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AWS Cloud Benchmark Case Study

How a technology company avoided $9M in over-committed AWS spend and restructured its EDP using commitment benchmarks.

On this page
  1. Key points
  2. Other Benchmark Engagements
  3. Related reading

Key points#

  • EDP discount achieved (vs. 17% proposed).
  • A high-growth enterprise SaaS company generating $1.8B in annual revenue was negotiating its first major AWS Enterprise Discount Program agreement.
  • The company had grown its AWS spend from $4M to $28M annually over three years and was approaching the threshold at which AWS account teams transition from self-service to managed enterprise relationships with formal EDP negotiations.
  • AWS opened the conversation with a proposal for a $43M, three-year EDP commitment at a 17% discount across eligible services.
  • If revenue growth slowed from its 40% trajectory to 15 to 20%, their projected AWS spend in year three would be well below the $43M commitment, triggering a financial penalty equivalent to 100% of the shortfall.
  • The discount report compared the proposed 17% against anonymized EDP data from comparable SaaS companies, defined as enterprise software companies with $1 to 3B revenue and $20 to 40M annual AWS spend.
  • The signed EDP totaled $34M over three years at a 24% discount rate, versus the initial proposal of $43M at 17%.
  • The $9M reduction in commitment value eliminates the financial exposure that would have materialized had the company's growth moderated.
  • At the higher discount rate, the company also captures an additional $2.4M in discount value over the term relative to the initial proposal even at the lower commitment level.
  • Twelve months after the EDP was signed, the company's growth did moderate, AWS consumption in year one ran at approximately 85% of the reduced commitment, well within the ramp schedule the benchmark identified as standard.

Other Benchmark Engagements#

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Related reading#

All Case Studies