Ask the Cloud Expert: A Deep Dive Q&A on AWS PPA

Cloud infrastructure forms the backbone of many businesses—whether in the form of SaaS software, internal systems, service delivery, or connectivity—due to its benefits, such as pay-as-you-go pricing and freedom from maintenance overhead. AWS is the pioneer of cloud computing, holding a 30% market share, and is widely used by both government and private organizations.

In this edition of “Ask the Cloud Expert”, we discuss the process of negotiating and securing a Private Pricing Agreement (PPA) with AWS. Suppose your organization is facing rising AWS costs and anticipating growth. In that case, this post will guide you through the key considerations before engaging in a PPA and explain how partnering with CloudKeeper can help you maximize its benefits.

Today’s featured expert: Aman Dixit 

Beyond the standard documentation of AWS PPA, Aman Dixit will walk us through what AWS PPA is by sharing real-world learnings and examples he’s gained over his decade-long career, working with clients and supporting them end-to-end—from contract negotiations to commitment management. Drawing on this rich and diverse experience, he’ll share quality insights and simplify the concept of PPA.

So, let’s get started!

Q1. What exactly is AWS PPA, and what was the purpose behind AWS introducing it?

Before discussing PPA, it is important to note that it was previously known as the AWS Enterprise Discount Program (EDP). A Private Pricing Agreement (PPA) is a cost-saving plan designed for customers with significant AWS spend and usage.

If your organization runs heavily on AWS, a Private Pricing Agreement (PPA) can be a game-changer. Think of it as a personalized contract with AWS, designed for businesses with significant cloud usage. With a PPA, you get exclusive discounts and terms tailored to your consumption patterns—helping you extract more value from every dollar spent.

The standard pay-as-you-go model is flexible, but it often leads to unpredictable costs. A PPA provides stability, but it’s important to understand its scope:

• What a PPA delivers: locked-in discounts and financial benefits based on your usage.
• What it does not deliver: automatic protection against cost spikes.

Unpredictable spending can still occur if strong cloud practices aren’t in place, such as:
Optimizing instances

• Shutting down unused resources
• Controlling runaway services

In short, an AWS PPA guarantees predictable discounts—not predictable bills.

When you combine an AWS PPA with disciplined cloud management—and CloudKeeper’s unique EDP + offerings—you not only secure savings but also gain real financial stability in the cloud.

Question 2. You mentioned that AWS EDP is now known as a Private Pricing Agreement. With the name change, has there been any difference in how EDP used to work compared to PPA?

The way AWS EDP and PPA function is essentially the same.  AWS EDP and PPA differed slightly in scope: Earlier, EDP covered only cross-service discounts, while PPA includes both cross-service and service-specific discounts. Since the AWS EDP label has been deprecated, all new contracts that were previously called “EDP” now operate as PPAs, eliminating the earlier distinction. In short, AWS EDP as a term is now defunct.

Q3. What are the eligibility criteria for a company to qualify for AWS’s EDP/PPA? 

AWS PPAs are not for every company. To determine if your business is eligible, you first need to evaluate your cloud spending patterns and growth trajectory.
According to AWS, two key criteria define eligibility for a Private Pricing Agreement (PPA):

1. Spend and Growth Trajectory

• Businesses that spend $300,000 or more annually on AWS services typically qualify.
• AWS also expects a commitment to growth, usually around 20% year-over-year. Companies anticipating expansion of their cloud operations are more likely to benefit from these agreements.

2. Commitment Period

• While AWS allows a minimum one-year agreement, committing to three or five years often brings greater cost savings.

Additionally, to further strengthen your commitment, software purchases made through AWS Marketplace count toward your overall spending threshold, helping you optimize the agreement.

Q4. Can I pair discounts from RIs and Savings Plans with AWS EDP/PPA?

Yes, you can combine them. AWS billing first applies discounts from Reserved Instances (RIs) and Savings Plans, and then AWS PPA discounts are applied on top of the already discounted usage. This results in additional savings.

However, AWS explicitly prohibits the resale of Reserved Instances purchased under an AWS PPA, as per Section 5.5 of the AWS Service Agreement.

Q5. SaaS providers and ISVs often have higher cloud usage. How does AWS PPA create value specifically for such companies?

SaaS providers and ISVs often accumulate large AWS bills — and that’s natural. Running multi-tenant applications, serving customers 24/7, and scaling rapidly all drive consistently high cloud usage.

That’s where AWS PPA comes into play. Instead of paying standard rates, you secure a custom contract with predictable discounts tailored to your growth. Here’s how it creates value for SaaS and ISV businesses:

1. Lower costs at scale – Unit economics improve as you serve more customers.
2. Financial predictability – Locked-in discounts allow your finance team to forecast margins with confidence.
3. Room to grow – Agreements flex with your growth journey, so you don’t risk over-committing too early.
4. Go-to-market boost – Participation in AWS programs opens doors to co-selling opportunities, marketplace incentives, and joint marketing.
5. Better investor confidence – Predictable spending and stronger margins inspire investor trust, while customers benefit from savings reinvested into your platform.

In short: For SaaS providers and ISVs, AWS PPA isn’t just about cutting costs. It’s about scaling smarter, protecting margins, and growing faster with AWS as your partner.

Q6. What are the features of AWS PPA that make some companies hesitant to opt for it?

AWS PPA, while often seen as the go-to choice for organizations with significant cloud spend, is not always adopted by every eligible company. Despite qualifying, many organizations still opt for alternative cloud cost optimization strategies instead of AWS PPA. The top reasons for hesitation are:

1. Commitment Period
   AWS PPA requires a lock-in with AWS for a significant duration, with a minimum period of 1 year, which reduces flexibility. For fast-changing businesses (startups, SaaS scaling companies), the concern is that they might outgrow AWS or want multi-cloud flexibility.

2. Upfront Negotiation Complexity
   Building an AWS PPA “construct” involves analyzing past usage, forecasting future workloads, and negotiating terms with AWS.

   Hesitation: Smaller teams or companies without cloud finance expertise find this time-consuming and complex.

3. Doesn’t Solve Unoptimized Usage: AWS - PPA guarantees discounts, not cost control.

   Hesitation: Without good governance (shutting unused resources, rightsizing, etc.), companies can still face surprise bills. Without optimizations, clients can end up in an overcommitted state, resulting in business loss.

4. Cashflow & Accounting Considerations

   Some agreements involve prepayments or specific billing structures.

   Hesitation: This can affect cash flow, especially for startups/ISVs balancing growth and funding cycles.

5. Commitment vs. Innovation Uncertainty

   If a company shifts workloads to SaaS tools, adopts serverless, or moves to another cloud, AWS usage might shrink.

   Hesitation: They fear being locked into spending that doesn’t align with future architecture decisions.

In short, companies hesitate because AWS PPA trades flexibility for savings. For some, the long-term commitment feels like a bet on their future growth and AWS dependency — and not everyone is ready to place that bet.

Common alternatives many companies choose instead are AWS Savings Plans and AWS Reserved Instances. While the discounts offered under these options are lower than AWS PPA, the commitment terms are comparatively less rigid and more flexible.

CloudKeeper’s RI management tool further simplifies this process and provides additional discounts on top of RIs, with even shorter commitments, making them an even more flexible choice.

Q7. What should companies keep in mind when negotiating an AWS PPA contract?

When negotiating your PPA contract with AWS, it is crucial to prepare thoroughly by analyzing your infrastructure, forecasting usage, and planning your strategy. Here are the key areas to focus on:

1. Optimize Your Infrastructure
   Before entering contract discussions, ensure your AWS environment is already efficient and optimized for cost savings. Conducting a Well-Architected Review is highly recommended, as it helps identify inefficiencies and maximize your chances of securing meaningful savings during negotiations.
2.  Accurate Predictions and Forecasting
   Accurate forecasting is central to building a strong negotiation case. Tools such as CloudKeeper Lens provide deep insights into your infrastructure, highlight spending patterns, and map them against business growth projections. 
   Understanding your existing environment, predicting expansion needs, and aligning projected growth with AWS expectations will help you negotiate from a position of strength.
3.  Leverage Your AWS Account Managers
   Your AWS Account Managers play an important role as intermediaries in the negotiation process. By maintaining a proactive relationship and engaging with them consistently, you gain early visibility into AWS’s priorities and potential discount opportunities.
   Building this relationship over time makes it easier to secure favorable terms when formal negotiations begin.
4.  Engage with an AWS Partner (like CloudKeeper)
   While AWS offers direct PPAs, working with a partner can deliver additional advantages. AWS Partners like CloudKeeper bring expertise in AWS pricing structures, unlock higher discounts, provide strategic guidance, and offer ongoing support. This ensures you get the best possible deal aligned with your business requirements.
5.  Leverage AWS Marketplace
   Purchases made through the AWS Marketplace count toward your committed spend, which often makes it easier to reach required thresholds. With CloudKeeper’s partnership network, organizations can further optimize this route to strengthen their agreement.
6.  Choose the Right Enterprise Support Model
   When entering a Private Pricing Agreement, AWS Enterprise Support is mandatory. However, Partner-Led Support from CloudKeeper can serve as a financially attractive alternative. Since both support models differ in structure and benefits, CloudKeeper helps evaluate and select the option best suited to your organization’s needs.
7.  Consolidate Accounts for Bigger Discounts
   The biggest driver of AWS PPA benefits is the size of the committed spend. Larger commitments consistently result in deeper discounts. If your organization operates multiple AWS accounts across subsidiaries or business units, consolidating billing under one account can significantly increase your negotiating leverage and unlock higher savings.

Q8. Once an organization has entered into an AWS Private Pricing Agreement (PPA), what best practices should it follow to ensure maximum value throughout the contract period?

To extract maximum value after signing a PPA, there are two key areas businesses need to focus on:

1.  Implement governance and compliance controls
   Once the agreement is in place, it is essential to establish strong governance and compliance measures. AWS PPAs require organizations to closely monitor their spending and ensure it aligns with the agreed terms. CloudKeeper provides tools to track PPA commitments and usage, enabling businesses to stay compliant and avoid potential penalties.
2.  Ongoing optimization and support
   Securing a PPA is not a one-time activity but an ongoing process that requires continuous management. CloudKeeper offers ongoing advisory services that help clients track commitments, adjust usage, and identify new opportunities for cost savings over the course of the agreement.

Q9. What are the advantages of going with a partner-led approach for negotiating the AWS PPA contract? 

Going with a partner-led approach for your AWS PPA contract negotiation is generally considered a safer bet—and recommended. AWS PPA negotiations are highly nuanced, and having a partner with domain expertise and industry know-how can help you secure a better deal, even after accounting for their fees.

Here are the top reasons why going through a partner for AWS PPA contracts is a better choice:

• Informed contract negotiation: Partners are well-versed in the details of PPA and other AWS discount programs. They know how to leverage usage patterns in negotiations and simplify the fine print, ensuring you secure the most favorable terms.
• Knowledge of pricing models: Partners bring an in-depth understanding of AWS pricing models, resource utilization, and optimization best practices. Their recommendations help refine cloud efficiency and maximize the benefits of AWS PPA discounts.
• Requirement analysis: An AWS PPA partner can analyze workloads, infrastructure needs, and anticipated growth. They provide guidance on rightsizing, reserved instance utilization, and resource allocation to ensure your commitments align with business needs—delivering maximum savings without wastage.
• Discounts on Enterprise Support: Partner-led support often comes at a lower cost compared to AWS Enterprise Support bundled with PPA. As your requirements grow, this ensures support costs don’t eat into your AWS PPA discounts.
• Benchmarking and negotiation intelligence: A good partner has visibility into how similar companies structure their AWS PPA contracts. This benchmarking knowledge gives you an edge during negotiations, helping you secure stronger discounts and terms that you might not have been aware of otherwise.

Q10. How does CloudKeeper step in for AWS PPA, and what aspects of the program does it manage?

CloudKeeper acts as an end-to-end partner in helping our clients get the best possible deal on their AWS PPA contracts. While it is possible to negotiate directly with AWS, many organizations struggle to access these valuable agreements on their own due to intricate pricing structures and complex requirements.

With our unique CloudKeeper EDP+ offering, our expert team takes the guesswork out of determining whether an AWS PPA is the right fit for your organization. By evaluating your current and projected AWS usage, we can assess whether an AWS PPA would genuinely benefit your business. This ensures that any agreement aligns with your spending patterns and budget goals, allowing you to unlock substantial savings.

Here’s how CloudKeeper supports you throughout the process:

• Eligibility assessment – We evaluate your AWS usage and growth projections to determine whether an AWS PPA is the right strategy for your business.
• Commitment planning – Once eligibility is confirmed, we partner with you to set commitment levels that maximize discounts without the risk of overspending.
• Usage trend analysis – Our experts analyze AWS usage patterns to help you lock in realistic commitments while securing the best possible rates.
• Negotiation with AWS – Leveraging our strong relationship with AWS, we negotiate favorable AWS PPA terms on your behalf, ensuring agreements that balance cost efficiency with your long-term strategic objectives.

With CloudKeeper managing the complexity of AWS PPA negotiations, you can stay focused on leveraging AWS for innovation and growth—confident that you are receiving the best possible value from your agreement.

Our deep knowledge of AWS pricing models, instance management, and best practices enables us to set up an optimized infrastructure even before negotiations begin—maximizing cost efficiency and savings.

CloudKeeper covers these and many more aspects to strengthen your FinOps strategy, maximize ROI on your EDP investment, and unlock the full value of your AWS cloud spend.

Key Takeaways

AWS PPA (Previously known as AWS EDP)  is a special, customized discounted pricing contract that AWS offers to clients billing more than USD 300k per year. These contracts lock in spend commitments for a minimum period of 1 year. However, there are caveats—such as no more than 25% of the committed spend can come from Marketplace purchases, and discounts received through AWS PPA are excluded from the committed amount.

No two AWS PPA contracts are the same, as the terms heavily depend on the size of your bill and your ability to negotiate with AWS. For this reason, a partner-led negotiation is generally recommended.

CloudKeeper EDP+ goes beyond the standard program by offering lower annual commitments, deeper AWS service discounts, and reduced AWS Support pricing through partner-led support. Customers also get exclusive access to CloudKeeper Lens and CloudKeeper Tuner for advanced insights and optimization — all at no additional cost.

CloudKeeper delivers lower commitments and better discounts compared to AWS PPA.

CloudKeeper EDP+ is our take on partner-led AWS PPA (previously known as EDP), where we act as your end-to-end partner—right from helping you negotiate the best deal possible to ensuring you maximize value throughout the contract. With CloudKeeper, you get the benefits of AWS PPA at a lower commitment period and better discounts.

In addition to AWS PPA, you also receive expert enterprise support at a lower cost, along with value-added services such as CloudKeeper Lens, which helps track your instance spending and maximize the benefits of PPA end-to-end. Beyond that, CloudKeeper provides cloud FinOps consulting and support services, AWS Well-Architected Reviews, and helps establish FinOps KPIs and unit economics.

We’re your one-stop solution for an optimized and effective cloud setup. Let’s get in touch today!