Top 15 AWS Contract Renewal Strategies
Renewing a major AWS contract is a high-stakes endeavor. CIOs and procurement leaders must balance cost optimization with flexibility and risk management to secure the best deal.
Below are 15 proven strategies to guide your AWS contract renewal, each with key considerations, practical benefits, and real-world insight:
- Perform a Comprehensive AWS Usage Audit and Optimize Costs
- Considerations: Deep-dive into your current AWS usage to pinpoint cost drivers and inefficiencies. Identify underutilized resources (e.g., idle instances, overprovisioned storage) and eliminate waste. Also, evaluate which services (EC2, S3, etc.) consume the most spending. Optimize your environment before renewal—rightsizing workloads, purchasing reserved capacity, and shutting down unused resources will lower your spending baseline. This prevents AWS from basing the new contract on inflated usage levels.
- Practical Impact: By entering negotiations with a leaner AWS footprint, you strengthen your leverage and avoid “locking in” unnecessary spending. A cleaner baseline means any committed spend or discount is aligned with real needs, not waste. It also signals to AWS that you practice disciplined cost control, setting the tone for a cost-focused negotiation.
- Example: One company’s pre-renewal audit revealed that ~20% of its EC2 instances were underutilized, and rightsizing them drove significant savings. This audit-informed approach allowed the firm to negotiate a lower annual commitment, knowing their true requirements, and saved millions by not paying for idle capacity.
- Define Clear Renewal Objectives and Requirements
- Considerations: Establish what a “successful” renewal looks like before talking numbers with AWS. Are you aiming to cut annual cloud costs by a certain percentage? Increase contractual flexibility or add specific terms (like better payment or exit options)? Identify your top priorities – whether cost reduction, improved service levels, more flexibility, or all of the above – and get executive agreement on them. Involve your CFO, CTO, and business unit leaders to set concrete goals (e.g., “reduce AWS spend by 15% while securing the ability to exit a portion of the deal if needed”).
- Practical Impact: Clear objectives create a guiding star for negotiations. They help you stay focused on what matters – for instance, if flexibility to scale down is a priority, you might trade a bit of discount to get that clause. Well-defined goals also prevent internal misalignment during talks. When everyone – from IT to Finance – agrees on priorities, you can make decisions and concessions confidently, knowing they support your broader business strategy.
- Example: If your primary goal is cost savings, you might set a target like “achieve 20% overall cost reduction.” During talks, you can then weigh trade-offs (perhaps accepting a 3-year term to get that discount). Conversely, if flexibility or risk mitigation is key, your objective might be “no restrictive auto-renewal, and ability to adjust commitment if our strategy changes.” Having these requirements outlined ensures you negotiate for outcomes that meet your organization’s needs.
- Align Internal Stakeholders and Build a Cross-Functional Negotiation Team
- Considerations: Treat an AWS renewal as a team sport. Assemble a cross-functional negotiation team that includes IT architects, Finance/Procurement, and Legal counsel (and involve executives like the CIO/CFO as sponsors). Ensure all stakeholders understand the agreed objectives (from Strategy #2) and their roles. IT should provide usage forecasts and technical insight on AWS proposals, Finance will model pricing and verify savings, and Legal will scrutinize contract language for risks. Communicate frequently and present a united front to AWS.
- Practical Impact: An aligned team prevents internal missteps that AWS could exploit. AWS can’t play one group off another when everyone is on the same page about the maximum budget, key terms, and walk-away points. For example, if IT and Finance disagree on acceptable spending, AWS sales might sense that and push a higher commitment. By coordinating internally, you avoid undermining your position. A unified front – especially with visible executive support – signals to AWS that this deal is highly scrutinized and that your organization is serious about getting favorable terms.
- Example: A global company formed a negotiation “war room” with IT, Finance, and Legal representatives. This team pre-agreed on their bottom-line price and non-negotiables. During talks, when AWS tried to upsell new services, the technical lead could immediately evaluate need versus cost while Finance checked it against budget targets. The result was a cohesive response to AWS at each step, increasing the company’s negotiation leverage since AWS encountered a well-prepared, no-nonsense team instead of disparate departments.
- Engage Independent Advisors and Benchmark the Market
- Considerations: Don’t go blind – leverage independent cloud licensing advisors (e.g., Redress Compliance) or cloud cost consultants for expert guidance. Third-party experts specializing in AWS contracts can reveal options and “gotchas” you might miss. They often have intel on AWS’s discount playbook and can provide pricing benchmarks from similar deals. Use these advisors (and tools like cloud cost management platforms) to validate AWS’s proposals and model “what-if” scenarios. Also, research industry benchmarks through peer networks or analysts: know what discount percentage and terms companies with your spend level typically get.
- Practical Impact: External insights arm you with data to challenge AWS’s offers. Benchmarking ensures AWS isn’t lowballing your discount by claiming it’s the best they can do – you’ll know what peers are paying and can demand comparable or better terms. Advisors can also run interference, such as managing a quick RFP with Azure/GCP to give you leverage (see Strategy #7). While advisors charge fees, those costs are trivial compared to potential savings on a multimillion-dollar AWS deal. They might spot, for example, that AWS assumed overly high usage in a proposal or uncover a hidden discount program.
- Example: A healthcare firm hired a third-party cloud consultant to review its proposed AWS renewal. The consultant benchmarked the pricing and found the company was in the wrong volume tier for data transfer, leading to excessive charges. Armed with that knowledge, the firm renegotiated the data transfer rates and saved an additional ~15% annually. Knowing where AWS can flex this kind of market insight can mean the difference between an average deal and an excellent one.
- Plan Renewal Timing Strategically
- Considerations: Start renewal discussions early – ideally 6 to 12 months before your contract expires. An early start allows you to evaluate alternatives, iterate through multiple proposal rounds, and avoid negotiating under last-minute pressure. In parallel, align your negotiation timeline with AWS’s fiscal calendar. Aim to finalize the deal in periods when AWS is hungry to close sales, for example, just before quarter-end or year-end, when sales teams rush to hit quotas. If your renewal naturally occurs off-cycle, you can extend or shorten the current term slightly to land the next renewal in Q4 when AWS may be more generous.
- Practical Impact: Timing can significantly improve your bargaining position. By engaging early, you ensure you’re never backed against a wall by an imminent deadline – you can walk away from a bad offer and return later if needed without service interruption. Early negotiations also let you methodically push back on unfavorable terms and escalate issues rather than accepting subpar terms in a last-minute scramble. Coordinating with AWS’s sales cycles means you’re talking when they have internal pressure to close the deal. As a result, AWS reps often show more flexibility – extra discount points or credits magically appear when it’s the final week of their quarter or fiscal year.
- Example: One tech company began renewal talks a year in advance and timed its final signing for December (AWS’s year-end). The prolonged negotiation allowed them to reject two mediocre offers. As the year-end deadline approached, AWS, eager to book the revenue, conceded to far better pricing and terms than initially proposed. The CIO noted that starting early and leveraging AWS’s Q4 timing turned a “good” deal into a great deal.
- Consolidate and Centralize Your AWS Spending
- Considerations: Take stock of all AWS usage across your enterprise – multiple departments, business units, or regional teams might each have separate AWS accounts or contracts. Centralize these into one unified agreement where possible. By pooling all workloads and cloud spending into a single negotiation, you increase the committed volume, which AWS rewards with bigger discounts. Also, ensure all stakeholders internally agree not to “rogue renew” on their own. During your enterprise negotiation, no department should separately renew or sign a side contract – everything should funnel through the main deal for maximum leverage.
- Practical Impact: Consolidation boosts your negotiating power through sheer scale. AWS’s Enterprise Discount Program (EDP) and pricing tiers give much better terms to a $10 million/year customer than two separate $5 million customers. Presenting one large commitment can unlock higher discount tiers and incentives that smaller, fragmented deals would miss. It also simplifies management and ensures consistent terms across your company (no more mismatched contract terms or forgotten accounts paying full price). AWS is more likely to bend for a single big contract than multiple small ones.
- Example: A multinational firm discovered various divisions were individually spending on AWS, each too small to get top-tier discounts. They consolidated these into a single enterprise agreement. By doing so, their collective bargaining volume shot up, and AWS offered an enhanced discount bracket. Additionally, by unifying contracts, they avoided duplicative support charges and gained a holistic view of usage for better planning. The result was a larger discount and a cleaner, company-wide AWS deal that saved money and administrative effort.
- Leverage Multi-Cloud Competition as a Bargaining Chip
- Considerations: Even if you plan to remain primarily on AWS, ensure AWS knows they are not your only option. Engage Azure and Google Cloud in exploratory discussions or a formal RFP process for comparable workloads. Obtain indicative quotes/proposals from these competitors (or at least make AWS aware that you are evaluating them). You don’t need a full migration plan; even a credible threat to move a portion of workloads can create pressure. Additionally, mention any multi-cloud strategy your company is considering – for example, “We are evaluating diversifying some workloads to Azure for resilience.” This signals AWS that its share of your IT spend is at risk if they don’t offer a compelling deal.
- Practical Impact: Competitive tension is one of your strongest levers. AWS sales reps know that if a customer is also courting Microsoft or Google, they must sharpen their pencil or risk losing business. We often see cloud providers respond to competition with special incentives – AWS might counter a rival’s bid by boosting your discount or throwing in extra credits to match pricing. In one case, simply inviting a competing quote led AWS to improve an offer by several million dollars. Even if you never intend to switch, demonstrating that you could usually prompt AWS to be more flexible on price and terms.
- Example: A large enterprise publicly hinted at a multi-cloud strategy and engaged Azure and GCP in parallel talks. Considering this, AWS offered additional one-time migration credits and a bigger discount to dissuade the customer from shifting any workloads off AWS. In effect, the customer created a bidding atmosphere – without moving an application, they gained concessions like free usage credits that AWS had not initially offered. The takeaway: AWS will often go much further when they know another provider is at the table.
- Push for Maximum Discounts and Custom Pricing
- Considerations: Regarding pricing, everything is negotiable at AWS’s scale. Don’t settle for the default publicly published rates minus a modest EDP discount. Aggressively seek the highest percentage discount your spend can justify, and then some. Enterprise customers spending 7+ figures annually routinely achieve double-digit percentage discounts off list prices – if you’re a big spender, start negotiations aiming for 20–25% off and let AWS counter from there. Also, negotiate service-specific pricing for your biggest cost drivers. Identify your top-cost services (maybe EC2 compute, S3 storage, or data egress) and ask for deeper discounts on those in addition to the blanket EDP rate. If you ask, AWS has been known to give special private pricing for massive usage (e.g., a custom per-GB rate for huge S3 volumes or reduced data transfer fees).
- Practical Impact: Every extra discount point lowers your cloud bill, potentially saving millions over the contract term. A strong EDP discount combined with targeted price breaks on heavy-use services maximizes value. For example, negotiating a 15% overall discount and 30% off your largest S3 dataset usage yields far more savings than the standard deal alone. It also locks in these savings for the contract duration, insulating you from future price changes. Essentially, you ensure you pay the least possible for each service you consume rather than generic pricing.
- Example: One enterprise spending ~$50 million annually on AWS negotiated an ~18–20% EDP discount, significantly cutting costs. In contrast, another customer with a ~$1 million/year commitment only got ~5–6% off, leaving savings on the table by not pushing harder. In another case, a company with enormous data egress fees secured a private pricing addendum that gave them a special 25% lower rate on data transfer on top of their EDP discount. These examples show that by aiming high and asking for custom deals, you can achieve far better-than-standard pricing from AWS.
- Structure Commitments for Flexibility and Realistic Growth
- Considerations: AWS often seeks a multi-year commitment with built-in yearly spending increases (they might assume ~20% YoY growth in usage). Be cautious when overcommitting to these rosy projections. Base your committed spending on conservative, data-backed forecasts (leveraging your usage audit and business growth plans). It’s usually wiser to slightly under-commit and exceed it than to over-commit and risk paying for a capacity you never use. Negotiate a flexible commitment structure: a ramp that decreases or adjusts over time instead of only increasing. If you expect to optimize or potentially shift some workloads to other environments, you can propose a declining commitment each year (e.g., $X in year 1, lower $Y in year 2). Also, it seeks provisions to reallocate or carry over unused commitments from one year to the next, and even the right to adjust the commitment if business conditions change (like in a downturn or after a divestiture).
- Practical Impact: A flexible commitment protects you from the dreaded scenario of “paying for air,” i.e., paying for cloud capacity you don’t use. By aligning commitments to realistic needs, you avoid costly shortfall penalties or wasted budget on unused services. Features like yearly commit adjustments or carry-over ensure you’re not stuck in a straitjacket if your cloud strategy evolves. In practice, AWS can accommodate these requests for valuable customers – they’d rather lock you in at a slightly lower commitment than see you balk at an overly aggressive one. Flexible structures also give you negotiating leverage mid-term: if AWS usage spikes because of a project, you might have a clause to review and increase discounts, and if usage falls, you aren’t trapped overpaying.
- Example: A large fintech enterprise negotiated a decreasing annual commitment over a 3-year AWS deal – each year’s minimum spend was lower than the previous year. This was based on their plan to aggressively optimize and repatriate some workloads. AWS agreed, and the company easily met each reduced commitment while never overpaying for unused capacity. In another case, a tech firm facing an unexpected business downturn convinced AWS to amend their contract mid-term, reducing their remaining commitment by 15% rather than forcing them into non-compliance. These real-world cases show that if you transparently justify your needs, AWS can show flexibility. Always remember: it’s better to have a smaller commitment that you know you can fulfill (or exceed) than an inflated one that becomes a financial liability.
- Secure Credits, Funding, and Incentives from AWS
- Considerations: Beyond discounts, AWS often has funding programs and credits available – make sure to ask for them. For example, the AWS Migration Acceleration Program (MAP) offers service credits to offset costs when migrating new workloads to AWS. Push beyond the standard: negotiate additional upfront credits as part of your deal, especially if you plan significant projects. You can request a lump sum of AWS credits applied in the first year or two to ease the cost of ramping up. Similarly, ask AWS to fund training sessions or professional services hours to support your cloud adoption. If you’re launching a big initiative on AWS (analytics platform, IoT rollout, etc.), see if AWS will co-invest – they might provide extra credits or dedicated support to ensure the project’s success. Also consider performance or SLA-related credits: for example, credit back for any quarter where a service underperforms (tying into Strategy #12). Essentially, create a checklist of all possible incentives (credits, free consulting, training, marketing funds) and bring it to the table.
- Practical Impact: Every dollar in credits or funded service is a dollar you don’t have to budget. Incentives can significantly improve your total cost of ownership. It’s not uncommon for savvy negotiators to get credits covering 10–25% of the first-year costs of a new workload by stacking AWS incentive programs and bespoke offers. Credits are often easier for AWS to approve than an equivalent discount (credits may come from separate budgets), so AWS might give a large one-time credit pool rather than budging on the percentage discount. Training and professional services funding also accelerate your team’s proficiency and project timelines at AWS’s expense. In short, don’t leave free money or support on the table – it can mitigate migration expenses, improve your team’s skills, and reduce the risk of adoption.
- Example: In its renewal, a retailer negotiated $500,000 in AWS credits spread over the first year, effectively subsidizing the build-out of a new e-commerce application on AWS. AWS also agreed to provide on-site training for the retailer’s engineers on advanced cloud services. These incentives covered roughly 25% of the project’s first-year costs and ensured the team was up to speed. Another company secured a commitment from AWS to fund a joint marketing event and case study as part of the deal, although not a direct credit, this saved the company’s marketing budget and cemented AWS’s investment in their success. The key is that AWS’s contributions added tangible value beyond pricing, making the overall deal more favorable.
- Negotiate AWS Support Costs and Value-Adds
- Considerations: Enterprise Support is often a mandatory add-on for large AWS accounts, typically charged as a percentage (3–10%) of your AWS spending. Do not treat this as sacrosanct. Put support fees on the negotiating table just like any other cost. Ask AWS for a reduced support percentage or a cap on support fees, especially as your usage grows. For example, negotiate that support will be 5% of spending up to $X, then free beyond that, or simply a flat annual fee that could be lower than the % of spend model. If AWS resists, remind them that they would get less support revenue as you optimize costs (or scale down), so a sustainable support fee benefits both sides. Also, consider negotiating enhanced support value: ask for a dedicated Technical Account Manager (TAM), solution architects’ time, or faster response SLAs to be included at no extra charge. If your AWS spend is large, you have room to argue for VIP treatment in support.
- Practical Impact: AWS support fees can amount to hundreds (even millions) over a contract’s life, so shaving those costs is direct savings. For instance, 3–5% on a $5M/year spend is $150k–$250k/year – negotiating that down or capped can free significant budget. By tackling support costs, you prevent AWS from quietly reclaiming discount dollars through support charges. Moreover, by securing additional support services (like a named TAM or service credits for support issues), you ensure you get better value for the support dollars you pay. You don’t want to be in a position where your cloud spending goes down, but your support percentage stays high, effectively penalizing you for cost-saving. A well-negotiated support clause provides cost predictability and premium service, aligning support costs with the value received.
- Example: A global manufacturer negotiated its Enterprise Support fee down from 7% to 5% of billings, saving about $200k annually, and got AWS to include a senior TAM who would meet with them weekly at no extra cost. Another firm obtained a clause that as long as they committed to a certain spend, their support fee was capped and wouldn’t increase with usage. Later, when their AWS usage doubled, their support costs remained flat – a huge win compared to the normal scaling formula. These cases illustrate that companies can reduce costs and enhance support quality by treating support as negotiable.
- Ensure Strong SLAs and Compliance Protections
- Considerations: While AWS guarantees standard service uptime, large enterprises should push for stronger Service Level Agreements (SLAs) and tailored remedies to their needs. Identify your most critical services and negotiate higher uptime or performance commitments (99.99% uptime for a mission-critical database or specific latency thresholds for network performance). More importantly, meaningful remedies should be defined if AWS misses the mark: service credits, fee reductions, or even the right to terminate a service without penalty after repeated SLA breaches. At the same time, address the contract’s regulatory or security compliance needs. If you operate in a regulated industry, ensure AWS contractually acknowledges data residency requirements, necessary certifications, or support for compliance audits. For instance, commitments should be made to AWS to maintain certain security standards or assist with compliance reporting as needed.
- Practical Impact: You protect your business from downstream risks by embedding robust SLAs. If AWS has an outage or performance issue, pre-negotiated credits or exit options compensate you (or let you escape a failing service), so you’re not left holding the bag. This mitigates financial risk and incentivizes AWS to prioritize your workloads for reliability. Incorporating compliance terms ensures that using AWS doesn’t put you at odds with legal obligations – for example, AWS might commit to keeping your data in certain regions or notify you of any changes affecting compliance. Essentially, you make AWS accountable for keeping the lights on and meeting your organization’s specific operational continuity and compliance needs.
- Example: A financial services company negotiated a custom SLA where if AWS’s uptime for their core compute service fell below 99.9% for a quarter, AWS would credit 20% of that quarter’s fees for the service back to the company and allow an early contract exit for that service if issues persisted. They also added a clause that AWS must maintain SOC 2 and ISO 27001 compliance (important for the bank’s regulators) and assist with any audit requests, giving the bank confidence that moving to AWS wouldn’t compromise their regulatory stance. These provisions ensure that the enterprise’s risk is minimized and AWS shares responsibility if service levels or compliance obligations aren’t met.
- Scrutinize Contract Fine Print for Hidden Pitfalls
- Considerations: The detailed terms of your AWS contract can hide costly surprises, so review every clause carefully (with Legal’s help) before signing. Watch out for common pitfalls like data egress fees – AWS’s fees for transferring data out can be steep, so negotiate discounts if you have heavy outbound data or at least be aware if none are offered. Check for any auto-renewal clauses that could renew your contract without explicit re-negotiation – you’ll want the contract to expire or require renewal discussion, not roll over on AWS’s terms. Ensure the contract scope is clear: which accounts, regions, and services are covered by your discounts? (For example, new AWS services launched next year – will they be included at your discount rate or not?). Be wary of any language allowing price increases on certain services or support fees – try to lock in pricing or caps so AWS can’t unilaterally raise rates. Also, verify any audit or license compliance clauses. While AWS bills on usage, make sure no clause lets AWS audit your use of third-party software licenses on AWS and charge penalties (this is more common with software vendors, but double-check). Finally, document all promised discounts, credits, and special terms in writing – handshake deals with the account manager are not enough.
- Practical Impact: Addressing the fine print upfront prevents headaches (and costs) later. For instance, clarifying data egress fee terms can save you from an unpleasant budget overrun if you later repatriate data or use multi-cloud architectures. Removing auto-renewal ensures you’ll have leverage at the next renewal instead of being stuck. You ensure you receive all the benefits you negotiated by nailing down every custom term and exclusion. E.g., if you got a special 30% off a specific service, the contract should state how long that pricing lasts so it doesn’t silently revert to the list price. Clear scope and renewal terms prevent AWS from saying later, “Oh, that new service isn’t in your deal” or “Your contract rolled over, so your discounts dropped.” Ultimately, a meticulous review of contract language protects the value you fought for and prevents AWS from pulling any “fine print tricks” that undermine your savings or flexibility.
- Example: A retailer negotiating renewal discovered an auto-renew clause draft that would have locked them in for an additional year at the same terms if they didn’t give notice 90 days before expiration. They struck that clause, ensuring the next renewal had to be negotiated on their terms. In another case, a media company insisted that their contract state that any new AWS services they adopt will inherit the same discount level, protecting them as they modernize with new AWS offerings. They also negotiated a provision that data egress rates would remain at current levels for the term (no surprises if AWS changed pricing) and got first-right-to-negotiate on any renewal. These fine-print tweaks safeguarded their deal’s value and kept AWS accountable. Always read the small print and ask “What if…?” for various scenarios.
- Leverage Executive Relationships and Non-Monetary Value
- Considerations: Don’t underestimate the power of going “above and beyond” the normal sales chain when needed. Engage your C-suite with AWS’s senior leadership to show how important the partnership is. For example, have your CEO or CIO call AWS’s Enterprise Sales VP to affirm that while you want to continue the partnership, the current deal must improve for that to happen. These executive-level touches can prompt AWS to escalate your requests internally. Additionally, consider what non-monetary give-and-take your organization can offer AWS in return for better terms. AWS highly values customer success stories, references, and public testimonials. You might offer to participate in a case study, speak at AWS re: Invent, in a press release about your cloud strategy, or serve as a reference for other customers. You can also commit to being an early adopter of new AWS services (if they align with your needs) so AWS can tout your usage as a win. Use these as bargaining chips: make it clear that in exchange for more favorable pricing or terms, you are willing to deepen the partnership in ways that help AWS’s business.
- Practical Impact: Involving top executives can break logjams. AWS sales teams often make additional concessions if they know a major customer’s C-suite is personally engaged – it signals a large future business and willingness to partner. We’ve seen deals improve after a single well-placed CEO-to-AWS call, securing an extra 5% discount that the account manager alone couldn’t approve. Offering AWS marketing value (like public references) can translate into monetary value for you. Essentially, you give AWS something it cares about (market credibility, case studies) and get better pricing or freebies in return. It fosters a win-win: you become a celebrated customer and get a better contract. Ensure your promises are contingent on finalizing your desired deal (e.g., “We’ll do a joint press release once we sign a contract that meets X conditions”). This strategy turns the negotiation from purely adversarial to a collaborative partnership discussion, without you giving up financial ground.
- Example: A CIO reached out to AWS’s head of sales to express that their company was prepared to expand cloud investments significantly, but only if the renewal terms reflected a true partnership. The conversation led AWS to re-engage with a fresh perspective, ultimately granting more flexibility and credits. Additionally, the company agreed to be featured in an AWS case study about innovation in exchange for an improved rate. Similarly, a tech firm offered to join AWS’s customer advisory board and serve as a reference account; AWS, in turn, sweetened the contract with additional training credits and a larger discount. These companies turned their stature and willingness to collaborate into concrete contract benefits by leveraging executive relationships and intangible assets.
- Maintain a Plan B and Be Willing to Walk Away
- Considerations: Perhaps the most powerful strategy is your mindset: be prepared to say “no” if AWS won’t meet your critical needs. Develop a credible Plan B for your cloud workloads. This could mean continuing on a month-to-month basis without a new contract (using on-demand pricing or reserved instances ad hoc), migrating a portion of workloads to another provider, or temporarily bringing some systems back on-premises. Ensure your leadership (CEO, CFO, board) is aware of and supports this fallback plan – nothing undercuts a negotiation more than AWS sensing you must get a deal at any cost. When negotiating, tactfully communicate that you do have alternatives. For example, “If we can’t reach an agreement, we can leverage our other data center or Azure for some workloads for now.” This isn’t about making threats; it’s about calmly making it known that signing a bad deal is not your only option. Internally, be ready: have cost estimates for running without an EDP, know which systems you could shift or cut if needed, and perhaps set a firm cutoff date by which you’ll pursue Plan B if talks stagnate.
- Practical Impact: The willingness to walk is the ultimate leverage. If AWS believes (and sees evidence) that you are ready to forego a renewal, their negotiation posture will often change dramatically. They may return with a significantly improved offer at the 11th hour rather than lose the business. Even if they call your bluff, your organization is not caught flat-footed; you can execute your Plan B and continue operations, albeit perhaps less optimally, without bowing to an unfavorable contract. In some cases, customers who walked away from an AWS EDP (choosing to optimize costs independently) found that AWS returned later with a much better proposal when it became clear the customer would leave money on the table rather than sign a bad deal. At the very least, having Plan B ensures that any deal you sign is on terms you can live with because you were genuinely prepared to reject one that wasn’t.
- Example: An enterprise’s AWS renewal negotiations hit a stalemate – AWS wouldn’t budge beyond a 10% discount, and the customer demanded 20%. Backed by their CFO, the company decided not to renew the EDP and shifted some new projects to a different cloud while optimizing existing AWS usage. A few months later, AWS reapproached them with a revamped offer: an 18% discount and added credits, showing far more flexibility. The customer’s credible willingness to walk forced AWS to reconsider and ultimately deliver a proposal per the customer’s requirements. This example underscores that saying “no deal” is sometimes necessary to eventually get the right deal. Always know your walk-away conditions – if AWS can’t meet them, you must be ready to politely walk and pursue other options.
Bottom Line: By applying these strategies, CIOs and procurement leaders can approach AWS renewals with a tactical advantage. The goal is to balance cost, flexibility, and risk, achieving substantial savings while preserving adaptability. In practice, that means doing your homework (on usage and market rates), rallying your internal team, creating competitive tension, and not hesitating to push AWS on every front, from pricing to contract terms. AWS wants to keep your business, so use that to negotiate a renewal on your terms, not just theirs. With early planning, solid data, and a bit of resolve, you can significantly reduce cloud costs and secure a more favorable, future-proof AWS agreement. Good luck!
