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How It Works
When a company’s annual cloud spend reaches a threshold where a provider considers them a strategic account, the provider may offer pricing below standard published rates. The customer commits to spending a minimum dollar amount over a defined period, and the provider discounts compute, storage, or other services in return. On AWS, this takes the form of the Enterprise Discount Program (EDP). On Azure, the equivalent is a Microsoft Azure Consumption Commitment (MACC). On GCP, customers negotiate private pricing agreements that sit on top of standard Committed Use Discount rates. The exact discount percentage and eligible services vary by deal and are not publicly disclosed.
Why It Matters for Cloud Cost
Negotiated discounts can meaningfully reduce the effective rate a company pays across all cloud usage, not just committed resources. Unlike Reserved Instances or Savings Plans, which apply to specific service types, a negotiated discount often applies more broadly to total spend. Companies that fail to pursue these agreements leave savings on the table as their cloud bill grows. The risk is on the commitment side: if actual spend falls short of the contracted minimum, the customer may owe shortfall fees or lose the discount tier entirely.
Usage AI’s ClearCost provides cost visibility and showback reporting across AWS, GCP, and Azure, giving finance teams the spend data they need to manage against negotiated commitment thresholds.