EDP with other AWS programs?
EDP can often be used alongside AWS programs like the Migration Acceleration Program (MAP) or Private Pricing Term Sheets (PPTS).
What happens when an AWS EDP agreement ends?
At the end of the term, organizations can renew the agreement, negotiate new terms, or, if no new agreement is made, revert to on-demand pricing.
