Enterprise Discount Plans - multiyear commitment to lock in a savings percentage

Organisations can present a 5 year plan forecast of intent, based upon total yearly cloud opex spend projections ( this being the opex billable intended spend – so usually after reservations have been applied ). Against this the cloud provider develops a commit contract and provides a discount benefit alignment for this long-term commitment. This is called the Enterprise Discount Plan – EDP.

In my experience cloud providers facilitate an EDP discount in the range of 5% to 15% - based upon the monthly consumption total, the discount is then a percentage of that total spend – thus monthly, the actual discount amount is variable month on month, aligning to the actual consumption demand of each month.

Now this percentage discount sounds very low – when compared to reservation achievable discounts of 40% on average and more in the case of AWS Savings Plans. BUT – this discount is applied to “the total monthly bill” – this is therefore a way of discounting consumption of storage, data throughput, logging, everything – much more than just compute and database instances.