Most companies with $1 million+ annual AWS spend leave 20% or more on the table when managing enterprise agreements – not because they lack ambition, but because commitment decisions happen in a fog of incomplete data, cross-team politics, and evolving usage patterns.
The AWS Enterprise Discount Program offers tiered discounts in exchange for multi-year spending commitments, typically ranging from baseline savings of 6–9% for smaller commitments up to higher discount brackets for organizations pledging $50 million or more annually. These agreements come with strict growth requirements, mandatory Enterprise Support fees, and the risk of locking in wasteful spending if you commit before optimizing your infrastructure. This guide breaks down exactly how EDP works, what it takes to qualify, how to negotiate better terms, and how to track utilization so your commitment drives real savings instead of budget overruns.
What is the AWS Enterprise Discount Program?
The AWS Enterprise Discount Program is a contractual agreement between AWS and large customers that commits to a specified level of AWS spend over a multi-year term – typically one to five years – in return for percentage discounts applied across most AWS services and regions. AWS EDP agreements (sometimes called Private Pricing Agreements or PPAs) function as enterprise volume agreements: the more you commit and the longer the term, the better your discount rate. Previously, AWS maintained separate EDP and PPA structures, but these are now functionally equivalent for customers.
Unlike Reserved Instances or Savings Plans that target specific resource types, EDP discounts apply broadly to most AWS services including compute, storage, databases, networking, and even AWS Marketplace purchases. Up to 25% of EDP spend can include AWS Marketplace purchases, enabling additional savings within your committed budget. Once your EDP is active, discounts apply automatically to your monthly invoices for eligible services – you don’t need to take additional action, and the percentage reduction appears on your bill.
EDP eligibility: Do you qualify?
AWS EDP typically requires organizations to commit to at least $1 million in annual AWS spending to qualify, though some sources cite thresholds as low as $500,000. In practice, most enterprises need $1M+ annual AWS usage to make the program worthwhile. The program targets large enterprises with predictable or growing cloud usage.
AWS evaluates your eligibility based on several factors. Historical spend trajectory matters: AWS reviews your trailing spend – often the last 6–12 months – to establish a baseline and assess growth patterns. If your organization has been spending $800,000 annually but projects crossing $1 million with new initiatives, you may still qualify. Growth commitment is non-negotiable: customers must commit to 20% growth from their trailing 6-month spend in the first contract year. If you spent $3 million in 2024, AWS expects your 2025 commitment to be at least $3 million – you cannot reduce annual spend below the prior year’s pledge.
Strategic importance also influences eligibility. Companies in emerging technologies, high-visibility use cases, or industries where AWS is building market share may have additional leverage during negotiations. Organizations with highly variable or unpredictable workloads may struggle to commit to specific EDP spending levels. If your usage fluctuates significantly quarter-to-quarter or you’re in a high-growth but uncertain phase, the commitment risk may outweigh potential discount benefits.
How AWS EDP works: Commit structure and discount tiers
EDP agreements follow a straightforward but rigid structure. Contract terms typically range from 1 to 5 years, with longer commitments qualifying for higher discount tiers. A 3-year agreement generally secures better rates than a 1-year term at the same spend level. You pledge to spend a minimum dollar amount annually across your AWS usage, and AWS requires participants to commit to not reducing annual spend below the prior year’s pledge – for example, a $3M 2024 commitment requires at least $3M in 2025.
One critical detail often overlooked: EDP discounts themselves don’t count toward your annual commitment. If you spend $2 million and receive $200,000 in EDP discounts, only $1.8 million counts toward retiring your commitment. This means you need to plan for higher gross usage than your net commitment to stay compliant.
If you exceed your committed spend, the overage is charged at your negotiated EDP rate but doesn’t count toward future commitment retirement. If you underspend, you’re still obligated to pay the full committed amount – there’s no refund or rollover. AWS requires EDP participants to enroll in AWS Enterprise Support, which adds incremental fees beyond standard support plans. For accounts with over $1 million in monthly spend, Enterprise Support costs 3% of monthly usage, with a minimum of $15,000 per month for smaller accounts. This hidden cost can offset a portion of your EDP savings if not factored into negotiations.
EDP discount tiers: What savings can you expect?
EDP discount tiers scale from baseline 6–9% for $1M+ commitments up to the highest brackets for $50M+ annual commitments. The exact percentage you secure depends on several factors working in combination. Larger commitments unlock higher discount percentages – an organization committing $5 million annually will receive better rates than one committing $1.5 million. Longer terms (3–5 years) typically secure better discounts than 1-year agreements at the same spend level.
Growth trajectory influences rates as well. If your forecasted usage shows significant year-over-year growth, AWS may offer more favorable terms to lock in that expansion. Your total spend, growth potential, and strategic importance to AWS all influence the final discount tier you negotiate. Industry reports suggest typical EDP discounts range from low single digits for smaller commitments to meaningful double-digit percentages for large, multi-year agreements, though AWS keeps specific tier breakpoints confidential and rates vary deal-by-deal.
Negotiation levers: How to secure better EDP terms
Negotiating an EDP isn’t about accepting AWS’s first offer. Organizations that prepare thoroughly and understand their leverage secure better outcomes. Come to the table with granular projections of expected AWS usage, including specific initiatives, product launches, or market expansions. Companies should document detailed projections of expected AWS usage including specific initiatives, product launches, or market expansions – AWS values visibility into your growth plans and may offer better terms if you can demonstrate predictable, substantial growth backed by concrete business drivers.
If your architecture supports multi-cloud or you’re evaluating alternative providers, mention it. AWS competes aggressively to retain large customers, and credible alternatives can improve your negotiating position. Organizations building high-visibility products, working in emerging technologies, or operating in industries where AWS is expanding market share often have additional leverage. Position your workload as a reference use case or growth driver for AWS’s industry strategy.
Since Enterprise Support is mandatory but priced independently, negotiate its cost alongside your EDP discount. Some organizations secure discounted or capped support fees as part of the overall agreement. Organizations should optimize existing AWS resources before committing to EDP to avoid locking in wasteful spending patterns. If you’ve already reduced costs through rightsizing, Graviton migration, or other optimizations, demonstrate that track record – it shows AWS you’re a sophisticated buyer managing costs responsibly, which can strengthen your negotiating position.
EDP vs. Reserved Instances and Savings Plans: How they stack
AWS EDP complements rather than replaces Savings Plans and Reserved Instances. Many enterprises use EDP plus Savings Plans to stack predictable savings with flexibility. EDP provides a baseline percentage discount across most services and regions for your committed spend level, with discounts applied automatically to your invoice. Savings Plans and Reserved Instances offer deeper discounts – up to 72% off On-Demand for compute – for specific resource commitments like instance families, regions, or compute usage measured in dollars per hour.
You can combine these approaches effectively. For example, an organization with a $10 million EDP might also purchase Savings Plans covering 60–70% of their steady-state compute workload. The EDP discount applies to your total invoice, while Savings Plans and RIs provide incremental savings on committed resources. Organizations should track RI and Savings Plan utilization (aim for 80% or higher) and coverage (target 70–80% of eligible usage), and combine these instruments with EDP to maximize total savings. Effective Savings Rate – the blended discount across all pricing models – of 50–70% or more is achievable with automated optimization platforms.
Note one important policy change: effective June 1, 2025, AWS restricts RIs and Savings Plans to single customer usage, blocking resellers and MSPs from pooling commitments. This change makes careful commitment management even more critical for direct enterprise customers.
Managing EDP risk: Avoiding commitment traps
EDP agreements create meaningful commitment risk if not managed carefully. If your usage declines or you migrate significant workloads off AWS, you’re still obligated to pay the full committed amount. One economic downturn, product pivot, or architecture change can turn a discount into dead weight. Committing before optimizing your infrastructure locks in wasteful spending patterns at scale. If 40% of your EC2 instances are oversized or you’re paying for thousands of dollars in orphaned EBS volumes, your EDP commitment bakes that waste into a multi-year agreement.
Cloud pricing and technology evolve rapidly. A 3-year EDP commitment made today might look expensive in 18 months if AWS introduces more aggressive Savings Plans, new instance families with better price-performance, or competitive pressure forces broader price cuts. Several strategies can mitigate these risks.
Run a comprehensive cost audit to eliminate waste before signing an EDP. One European SaaS customer spending roughly $250K per month on AWS achieved an immediate 21% discount on their total AWS bill with no code changes by blending Savings Plans and RIs and selling unneeded commitments – before finalizing their EDP terms. Commit to a level you’re confident you’ll exceed, not a stretch target. It’s better to over-consume and pay EDP rates on the overage than undershoot and waste budget on unused commitment.
Negotiate shorter initial terms (1–2 years) or graduated commitments that ramp over time as your usage stabilizes. Set up real-time monitoring of your EDP utilization against your commitment using AWS Cost and Usage Reports, Cost Explorer, and automated dashboards to provide early warning if usage trends diverge from projections.
Tracking and optimizing EDP utilization with Hykell
Managing an EDP agreement requires continuous visibility into your spend trajectory, utilization rates, and optimization opportunities. Most organizations struggle with this operationally – commitment management becomes a technical and political minefield where engineering, FinOps, and finance teams debate decisions while usage patterns evolve and ideal windows to act are missed.
Hykell provides automated EDP utilization tracking and optimization. Real-time EDP tracking monitors your committed spend versus actual usage across all AWS accounts with daily updates, giving you early visibility into whether you’re on track to meet your commitment or at risk of underspending. Automated commitment optimization manages over $10 million in monthly AWS spend across EMEA customers using a blended strategy combining RIs, Savings Plans, and secondary market transactions to maximize discount coverage while maintaining flexibility – ensuring your EDP commitment works in tandem with other savings instruments.
Before signing or renewing an EDP, Hykell runs comprehensive cost audits to identify waste and optimization opportunities, ensuring you don’t lock in inefficient spending patterns. These audits typically uncover 25–40% in potential savings. Utilization alerting and forecasting provides proactive alerts when your usage trajectory suggests you’ll undershoot or significantly exceed your EDP commitment, allowing you to adjust architecture decisions, workload placement, or negotiate amendments before issues compound.
Hykell’s observability platform provides role-based dashboards showing EDP utilization alongside other key cost metrics – CFOs see high-level KPIs, FinOps teams track discount coverage and commitment utilization, and DevOps teams monitor resource-level spend – all from a unified view. Hykell’s optimizations require no code changes or active DevOps work. Connect your AWS account via a secure, read-only IAM role and Hykell handles continuous monitoring, discount application, and commitment management on autopilot.
Organizations using Hykell alongside EDP agreements report 20–30% cost savings without touching code, hours saved per month on commitment planning and reporting, less friction between finance and tech teams, and more confidence in budget forecasting.
EDP and broader AWS cost optimization strategy
EDP is one component of a comprehensive AWS cost optimization strategy. The best outcomes come from combining EDP with continuous optimization across multiple dimensions. When combined with right-sizing and other optimization techniques, total savings can reach 50–55%. One enterprise customer reduced their monthly compute bill from $50,000 to $27,500 while improving application performance by 15% through systematic rightsizing and instance family selection.
GOV.UK achieved 15% per-instance savings migrating from m6i (x86) to m7g (Graviton), with total savings reaching 55% when combined with right-sizing and Savings Plans. Graviton instances deliver 40–60% better price-performance than comparable x86 instances, and these savings stack with EDP discounts. EBS optimization through volume rightsizing, migration from gp2 to gp3, and elimination of orphaned volumes can reduce storage costs by 40% or more. Many organizations discover thousands of dollars in monthly waste from unattached volumes and over-provisioned IOPS that inflate their EDP spend unnecessarily.
EKS and container workloads often hide inefficiencies at the pod and namespace level. Optimizing container resource requests, implementing cluster autoscaling, and using Spot Instances for non-critical workloads can dramatically reduce compute costs within your EDP commitment. Layer Savings Plans and Reserved Instances on top of your EDP to capture incremental savings. A well-managed commitment portfolio can achieve Effective Savings Rates of 50–70% or more.
Manual cost management doesn’t scale. Automated cost optimization platforms can reduce AWS expenses by up to 40% by continuously identifying waste, adjusting commitments, and implementing best practices without ongoing engineering effort. Hykell’s platform combines all these optimization vectors with EDP tracking, providing a unified approach to AWS cost management that reduces cloud costs by up to 40% on autopilot. You get the benefits of EDP discounts plus systematic, automated optimization across compute, storage, networking, and commitment instruments – without the manual effort or cross-team friction that typically derails cost initiatives.
Getting started: Should you pursue an EDP?
AWS EDP makes sense for organizations meeting specific criteria. You should be spending $1M+ annually on AWS with confidence that usage will remain stable or grow over the commitment period. Predictable workloads or clear growth plans justify multi-year spending commitments. Mature cost management practices should be in place – or a willingness to invest in optimization before committing – to avoid locking in waste. Finally, you need appetite for negotiation and the resources (internal or external) to manage ongoing commitment tracking and optimization.
If you’re not ready for EDP, focus on foundational cost optimization: rightsizing, storage cleanup, tagging and allocation, and tactical use of Savings Plans and Reserved Instances. These moves build the discipline and visibility you need to eventually negotiate a strong EDP agreement. If you are ready, start by running a comprehensive cost audit to baseline your current spend and identify optimization opportunities. Then document your growth projections, assess your negotiation leverage, and engage AWS with clear data and realistic targets.
Hykell offers a free commitment audit of your actual usage. Bring us your historical spend, projected growth, and current discount coverage – we’ll reconcile your projections with reality, identify immediate savings opportunities, and help you determine whether an EDP makes financial sense for your organization. Worst case: you get a free sanity check. Best case: you uncover immediate cost reduction and negotiate a stronger EDP backed by optimized infrastructure.
The opportunity cost of poor commitment management is real. Teams spend days or weeks debating EDP terms while usage patterns shift, optimization windows close, and savings slip away. Let automation handle the grunt work so you can focus on building products instead of second-guessing your cloud bill.