Considerations for using an AWS Enterprise Discount Program

Thank you for joining us today. We are going to talk about considerations for using AWS Enterprise Discount Program. Just a quick show of hands. How many of us know about what the program is all about? Isn't? Uh all right. And uh are there any people who are actually considering to sign up for uh the discount program or are you already on EDP who are considering anybody who's already on uh Enterprise Discount Program? All right, great.

Alright. So the session is sponsored by Cloud Keeper. Um that's the name of the offering. We provide an end to end FinOps service to help customers run a cost efficient set up on AWS. Just a quick introduction about me. Uh I have been into industry for the last 16 years, have been helping customers uh migrate to cloud provide DevOps as a service and then uh help them run cost optimized, set up on AWS for the last 13 years. Currently, I'm responsible for the overall strategy PNL and, and uh the road map for Cloud Keeper as a business offering. I'm a certified professional architect and also a FOP certified practitioner.

In the next 15 minutes. We are going to talk about what AWS Enterprise Discount Program is all about. Uh what are the broad contours of uh the discount construct? How can we maximize the benefits of the EDP program? And then we'll also talk about how can Cloud Keepers EDP Plus offering help you even make the EDP program much better for you?

Alright. A quick interaction about us. We are a technology services company. We have worked with organizations of all different scale and sizes. We have work with enterprises, SAS providers, consumer tech organizations to help them run an efficient set up on AWS. We have been into business for the last 15 years, have been part of AWS partner network for more than 12 years now. We are a ISO 27,001 and SO two compliant organization. Currently, we manage IT. We use cost for 300 plus customers in five different continents out of those. Uh I'm sorry, the number is a bit outdated. We have um close to 30 active VDP customers with us. Um, in total, we manage a spend of close to $125 million on an annual basis. And we have been working with Amazon for many. We have delivered more than $100 million in savings to our customers so far. And we have been able to deliver an average of 20% savings on a monthly basis to all these 300 plus customers. Right. There is a team of 300 plus cloud devops and fin professionals who work with these customers in their fins and cloud journey.

A quick overview of our relationship with Amazon. We became a partner in 2013. Uh we were promoted to the highest tier uh in 2018. Many of you would already be aware, Amazon has more than 100,000 partners across the globe and less than 0.5% of those partners belong to the premier tier, right? We have more than 150 plus certified people in the organization, more than 1000 plus AWS a professionals. Um we are a globally authorized channel reseller with Amazon. And um we are, we were ranked among the top partners uh globally um who are part of the AWS well architecture partner program. Uh other than FOPS, we, we have specialized competencies for migration DevOps and data analytics. Uh and we are audited managed service provider and part of the billed partner program.

Alright. Uh what is AWS Enterprise Discount Program? It is basically designed to offer a discount on the total AWS billing for the customers who are ready to commit a certain spend uh for a certain tenure, right? High level on eligibility is that customers should be ready to spend a minimum of $1 million on an annual basis. Um one thing that Amazon requires is that your commitment cannot be lower than what you're actually spending on AWS at the moment. So if you are, let's say spending $1 million but you are comfortable committing $600,000 on an annual basis, then need to be, not be an option for you. So you need to spend at least the same amount that you're spending today on, uh, every subsequent year, you need to commit at least 10 to 20% higher. Right. Also, AWS Enterprise Support subscription is a mandatory requirement. Um please note that all these are like standard prerequisites required by Amazon. Um and it's based on our experience on those 30 plus activity p customers that we have. However, these requirements may change depending upon your geography and the segment that you belong to. For example, uh start up customers in a uh in India and UK, um can request for a lower annual commitment and the EDP program starts at a commitment of $500,000 per annum. Also, in very, very rare cases, um Amazon considers a waiver for enterprise support subscription as well in case the customers do not want to opt for that support. Right.

So what are the key considerations? How do you ensure that you are maximizing the benefits of the EDP program? So the discounts that Amazon offers primarily depends upon two parameters. One is uh the annual commitment value and the second is the tenure of the EDP. So if you are committing 2 million instead of 1 million, you get a higher discount. Similarly, if you're committing, ready to commit for the next five years, instead of three years, that further increases your discount. So these are primarily the two levers that decides the discounts that you're eligible for the annual commitment that you make.

Please be aware that that is the net invoice amount that you receive from Amazon. So it is not the actual spend that you are doing today. Let's say you are getting a 10% discount benefit on your annual spend. So the commitment is basically the actual spend minus all the credits discount benefits that you would have got in the EDP program. So many customers don't realize they calculate their commitments on the gross value, but you have to calculate it on the net value after applying all the discounts or benefits that you are going to get in the program.

Now, you can also leverage um ISP purchases. There are thousands of uh ISP products listed on EWS marketplace. Uh and you can use that to offset up to 25% of your annual EDB commitment. What that means is that if you are, let's say committing for a spend of $1 million on an annual basis, you can either spend all $1 million on consuming AWS services or you can spend $750,000 on AWS services and up to $250,000 can be offset through AWS marketplace purchases, right.

Please be aware that there is no termination for convenience during the tenure of the EP. So it's a, it's a hard commit. You are locked in um for that tenure and you are bound to um make the minimum spend that you're permitted. Right? If you are, if you are part of a, a PE firm or you have different entities in different geographies, it would make sense probably to consolidate all those entities to make a much larger commitment and benefit um and get a bit higher EDP discount benefit, right? Uh also, um you also need to look at that all those entities have to be under the same seller of record uh for Amazon. So for example, if you have one entity in US and another entity is under Amazon, Canada, you cannot consolidate both under a single EDP contract. So how do you ensure that you are ready to sign up for the uh EDP?

Um first and most important thing is you need to ensure that you are already running a cost efficient setup. You don't want to be in a situation where you are already committed $1 million. And later, you realize that your tech team is saying that, hey, we are able to uh it was not the most optimized set up. Now, we can reduce the cost by 30% and you don't feel good about it. We don't want that to happen. So ensure that all the optimizations have been applied or you are at least factoring in during your EDP commitment planning, right?

Be confident that you will be able to meet those commitment numbers in case there is a shortfall at the end of the EDP tenure, um then you basically are charged back the remaining amount. So if you're committing for $3 million spent in three years and you just end up spending $2.5 million then you will be charged a $500,000 as a shortfall fees at the end of the tenure. Right?

Do look at some other uh discount programs that you can bundle to maximize your benefits. There are certain services like Amazon provides a private pricing for almost all A W services that they offer depending upon the volume that you are consuming. So for data transfer, you should be ready to commit a minimum of 500 terabytes of consumption on a monthly basis for CloudFront. It has to be at least 100 terabytes on an annual basis. Similarly, for S3, it has to um at least one PAB byte of consumption on a monthly basis. So there, there are different uh um limits for each AWS service. Uh and then you might be eligible for additional private pricing for those service specific commitments.

Similarly, there are migration acceleration programs. There are start up programs where in Amazon provides you additional funding to move some new workloads to A A platform. So you can bundle those benefits along with your EDP benefit, right?

Most importantly, do spend a lot of time to ensuring that you are doing realistic expectation. It does not help to be conservative, it does not help to be very, very overly confident in making those commitments, right? You want to make sure that you are getting maximum discounts based on the business projections that you have. But at the same time, whatever numbers that you're coming up, we generally recommend that try to commit at least 5 to 10% lower than your actual projections so that you have some buffer in case uh there are some uncertainties, any unforeseen issues, we have all been through Covid where there was, it was like unpleasant surprise, there were many businesses were shut down. So even if that is the state, we want to make sure that we have some buffer to meet our EDP commitments.

Now, let's say we have already signed up for ADP. How do we ensure that we do not fall into the risk of getting into those shortfall, uh payment fees, right?

1. Ensure that you are monitoring those commitments regularly. There are many cases when customers do not track it actively and they realize it at a very late stage that they are not going to meet the commitments of that renewal. So ensure that you are regularly monitoring it and and you are taking proactive measures to offset that shortfall. At the end of the contract again, as we said, there will be a charge back if there is any shortfall.

2. Um you basically get, you are doing an annual commitment. So you are not committing for $3 million in three years, but you will be committing for a $1 million of annual spend for the next three years. So let's say in the first year, if you have a shortfall, um you are only spending $800,000 then you will be charged a $200,000 of fees in the 12th month that's made available to you as a credit uh in the subsequent month. So assume that you will not receive any invoice for the next $200,000 that you spend in the year two. So it's not a literally a penalty, but it's more like a cash flow impact on your business. But if at the end of the tenure, there is a shortfall, then there is no course of action. So you have to ensure that you um do that spend before the, the complete EDP tenure is taken care of what are the different options?

3. One common thing that customers look at is that, let's say it's a three year commit in the 34th or 35th month, you can do all upfront purchase for all your EC2 RDS um ElasticCache RedShift or OpenSearch uh R A or saving plan purchases. Um and then use that commitments for the next three years. Uh but that upfront payment is one mechanism to offset um your shortfall.

4. Look at, you would have already looked at all the SA solutions purchases that can be routed through AWS marketplace. But at times, you might also want to evaluate alternate solutions which are available on marketplace for anything that you're doing for your AWS monitoring, any other tool that you using for project management, which are uh if those are not being bought through AWS marketplace, then you might look, look at alternate solutions which can be purchased through AWS marketplace.

5. Also, AWS marketplace also allows uh professional services listings. So if you have outsourced any of your devs manage services or development work to some partner, do check if they are, if they can raise the invoices through AWS marketplace to you, um that will again help you offset um those commitments, right?

Even after doing all this, if you feel that you are eventually um gonna hit a shortfall, you might want to proactively talk to your account manager and your EDP partner, um appraise them of the situation and try to figure out what are the possible scenarios to avoid that shortfall.

One common thing that we have seen is early renewal where let's say you are not able to meet an obligation of 3 million for three years. So at the end of two years, you do a renewed contract where you're saying, I'm ready to commit, let's say five or $6 million for the next five years. So it is still a higher commitment for Amazon. Um they will be happy to do that early renewal, but uh as soon as you sign the new EDP contract, your existing EDP contract stands canceled and there is no shortfall obligation in that case, right?

In some very, very rare scenarios, Amazon may also provide you an extension for three months to meet your commitment obligations, but that's, that's very, very rare.

Uh how can partners help you enhance your EDP construct with Amazon? So uh first thing is again, uh many partners actively would have worked on multiple EDP deals with Amazon team with different customers so they can help you with some of the best practices. They can help you determine what are the appropriate commit values that you should look at um and ensure that those commitments are actually aligned with your business goals. Uh they just not work with your, they will ensure that they work with your engineering team to understand whether the setup is optimized, they will work with your finance team that uh how do they perceive those commitments? Is there a risk and from the business team that what is the business growth projection for the next few years? Right?

Then, uh uh again, partners as a partner, we do get some benefit from Amazon uh for any, any EDB routed through us. So partner can extend a higher discount or might be ok to take a lower commitment from you. Right. In many cases, partners will bring a lot, many value added benefits. It could be uh some additional recommendation on cost optimization. It could be custom reporting on a monthly basis. There are many organizations that only work on based on the purchase order. They, they, they need the purchase order for processing the monthly invoices. So a partner can ensure that they are working. They are aligned with uh your internal compliance and financial processes.

Um if we talked about uh the seller of record for Amazon, you cannot consolidate EDP if your entities are billing through different Amazon sellers of record, but a partner can uh sign a single EDP contract and they can still raise invoice to you for different entities, right?

Similarly, if you want a local currency invoicing, uh and if you're not in US D if you also want to like hedge the conversion rate throughout the EDP 10, your partners should be able to help you achieve that, right? And, and there might be additional value added benefits um uh like professional services or access to a platform uh that those partners can bring in quickly talking about Cloud for EDP Plus.

Um um so we work with Amazon and we have worked with uh 30 plus customers. Um we work with the customers to help them identify the appropriate commitment value and then we basically are able to offer a higher discount, uh, in lieu of a lower commitment. So, whatever commitment that Amazon requires, we are ok to take a 10% lower commitment from the customers. We understand that customers are anyways, very conservative by doing those commitments. So most of our customers actually end up spending anywhere between 30 to 70% higher than what they have actually committed. So 10% lower commitment is not really a risk for us, but it helps customers make a better business use case internally to sign off on those commitments, right?

Uh we also help with the reservation management, which basically means is that you can continue to run your infrastructure on demand while we take care of um reservation commitments with Amazon and bill you at reserve like pricing.

Um for your computer usage, there is also an option of partner i enterprise support where partners act as your point of contact and we will have a back to back enterprise support agreement with Amazon because Amazon allows us to consolidate multiple EDP customers under a single enterprise support contract. We can uh we benefit from the tiered pricing and hence we can offer a lower price for partner i enterprise support while we do offer the same slas as AWS direct enterprise support to the customers.

In addition to that, there are two other levers Cloud Keeper Lens is our cost analytics and governance platform. Customers get a continued access to the platform throughout uh the engagement. Uh there are a lot many insights like uh daily, weekly, monthly spend trend, uh break up of different services. What is the cost of each S3 bucket, each CloudFront distribution, each snapshot uh provisioned in your account. Uh and then you can configure notifications for any cost spikes, any reservation utilization going down. Um and you can integrate those notifications through emails or Slack channels. There is also a dedicated team that works with you uh and conducts well. Architected reviews provides you setting guidance for adoption of new services. We also track the anomaly at our end. So so many cases, customers either would not have set up a alert for themselves or in many cases they have set up so many alerts that there are so many false positive. Our team ensures that they eliminate those false positives and we reach out to your team um only when it's a actual anomaly that needs some intervention. And then we can also help you establish Fino KPIs and unit economies depending upon your business needs. Whether you want to look at cost per order, cost, per transaction cost per 100,000 views on your website. Uh we can help establish those metrics.

There are three different levels how we help customers optimize their cost.

1. One is price optimization that we do through EDP discount, private pricing contract, discounted price for partner led support.

2. Second is resource optimization. We help you identify, underutilize idle resources, eliminate waste. Look at some architectural changes, can you move to spot, can you adopt service less architecture? Um and that helps you earn reducing your consumption of A services and hence optimize cost.

3. And last last lever is to bring in, bring in that governance and accountability within the team to ensure that each team has a budget and they are responsible to maintain that budget and they have a real time visibility if they are overshoot those budgets.

This is just a very high level visibility of what are the different support plans that Amazon offers. Uh business support is again not an option in AWS EDP program, but this is just listed here for a comparison purpose. As you would see in the partner enterprise support model, we we primarily do not offer any training credits, but other than that, we offer the same SLAs as the direct enterprise support. However, um we offer a discounted price and we also waive off the minimum $15,000 of monthly threshold that Amazon requires.

This is just a like model that end customer engages with AWS and then a uh sorry with the partner. And then it's the partner team that works with either works directly to help resolve the query at hand or uh we work internally with Amazon team to get a response to the queries. Here is the remaining formatted transcript:

This is how we help.

Um so F foundation defines three phases of um uh cost optimizing, inform, optimize and operate. We, we are working with customers to help optimize i all three different phases.

There are some of our referenceable customers.

Alright. That's all that we have today. I hope it was useful for you today. I'm happy to take any questions that you may have.