Why Are You Still Paying Retail Prices?!

Links:

• Unconventional Guide to AWS Cost Management:https://www.duckbillgroup.com/resources/unconventional-guide-to-aws-cost-management/

Transcript

Corey: This episode is sponsored in part by LaunchDarkly. Take a look at what it takes to get your code into production. I’m going to just guess that it’s awful because it’s always awful. No one loves their deployment process. What if launching new features didn’t require you to do a full-on code and possibly infrastructure deploy? What if you could test on a small subset of users and then roll it back immediately if results aren’t what you expect? LaunchDarkly does exactly this. To learn more, visit launchdarkly.com and tell them Corey sent you, and watch for the wince.

Pete: Hello, and welcome to the AWS Morning Brief. I am Pete Cheslock.

Jesse: I’m Jesse DeRose.

Pete: Fridays From the Field. Triple F.

Jesse: Wooo.

Pete: It’s going to be a thing. We’re working on it. And you can follow along this Unconventional Guide by going to the duckbillgroup.com. Website, you can download this entire Unconventional Guide as a handy PDF. We’ll include the link in our [show notes 00:00:33]. It’s a really long link that I’m not going to read out here.

Jesse: Is it wrong that I want Rebecca Black’s, “Friday” to be our opening intro music now?

Pete: Oh, yeah. That would be, actually, pretty good. I feel like the cost of licensing that might be a little higher than we want to bear. But I don’t know, maybe there’s some sort of fair use thing that we could do with it.

Jesse: I like it. We’ll think about it.

Pete: Well, you know what? We can all just sing it in our heads. And that’s a good way to get it—

Jesse: [laugh].

Pete: —very cost-effective way.

Jesse: We know that you’re groaning as much as we’re groaning, and that’s what’s important.

Pete: That is very true. So, today, we are talking about why are you still paying retail prices for your Amazon usage? And maybe you’re sitting there going, “Well, what else would I pay?” Well, you’d pay less than that, right?

Jesse: Yeah. Last week, we talked about reservations and savings plans, reserved instances. And that’s really important, but today we’re talking about something a little bit different than that. Reservations are still important and still, potentially, part of this conversation, but it’s possible to not pay retail prices. You have to think about it in the same way that you’re thinking about reservations: you have to be willing to make investments into your cloud spend, into your cloud usage.

Pete: So, we mentioned this in a previous episode, that no matter how much your spend is, from a couple of dollars a month all the way up to hundreds of millions of dollars a month, you have an account manager with AWS. You may have never met them, but there is someone that is specifically assigned to you. And the reason for this is that every big-spending client out there starts as a small-spending client, if you’re a startup, you might be spending $10,000 a month. That can be a huge amount of money for your business, but Amazon knows that next year, you’re probably going to spend more than that. And so everyone gets an account manager, and that account management team is there to help you improve your bill. 

And by that I mean, help you spend less when it’s possible. So, the way they do this is by helping investing in this relationship. They want you to save money. And I’m not making a funny here, that may sound like a very strange topic. But Amazon doesn’t want you to spend your money wastefully. That makes for angry customers. Right, Jesse?

Jesse: Yeah, this is ultimately something that I see come up again and again. AWS’s account management team really wants to help you; their job is literally to help you. This relationship is super, super important, and can manifest in a number of different ways: it can manifest in your account manager trying to set you up with a solutions architect or technical account manager to use more AWS services; it can be talking about some of the discounts that we’re going to talk about today; it could be a whole slew of things, maybe credits to move or migrate from your data center into AWS. That’s when we’ve seen a couple times with a couple different clients of ours.

Pete: Yes, specifically, we’re talking about one of the most well-known, I guess, of all of the discount programs inside of Amazon called the Enterprise Discount Program. This is often referred to as an EDP. And you might have an Enterprise Discount Program—this is actually separate from something called an Enterprise Agreement which is just, I believe, some shared legal agreements of how you will operate on the platform. This is actually broader than that. This is both Amazon and your business committing to certain terms—so legal is going to get involved; it’s going to be some legal requirements that are needed—but at the end of the day, this is how you can get a discount on your spend, just a straight, broad, cross-service discount that applies to all of your spend—for the most part. I say ‘all’ but for a majority of your spend within Amazon.

Jesse: So, now you’re thinking to yourself, “Fantastic. How do I sign up, sign up? Shut up and take my money.” So, there’s levels to this. We’ve usually seen clients or AWS customers, whose spend exceeds $1 million per year. That’s usually the sweet spot where your account manager will step in and say, “Hey. Hello. Hi, how are you?”

Pete: Yeah. That’s where you get the introduction because at that spend, yeah, okay, you’re at—what—$100,000 a month, at least? Six figures a month, that’s real spend. That’s real spend that’s probably not going to go away anytime soon. And it’s spend that probably is going to increase in the coming years.

Jesse: And even if you’re not at $1 million per year, you can still start that conversation with your account manager today. They can still tell you what are the levers that you have in order to become part of this EDP program? What are the levers that you have to start getting discounts on your usage today?

Pete: So, something we see a lot of, we actually help a lot of our clients, hold their hand through this negotiation process, and help our clients negotiate on their behalf to improve their discounts. And a good number of our clients actually, will preemptively negotiate these contracts in advance of their spend growing on Amazon, basically making these multi-year commitments because maybe they’ve just closed a deal with a large customer, they’re expecting some future growth and they want to make sure that they can get the biggest discount possible. And that’s what an EDP can do is, basically you’re saying, “I commit to spending a certain amount of money per year, and in exchange, I will get a discount.” Now, there’s a lot of nuances here, but the key thing is that when you make that commitment—let...