AWS Cloud Benchmark Case Study

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.