The Challenge

A German online services company with approximately 1,400 employees and a SaaS platform serving European B2B clients faced an escalating AWS cost problem. Running €6.2M in annual cloud spend across a multi-region architecture, the company had achieved only 12% Reserved Instance coverage through ad-hoc procurement and lacked a coherent Savings Plans strategy. More critically, compute costs were growing at 22% year-over-year, outpacing revenue expansion and threatening margin erosion.

The procurement team had never engaged AWS directly on commercial terms. AWS pricing had been treated as a fixed catalogue rather than a negotiable contract. No Enterprise Discount Program was in place, and marketplace usage was structured in ways that disqualified the company from volume-based pricing benefits. The company had no visibility into whether they were paying negotiated enterprise rates or standard public pricing.

"We assumed AWS pricing was fixed — Redress showed us it was a negotiation, not a catalogue."

The Approach

Redress conducted a comprehensive analysis of 24 months of AWS billing data across all service lines. The assessment identified that 64% of the company's eligible compute spend was running on On-Demand instances with no commitment coverage. Current Reserved Instance coverage was fragmented and misaligned with actual workload patterns. Marketplace charges and third-party software licensing were structured inefficiently, creating "non-qualified" spend that fell outside volume discount eligibility.

Redress built a detailed right-sizing model using historical CloudTrail data and performance metrics to identify which workloads justified Reserved Instance commitment versus which required on-demand flexibility for development and testing environments. The model revealed that 71% of production compute was suitable for three-year commitments, with 29% requiring on-demand access for elasticity.

Rather than recommending a single massive commitment, Redress structured a hybrid approach: Compute Savings Plans for flexible coverage across instance families and regions, alongside targeted Reserved Instances for steady-state workloads with predictable scaling. This dual-layer architecture provided coverage while preserving flexibility for workload changes and supporting 22% growth forecasts without renegotiation triggers.

Redress negotiated a three-year Enterprise Discount Program at 14% across all services, including Aurora database commits, SageMaker training discounts, and restructured marketplace transactions to qualify under EDP terms. This single EDP engagement converted previously non-qualified spend into eligible categories, amplifying the discount across the entire billing footprint.

The Outcome

The engagement delivered measurable commercial outcomes. Reserved Instance and Savings Plans coverage increased from 12% to 71% of eligible spend. The 14% EDP discount applied across the full €6.2M footprint, representing €868,000 in year-one EDP savings alone. Combined with Reserved Instance commitments and Savings Plans rate reductions, the client achieved €1.37M in cost reduction in year one. The three-year projection delivered €4.1M in cumulative savings.

Critically, the new commitment structure provided flexibility to scale. The Compute Savings Plans model allowed the company to grow compute capacity by 22% without renegotiating purchase agreements, eliminating the typical constraint that fixed RI commitments impose on expanding cloud footprints. The structured marketplace alignment freed up budget for innovation investments while protecting margins against continued demand growth.

Beyond the financial outcome, Redress established a procurement governance framework. The client now conducts quarterly AWS bill reviews to ensure sustained alignment with commitments, validates new service adoption against EDP qualification criteria, and maintains a rolling 18-month forecast to anticipate commitment renewal negotiations.

Key Takeaways

  • Dual-layer commitment strategy outperforms single-approach models. Combining Savings Plans flexibility with targeted Reserved Instances for steady-state workloads balances cost optimization with operational resilience. On-demand-only billing leaves money on the table; massive RI commitments lock you into inflexible long-term costs.
  • Enterprise Discount Program engagement unlocks hidden savings. Marketplace restructuring, database commit bundling, and service-specific discounts often deliver 10-15% additional savings beyond standard RI/SP calculations. Many organizations never engage AWS on EDP, treating pricing as a binary choice between standard list rates and narrow RI discounts.
  • Right-sizing must precede commitment strategy. Building commitments on top of oversized instances simply locks overprovisioning into long-term contracts. Redress analysis identified €340K annual waste from unnecessary instance size decisions before committing to any pricing model.
  • Procurement governance prevents cost creep. Quarterly bill reviews and commitment alignment checks prevent the slow erosion of savings through new services, marketplace additions, and scope creep. Savings secured at negotiation are lost at execution without ongoing governance.

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