The Challenge

A Midwestern regional bank (3,200 employees, retail and commercial banking across Illinois, Indiana, and Wisconsin) migrated core banking workloads to AWS GovCloud and standard regions. Annual AWS spend grew from $3.1M to $4.1M in twelve months (34% year-on-year increase) driven by production migration, analytics consumption, and compliance tooling procurement.

The expiring one-year EDP carried only a 9% discount, leaving commercial terms outdated. AWS Marketplace purchases for Splunk, Qualys, and Trend Micro added an 18% channel premium versus direct vendor contracts—costing approximately $180,000 annually. The bank lacked visibility into Savings Plans and Reserved Instances, operating with ad-hoc RI purchases misaligned to workload stability or multi-year forecasting.

The Approach

Redress executed four integrated workstreams with the bank's cloud operations and procurement teams to restructure its entire AWS commercial framework.

1. EDP Renegotiation and Baseline Optimisation

Comprehensive consumption analysis revealed $4.1M annual spend distributed across compute (35%), database and analytics (28%), networking and storage (22%), and other managed services (15%). Compute and database consumption represented 63% of total spend and demonstrated stability patterns suitable for multi-year commitment. We modelled a three-year EDP at 17% discount—a significant improvement from the original 9%—which provided better pricing for the bank while offering AWS revenue predictability. This approach aligned the bank's growing cloud investment with commercial terms that reflected its strategic commitment to the cloud platform.

2. Marketplace Procurement Restructuring

The bank was paying approximately $750,000 annually for critical compliance and security tools (Splunk, Qualys, Trend Micro) through AWS Marketplace. Redress negotiated direct vendor contracts for each tool, applying AWS partner credits and volume commitments to substantially reduce costs. Splunk was secured 22% below Marketplace rates, Qualys 18% below, and Trend Micro 16% below. This restructuring reduced the overall Marketplace channel premium from 18% to under 6%, retaining Marketplace distribution only for lower-volume tools where operational simplicity justified the modest premium.

3. Savings Plans Migration and Optimisation

The bank's existing Reserved Instances portfolio was fragmented and misaligned to workload reality. Workload stability analysis identified 65% of compute and database consumption as predictable and suitable for Savings Plans coverage. The bank committed to a portfolio of three-year Compute Savings Plans covering $2.1M in baseline compute spend and Database Savings Plans covering $1.1M in database workload, delivering 18–24% discounts versus on-demand rates and improving overall blended cost structure.

4. Governance and Ongoing Optimisation

Quarterly cost optimisation reviews were integrated into the bank's cloud governance cadence. Monthly dashboards tracked EDP utilisation, Savings Plans coverage, Marketplace spending by category, and RI expiry schedules. A dedicated cloud cost owner was appointed and AWS billing aligned to the finance team's operational reporting cycles, creating structured visibility into cloud spend drivers.

"We had been so focused on migration velocity that we hadn't optimised our commercial framework. Three-year commitment felt risky, but Redress showed us our spend was stable enough to secure 17% discount. Combined with Marketplace restructuring and Savings Plans coverage, we've locked in $1.27M in annual savings going forward—with no impact on our cloud capability roadmap. That's a game-changer for cloud ROI."
VP Cloud & Infrastructure Strategy, Midwestern Regional Bank

The Outcome

The programme delivered $3.8M in three-year savings:

  • EDP Discount Improvement: $1.6M. The 9%-to-17% discount improvement on $4.1M annual spend yields $1.27M annual savings ($1.6M over 3 years, conservative assumption of 5% annual growth).
  • Savings Plans Optimisation: $1.2M. Blended discount improved from 14% to 21% on covered compute and database consumption, delivering $400K annually ($1.2M over 3 years).
  • Marketplace Restructuring: $1.0M. Direct vendor contracts with AWS credits reduced Marketplace premium from 18% to under 6%, delivering $330K annually ($1.0M over 3 years).

Total: $3.8M savings over the EDP term with no reduction in cloud footprint, migration velocity, or tool capability.

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Key Takeaways

1. EDP Renegotiation Requires Baseline Accuracy and Leverage: The bank's original 9% EDP was negotiated based on estimated spend projections. Three years later, with actual $4.1M annual consumption and demonstrated stability, the bank had significantly more leverage to renegotiate. Achieving a 17% discount on a three-year commitment is standard practice for AWS customers with $3M+ in annual spend. The critical factor is demonstrating actual consumption patterns and business commitment to multi-year cloud investment.

2. Marketplace Channel Premium is a Silent Cost Driver: AWS Marketplace convenience carries a 15–25% markup typical in software licensing and security tools. For high-volume purchases (Splunk, vulnerability scanning, endpoint protection), direct vendor negotiation combined with AWS partner credits typically recovers 15–20% of Marketplace cost. Marketplace remains appropriate for niche, low-volume tools; commodity compliance and security tools belong in direct vendor contracts with negotiated enterprise pricing.

3. Savings Plans Outperform Ad-Hoc Reserved Instances: The bank's previous RI strategy was reactive: purchasing instances as workloads went into production without multi-year planning. This approach yields suboptimal blended costs. Savings Plans (Compute and Database) deliver superior discounts (18–24% vs. 15–20% for RIs), provide flexibility across instance types and sizes, and enable alignment with multi-year capacity planning. For the 65% of compute and database consumption that is stable and predictable, Savings Plans are the appropriate tool.

4. Marketplace Restructuring Delivers Quick, Tangible Wins: The Marketplace restructuring took two months from initial vendor contact to signed direct contracts. The $330K annual savings from reduced channel premium is immediate and visible in the first month of direct billing. This represents the quickest "win" in AWS cost optimisation programmes and provides credibility for longer-term initiatives like Savings Plans expansion.

5. Governance Structures Sustainable Cloud ROI: The bank's 34% year-on-year spend growth reflects successful migration and platform adoption. Without commercial framework renegotiation, this growth would have been expensive. Three-year EDP commitment plus Savings Plans coverage plus Marketplace restructuring provided commercial visibility and cost predictability, enabling the bank to continue aggressive cloud migration with confidence in long-term cloud ROI.