AWS Resellers vs. Direct Contracts: Cost Implications for Enterprise Customers
Enterprise customers procuring Amazon Web Services (AWS) have two main options: sign a direct contract with AWS or purchase AWS through an authorized reseller. An AWS reseller is a third-party company authorized by AWS to sell its cloud services, often bundling AWS with value-added services like support or managed services.
This article compares direct AWS contracts to reseller agreements in both U.S. and international contexts, focusing on cost implications.
We’ll examine major resellers (e.g., SoftwareOne, SHI, Ingram Micro), explain AWS pricing programs like the Enterprise Discount Program (EDP) and Private Pricing Addendum (PPA), highlight real-world examples, and call out pitfalls or vendor-favorable terms to watch for.
The goal is to provide independent, customer-focused advice for Software Asset Management (SAM) managers and licensing professionals evaluating these options.
Direct AWS Contracts and Enterprise Pricing Programs (EDP/PPA)
When an enterprise contracts directly with AWS, it usually accepts the AWS Customer Agreement or negotiates a custom contract.
Large customers can enrol in AWS’s Enterprise Discount Program (EDP) – now often referred to as a Private Pricing Addendum/Agreement (PPA) – which provides custom discounted pricing in exchange for a committed cloud spend.
Essentially, EDP and PPA refer to the same thing: a privately negotiated discount arrangement for committing to high-volume, long-term AWS usage.
How EDP/PPA Works:
An AWS EDP/PPA typically requires a multi-year commitment (commonly 1 to 5 years) to a certain annual spend (often starting around $1 million per year in the U.S.). In return, the customer receives a percentage discount on AWS services off the standard pay-as-you-go rates.
The discount level scales with the committed spend and term length – for example, committing $1+ million annually might yield roughly a 6% discount off on-demand pricing as a baseline, with higher spends garnering larger discounts.
These discounts apply to most AWS services and even AWS Marketplace purchases (typically up to a limit, such as 25% of the commitment, which can be fulfilled via Marketplace usage). Every EDP/PPA is individually negotiated, so terms can vary.
Benefits of Direct Contracts: Customers maintain a direct relationship with AWS by contracting directly.
This means:
- Full access to AWS features and billing tools – e.g., your team can use the AWS Cost Explorer, detailed billing reports, AWS Organizations, Control Tower, etc., without third-party interference.
- Direct support options – you can purchase AWS Support plans (Business or Enterprise support) or even get AWS Enterprise Support included at a discount via the PPA negotiation. (Some EDP deals include support fee discounts or credits as part of the private pricing arrangement.)
- Negotiation leverage for large scale – if your spending is significant, you negotiate enterprise terms directly with AWS. This can include custom pricing for specific services or commitments, and the discount is applied without any reseller markup. For example, a large enterprise projecting steady AWS growth might lock in a private pricing deal to secure savings over the contract term.
- Global coverage under one agreement – AWS direct contracts can often cover usage across regions. AWS has local billing entities worldwide (e.g., AWS, Inc. for the U.S., AWS EMEA SARL for Europe, etc.). Still, a single PPA can often consolidate spending commitments across regions.
Drawbacks and Costs of Direct Contracts: Going direct isn’t always the cheapest or easiest route for every company:
- High Commit Threshold: Smaller enterprises or those with ~$ annual AWS spending under $1M won’t directly qualify for EDP discounts. Without an EDP, they pay standard rates (aside from self-serve savings like Reserved Instances or Savings Plans). In other words, sub-$1M/year customers have little pricing leverage with AWS directly.
- Rigid Commitments: EDP/PPA deals require committing to a certain spend. If your cloud usage is unpredictable or could shrink, this is risky – failing to meet the committed spend means you still pay the difference as a shortfall penalty. There’s essentially a “use-it-or-lose-it” aspect to the committed dollars. This can lead to a wasted budget if you over-forecast your needs.
- Limited flexibility: While AWS does allow combining EDP discounts with other programs (e.g., you can still use Reserved Instances, Savings Plans, etc., on top of an EDP), the contract is relatively inflexible once signed. You are locked into AWS for the term to achieve the committed spending, which could be a concern if you consider multi-cloud or if AWS drastically changes pricing.
- Negotiation complexity: Enterprises must forecast their growth and negotiate with AWS’s sales team for an EDP. The process can be time-consuming. AWS may push for a higher commitment or include growth rate clauses. (For instance, some contracts might require your annual spending to increase year-over-year or reset the discount if you don’t grow – negotiate these carefully.) There’s generally less room to negotiate terms than in some traditional software licensing deals since AWS EDP discounts are tied to spend tiers (you mainly negotiate how much you’ll commit, which determines your discount).
International Considerations (Direct):
AWS’s willingness to offer an EDP can vary by region; notably, the spend threshold can be lower in certain non-US regions to entice customers. You’ll receive invoices from the local AWS entity relevant to each account’s country when contracting directly.
This can introduce complexity: e.g., a company with accounts in the US, EU, and APAC might get separate invoices in different currencies from different AWS billing entities.
AWS has been launching local entities (for example, Malaysia for Malaysian customers) that bill in local currency and comply with local tax laws. However, tax implications should be noted – for example, AWS direct bills in Malaysia incur a 6% service tax.
In contrast, validated local resellers are exempt from that tax on cloud services, potentially making a reseller channel more cost-effective in that specific country. Enterprises operating globally must consider such local nuances when going direct vs. using resellers or distributors.
Buying AWS Through Resellers (SoftwareOne, SHI, Ingram Micro)
AWS has an extensive Solution Provider reselling program. In a reseller scenario, the customer purchases AWS usage indirectly from an AWS partner (such as SoftwareOne, SHI, or Ingram Micro) rather than from AWS itself.
The reseller, in turn, has a contractual relationship with AWS. Typically, the reseller becomes the “payer” on the AWS accounts and bills the customer separately.
This means the reseller often technically “owns” the master billing account (and sometimes even root account control) while you own and operate the resource accounts under it.
Major AWS resellers include:
- SoftwareOne – A global software licensing and cloud services provider. SoftwareOne is an AWS Premier Tier partner that offers a program called “Simple for AWS”. They help enterprises by consolidating AWS billing, providing their PyraCloud cost management platform, and even assisting with AWS EDP negotiations. For example, in one case, SoftwareOne worked with a logistics company on a 3-year plan using AWS Marketplace and an AWS EDP commitment, resulting in expected savings of over $200,000 for the customer. SoftwareOne negotiated discount options with AWS so that the client “receives a discount for each AWS cloud consumption purchased through SoftwareOne” under the arrangement. They also handled invoicing for 80+ AWS accounts across the client’s subsidiaries. This illustrates how a reseller can aggregate and manage multi-account, multi-country AWS usage under one agreement.
- SHI International is a large U.S.-based IT reseller and an AWS Solution Provider. SHI leverages its buying power to offer customers negotiated AWS pricing and flexible terms via its AWS resale program. In marketing materials, SHI highlights benefits like consolidated billing, custom payment schedules, and even financing options for AWS spend. SHI has a strategic collaboration with AWS, and it can facilitate private offers in the AWS Marketplace (via the CPPO program) so that customers can get their AWS Marketplace purchases at discounted rates and count those towards any AWS commitments.
- Ingram Micro – A global distributor that operates a cloud marketplace platform. Ingram Micro acts as an AWS distributor, enabling other channel partners to directly resell to some customers. One unique offering reported by Ingram is a “shared Reserved Instance” model: Ingram pools Reserved Instance capacity and lets customers buy into RIs flexibly. This can make RIs “no-risk” – if you don’t fully utilize a reserved instance, Ingram resells the unused capacity to other customers – but the trade-off is that the cost is “a bit more expensive than normal RIs” since Ingram adds a premium for that flexibility. In short, the customer gets more agility (and potentially savings if they can’t commit to a full RI alone). At the same time, Ingram earns a margin by arbitraging RI usage across multiple clients. This kind of innovation is possible via a reseller, whereas direct AWS deals wouldn’t offer such a mechanism.
Many other AWS resellers and MSPs exist (e.g., DoiT International, Cloudreach, Rackspace, etc.), but the key value propositions are similar. Below, we break down the cost-related pros and cons of using a reseller:
Cost Advantages of Resellers:
- Discounts for Smaller Spenders: The core promise of going through a reseller is often better pricing than you’d get directly, especially if you don’t meet AWS’s EDP spend threshold. Resellers aggregate demand from multiple clients and negotiate volume discounts with AWS. They can then pass through a portion of those discounts to customers. Companies spending under $1M/year on AWS (not eligible for direct private pricing) can often get similar “private pricing” discounts via a reseller. This can level the playing field for mid-market firms to obtain enterprise-like rates. For example, a customer spending $300k/year might get a 5% discount through a reseller, whereas AWS Direct would offer no discount at that level.
- Leveraging Reseller’s EDP/Commit: Some large resellers like SoftwareOne or SHI may have committed spend agreements with AWS. They might add your usage to their pool to help meet commitments or achieve higher discount tiers, enabling them to give you a better price than AWS retail. One SHI document explicitly notes, “leverage SHI’s buying power… for deeper discounts”. In effect, you’re piggybacking on the reseller’s volume to get a discount you couldn’t get alone. (Be aware, however, that if you are large enough to qualify for an AWS EDP, the reseller isn’t likely to beat AWS’s discount – more on that in the drawbacks.)
- Bundled Support and Services: Resellers often include value-added services at little or no extra cost, subsidized by the margin they earn on your AWS spend. For instance, many provide cost management tools (CloudCheckr, CloudHealth, PyraCloud, etc.) and FinOps guidance to optimize your usage. They may also include technical support: some partners offer Partner-Led Support wherein you get AWS-equivalent support (e.g., they will manage support tickets with AWS on your behalf), often at a lower cost than AWS’s support plans. This can save money – for example, AWS Enterprise Support costs 10 %+ of your bill for large accounts, so if a reseller provides similar 24/7 support as part of their service, that’s a significant cost avoided for you. Resellers may additionally throw in training credits, architecture consulting, or migration services that you’d otherwise have to pay for separately.
- Flexible Billing and Payment: Going through a reseller can simplify procurement and billing. You’ll typically get a regular invoice from the reseller (often in your local currency), which might align better with your procurement processes (net payment terms, purchase orders, etc., which AWS may not offer to smaller customers on pure pay-as-you-go). Resellers can also consolidate cloud bills across multiple vendors. For example, a global company could get one combined invoice for AWS and other software, making internal chargebacks easier. A reseller can handle currency conversion and local tax compliance in international scenarios. As noted, in some countries, using a local reseller can even reduce taxes on cloud services (e.g., avoiding service tax/VAT that AWS would charge directly).
- No Upfront Commit for Customer: Many resellers do not require your company to commit to a fixed multi-year spend as AWS would. You might simply pay for actual usage month-to-month (the reseller carries any commitment on their side with AWS). This can be attractive if you want to avoid long-term obligations while still getting a discount. (That said, some reseller agreements include a contractual term or spending expectations, but often with more flexibility than AWS direct.)
Cost Drawbacks and Risks of Resellers:
- Reseller Margin & Markups: Resellers are not charities – they intend to make a profit. Some do this transparently via a small service fee or by not passing the full AWS discount to you. Others do it opaquely via margin on reserved instances, savings plans, or FX rates. One cloud economist observed that many AWS resellers keep 10–15% margin by arbitraging RIs/Savings Plans across customers, sometimes giving the customer only a portion of the possible savings. Sometimes, a reseller might add a markup on top of AWS list prices (though this is less common in competitive enterprise deals). The key point: verify the net effective discount you’re getting. Suppose AWS would give you (hypothetically) a 10% EDP discount directly, and the reseller is offering the same 10%. In that case, they are likely making money by other means (or simply counting on volume rebates). Always compare the total cost from the reseller to AWS’s direct pricing – don’t assume it’s lower by default.
- Loss of Pricing Transparency: When you move under a reseller’s umbrella, you may lose some visibility into AWS’s native billing details. Many resellers funnel usage data into their portal or reports. Some have even been known to disable the AWS Cost Explorer and native billing console for the customer. They might do this to hide the exact discounts or margins they are making. Verifying if you’re truly saving money can be harder if you only see your final charges via their tool. This loss of transparency makes cost management more challenging. In one reported case, a customer was given an IAM user with limited permissions after moving to a reseller, preventing access to detailed cost info. This is a red flag. A good reseller should be willing to show you the AWS raw costs and how your price is derived, but not everyone does.
- Feature Limitations: Certain account features and Cost Explorer can be restricted. Some resellers force customers into the reseller’s AWS organization hierarchy, meaning you cannot use AWS Organizations or Control Tower alone. This could be a serious limitation if your cloud setup relies on multiple accounts, SCPs, or automated account vending. Additionally, resellers may disallow you from direct Reserved Instances or Savings Plans purchases. Instead, you must request them via the reseller (who might prefer to sell you their “shared” RI pool, as noted above). These limitations can undermine your ability to optimize costs independently.
- Vendor Lock-In and Switching Issues: Ironically, using an AWS reseller introduces a middleman lock-in, even though the cloud is supposed to be flexible. If, down the road, you decide to move back to direct billing with AWS or switch to another reseller, it can be tricky. Often, there is no easy “flip a switch” migration; it may require moving accounts out of the reseller’s organization or even migrating resources to new AWS accounts if the reseller doesn’t cooperate. The reseller might own the root credentials of the master payer account, adding friction. As one analysis said, “switching from a reseller to direct purchase later might be complex”. This is a risk – you might be stuck with that reseller through the end of your contract or have to invest time in disentangling your accounts.
- Contract Terms Favoring Reseller/AWS: Pay close attention to the fine print in reseller agreements. Some potential pitfalls include:
- Commitment via Reseller: Occasionally, a reseller may ask for a soft commitment or a minimum annual spend from you (especially if they gave a large discount). If you fail to meet it, there could be penalties or true-up fees. Make sure any commit is realistic for your usage.
- Auto-renewal clauses: A reseller contract might auto-renew or continue month-to-month. Ensure you have the flexibility to exit and review pricing periodically.
- Handling of Credits: If AWS offers promotional credits or service credits (e.g., for an SLA outage) to your accounts, clarify whether those will be passed through to you in full. Some contracts let the reseller offset them (since the reseller is the AWS customer of record).
- Support liabilities: If the reseller is providing support, understand the SLA. In a critical outage, you’ll contact the reseller, who then contacts AWS. Any delays or shortcomings there could impact your business. You may want a clause that you can escalate directly to AWS if neede,d or at least verify the reseller’s support capabilities.
Below is a summary comparing Direct vs. Reseller on key cost-related factors:
Factor | Direct AWS Contract | Through a Reseller (SoftwareOne, SHI, Ingram, etc.) |
---|---|---|
Discount Programs | Eligible for AWS EDP/PPA if spending is large (often >$1M/year). Custom discounts are negotiated directly with AWS. Smaller spenders pay standard rates (no enterprise discount). | Pricing is via the reseller’s invoice. It may be less transparent: e.g. you might see a blended rate or line item for “AWS Services” after the discount. Some resellers hide AWS Cost Explorer, making it hard to verify exact margins. Always clarify how pricing is calculated. |
Pricing Transparency | Full insight into AWS pricing and billing. You see list prices, usage, and any EDP discounts on your bill. No hidden markup – you pay AWS directly. | Pricing is via the reseller’s invoice. It may be less transparent: e.g. you might see a blended rate or line item for “AWS Services” after the discount. Some resellers hide AWS Cost Explorer, making it hard to verify exact margins. Always clarify how pricing is calculated. |
Billing & Currency | Billed by AWS (often in USD or local currency where AWS has an entity). Enterprises with global accounts might get multiple invoices (by region/country). Payment via AWS’s standard terms (credit card or 30-day invoice for approved customers). | Billed by the reseller, typically in your preferred currency and with local tax handling. Can consolidate multiple AWS accounts and even other services into one invoice. Payment terms might be more flexible (e.g. Net 30/45, POs, or even financing through the reseller). This can simplify accounts payable, especially internationally. |
Support Costs | Must purchase AWS Support plans if needed (Business/Enterprise), which can add 10%+ to your AWS costs at scale. No “free” expert guidance beyond what the AWS account team provides. | Resellers often include support and advisory services. Many provide 24×7 cloud support or TAM-like guidance as part of the deal (funded by the margin they earn). Partner-led Enterprise Support can be cheaper than AWS support. This can reduce your overall cost of ownership (no separate support subscription). |
Cost Optimization Tools | Direct access to AWS tools (Cost Explorer, budgets, Trusted Advisor, etc.) and the freedom to buy third-party tools. AWS may provide credits or access to tools during an EDP negotiation, but you manage cost optimization largely in-house. | Resellers commonly bundle cost management platforms (e.g. SoftwareOne PyraCloud, CloudHealth, CloudCheckr) for free or discounted. They may actively advise on rightsizing, RI purchases, etc. The flip side is you might be required to use their tooling and processes, which could be a learning curve or limitation if their tool doesn’t capture everything you need. |
Account Control | You fully control your AWS accounts and hierarchy. Use AWS Organizations and any governance you like. You have the root account ownership. | The reseller controls the payer account and, in some models, holds root access to your accounts. You typically get admin access to your workloads, but certain org-level actions are managed by the partner. This can limit your autonomy and requires trust in the reseller. Exiting the arrangement might require migrating accounts. |
Contract Commitment | If under EDP/PPA, you’re legally committed to spending a certain amount with AWS over X years – if you undershoot, you still pay the committed amount. If there is no EDP, then no commitment (pay-as-you-go). | Often no direct commitment from you to the reseller in the pay-as-you-go model; you can scale down or even terminate service (subject to notice periods). However, some resellers may ask for at least a forecast or informal commitment. The reseller carries the risk of any AWS commitments they made. Always check if the reseller contract has a minimum term or volume requirement. |
Table: Key differences between contracting directly with AWS vs. buying through an AWS reseller.
Pitfalls and Vendor-Favorable Terms to Watch Out For
When evaluating direct vs. reseller options, be vigilant about the following pitfalls and terms that often favour the vendor (AWS or the reseller) over you:
- Overcommitment Penalties (Direct EDP): If you sign an AWS EDP/PPA, ensure your commitment is realistic. AWS will charge for any shortfall if you spend less than what is committed. There is usually no forgiveness for under-utilization, so you must accurately forecast usage or risk paying for cloud resources you never used. Tip: Negotiate an EDP that you’re confident you can meet (perhaps 80% of your forecasted spend), and remember you can always exceed it (and still get the discount on the overage without penalty).
- “All or Nothing” Discounts (Direct): AWS’s private pricing often applies across the board to your AWS spend, which is good, but you typically can’t selectively drop services to reduce cost without affecting the commitment. Be mindful of any contract clauses about adding new AWS accounts or acquisitions – ensure new accounts can be covered under the same EDP, so you maximize discount usage. Also, clarify how Marketplace spending counts (usually capped at 25% of the commitment). This detail can bite you if, say, a large chunk of your spend is third-party SaaS from AWS Marketplace; beyond a point, it might not count toward your commitment.
- Hidden Reseller Margins: As discussed, resellers might not openly disclose their margin. Ask for transparency. For example, inquire: “AWS’s list price for this usage is $X, what discount are you applying, and what will I pay?” If the reseller evades, that’s a red flag. Common places where margins hide: managed Reserved Instances (the reseller gives you a price slightly under on-demand but pockets the full RI savings), currency exchange rates, or by bundling AWS costs into a larger managed service fee. One Reddit user warned that certain partners “lock you out of [AWS] Billing to hide their discount”. Make sure you retain the ability to audit your costs.
- Restricted Cost Management Access: It cannot be overstated – do not surrender visibility into your cloud costs. If a reseller requires you to use only their tooling and disables AWS Cost Explorer or Budgets for your account, push back or walk away. You need at least read-only access to the standard AWS cost data for sanity checks. Some partners replace AWS’s tools with CloudCheckr/Vegas/other platforms, which may be fine if they provide equal detail. But ensure you’re comfortable with that trade-off. Losing the granular data can impede your FinOps efforts.
- Loss of AWS Account Benefits: Certain AWS programs and benefits might be unavailable or work differently under a reseller. For instance, AWS sometimes gives free credits to startups or runs funding programs for POCs – these typically apply to direct customers. Also, if you rely on AWS’s enterprise support TAM or solution architects, check if those still engage with you under a reseller deal (often AWS primarily liaises with the reseller as the “customer”). Make sure you’re not forgoing important partnerships or advisory input from AWS.
- Reseller Lock-In Clauses: Look for any clauses in the reseller contract about termination or transition assistance. A vendor-favorable contract might require 60-90 days’ notice to leave and provide no help migrating your accounts out. If the relationship sours, you don’t want to be handcuffed. Try to negotiate provisions that the reseller will reasonably assist in transferring accounts back to you/AWS if requested. At the very least, avoid multi-year reseller contracts that don’t have an easy out.
- “Moving Target” Discounts: Ensure the discount or rate you get from the reseller is contractually fixed or specified. You don’t want a scenario where they can change your discount arbitrarily. For example, is your price locked in if AWS lowers its prices or the reseller’s own AWS tier changes? Clarify how your pricing will follow any AWS price reductions (you should benefit from AWS price cuts just as direct customers would). A fair contract will pass through such reductions.
- Double-Dipping on Savings: If you plan to use Reserved Instances or Savings Plans yourself, clarify how that works with the reseller. Some resellers might forbid it (because it interferes with their model). Others allow it, but it can complicate billing. Also, if you have existing RIs when moving to a reseller, ensure those benefits carry over. There have been anecdotes of resellers selling their own RI instead of letting customers use their pre-purchased RIs – be cautious of this, as it can negate your planned savings.
- Internal Chargeback Complexity: This is more of a pitfall for your organization. A reseller invoice might aggregate or present costs differently if you rely on AWS’s detailed billing to charge costs back to business units. Ensure the reseller’s billing reports provide the necessary breakdowns (e.g., per account, tag, or project). You don’t want to save money but lose the ability to allocate expenses internally.
Real-World Example Highlights
To ground the discussion, here are a couple of real-world scenarios that illustrate the trade-offs:
- Global Logistics Company via SoftwareOne: A multinational logistics provider in Europe decided to purchase AWS through SoftwareOne to improve cost management. SoftwareOne helped negotiate an AWS EDP on the customer’s behalf and set up centralized billing for 80+ AWS accounts. By combining the AWS Enterprise Discount Program with reseller value-add, the company has saved roughly $200k over three years and gained better usage visibility through the reseller’s PyraCloud platform. This example shows that with a capable reseller, an enterprise can optimize a complex AWS environment and still benefit from AWS’s discount programs – essentially getting the best of both worlds (AWS’s lower pricing plus partner support). The trade-off was trusting SoftwareOne with account control and relying on their tools, which the customer deemed worthwhile for the cost savings and efficiency gains in managing cloud spend.
- Mid-Market Tech Firm considering Reseller vs Direct: On the flip side, consider a U.S. tech company spending about $600k/year on AWS. They don’t qualify for an AWS EDP on their own. They engaged an AWS reseller (a “Well-Architected” partner) who offered to take over their account and provide an immediate 5% discount on all usage. However, engineers raised concerns: the partner’s plan involved moving the AWS account under the partner’s organization and using the partner’s cost tool. In an online forum, experts warned that some partners will lock customers out of native cost tools and even restrict purchasing RIs/Savings Plans to preserve the partner’s margin. In this case, the company had the capability for in-house cloud management, so the value of the 5% discount was not worth the loss of control and visibility. They ultimately chose to stay direct with AWS, focus on self-optimizing their costs, and revisit an EDP once their spending grew enough. This story underscores that a small discount via reseller can come with hidden costs in flexibility and control – each organization must weigh those carefully.
Recommendations
Choosing between a direct AWS contract and a reseller arrangement depends on your organization’s size, capabilities, and priorities.
Here are some customer-centric recommendations based on the analysis:
- Evaluate Your Cloud Spend Level: If your AWS spend is well above the EDP threshold (e.g. > $1M/year), you should engage AWS directly and negotiate your private pricing deal. In this scenario, there is little cost advantage to routing through a reseller – AWS will offer similar (or better) discounts to you directly, and the reseller would largely be “simply passing that discount through”. Avoid unnecessary intermediaries and control your AWS relationship in such cases. Conversely, if your spending is below the threshold, get quotes from one or more reputable resellers to see what discount they can provide. They may unlock savings you can’t get on your own.
- Identify Needed Value-Adds: Consider what a reseller can do for you, aside from pricing. Do you lack cloud optimization expertise or need 24/7 support? Do you struggle with multi-account management or complex billing requirements? If so, reseller services could be very valuable. However, think twice if you have a strong in-house AWS team and only use a reseller for a discount. As one cloud advisor noted, if a reseller isn’t providing meaningful value-adding beyond discounts, you might as well go directly. Only choose the reseller route if their offerings (support, tooling, consolidated billing, etc.) fill gaps for your organization.
- Compare Net Effective Cost: Do an apples-to-apples cost comparison. Ask AWS for a pricing proposal (or use their public pricing with any self-service discounts you employ) and compare it to the reseller’s proposal for the same usage pattern. Include support costs in this comparison. For example, maybe AWS Direct gives no discount, but you’d pay Enterprise Support, whereas a reseller gives 5% off and includes support – calculate which nets out better annually. Remember to factor in any tax or currency advantages if you operate in regions where the reseller can save you money on VAT/GST, etc. Also, consider soft costs: if the reseller handles a lot of cost optimization for you, that could reduce your internal staffing needs (a cost-saving, albeit hard to quantify).
- Diligence the Reseller’s Terms: If you opt for a reseller, scrutinize the contract and SLA. Specifically:
- Ensure you retain access to your AWS account and cost data (at least read-only billing data). Negotiate this if it’s not standard. It’s crucial for trust and transparency.
- Clarify how Reserved Instances/Savings Plans will be handled – can you purchase them, or will the reseller manage that? If the latter, what prices or savings do they guarantee? Get this in writing to avoid later conflict.
- Insist on a clear pricing methodology. For example, it could be “X% off AWS retail price for these services” or “match AWS pricing minus Y”. This protects you from surprise increases or unclear bills.
- Check for any lock-in provisions. Ideally, you want the ability to exit the arrangement with reasonable notice (e.g., 30 days) and have your accounts transferred back to you or to another provider. Avoid multi-year exclusive commitments to a reseller unless you’re sure of the relationship’s value.
- Confirm how any AWS credits or incentives will pass through. If you earn AWS credits (from programs or marketing promotions), the reseller should apply them to your bill.
- Leverage Competition: You have options – AWS sales teams and multiple resellers compete for your cloud spend. Use that to your advantage. For instance, if you’re negotiating an AWS EDP, you can mention you’re also considering going through a reseller who offered an X% discount – AWS might improve their offer to win/keep you direct. Similarly, let resellers know you’re talking to AWS and other partners; it pushes them to be more transparent and aggressive on pricing. This competitive approach often results in better final terms for you.
- Pilot or Phase Your Decision: You don’t necessarily have to go “all or nothing.” You could test a reseller with a subset of your AWS environment if uncertain. For example, move one non-critical account or a particular project’s AWS usage to the reseller for a few months and evaluate the experience (cost savings vs. any downsides). Many large enterprises use multiple procurement channels for flexibility. Remember that committed discounts like EDP apply portfolio-wide, so ultimately, you will likely consolidate with AWS direct or one primary reseller to maximize discounts. But a pilot can inform you of your long-term choice.
- Stay Involved in Cost Management: Whichever route you choose, maintain a proactive stance on cloud cost management. If direct with AWS, continue to optimize (use AWS’s Trusted Advisor, or third-party tools, etc.) to realize value from any discount program – an EDP won’t save you money if you’re wildly over-provisioned. If with a reseller, don’t “set and forget” – hold the reseller accountable for delivering the promised savings and services. Review your bills and usage regularly (e.g., quarterly business reviews with the reseller). Ensure you get the benefits (e.g., verify if they promised 10% savings). A reseller should act as a partner in your FinOps journey, not just a passive billing agent.
A direct contract with a well-negotiated EDP/PPA often provides the best net cost and control for U.S. enterprises with large, steady AWS usage.
A reseller can unlock discounts and provide valuable services for smaller, growing organizations or those needing extra help managing AWS. Still, it’s vital to choose a trustworthy partner and lock in customer-friendly terms.
Always align the arrangement with your company’s strategic interests, and avoid any deal (direct or reseller) that compromises your visibility or agility in managing your cloud environment.
The ultimate goal is to get your business’s cloud capacity at the best possible cost on terms that don’t come back to haunt you. With careful consideration and negotiation, you can achieve that through AWS or a reseller as an informed and empowered customer.