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What is AWS PPA?
AWS Private Pricing Agreement (PPA) is a custom discount program for high-spend AWS customers who commit to a multi-year contract in exchange for lower pricing. Each customer privately negotiates these agreements based on their total AWS spend, usage patterns, and contract length.
PPAs offer significant savings but require a firm spending commitment, typically starting at $500K–$1M annually for 1-5 years. Discounts can apply broadly across AWS services or be service-specific, and some agreements include AWS credits, migration incentives, or allowances for AWS Marketplace purchases.
For businesses with predictable and growing AWS usage, a PPA can provide long-term cost savings—but it requires careful planning to ensure the commitments align with actual needs.
What are the requirements for PPA?
| Minimum spend | Typically $500,000-$1,000,000 or more |
| Multi-year contract | PPAs generally last 1, 3, or 5 years. AWS may charge penalties or reduce future discounts if you fail to meet the agreed spend. |
| Spending increase year over year | Spending commitments cannot decrease over time. If you commit to $2M in 2025, you cannot lower your commitment to $1.75M in 2026—AWS requires equal or increasing commitments. |
| Enterprise Support | Enrollment in AWS Enterprise Support is usually required, adding to overall investment but providing enhanced support services. |
| Architecture Requirements | For certain benefits, products must meet specific AWS hosting patterns, such as having both the application and control planes running on AWS. |
| Submission deadlines | PPAs must be finalized by the 20th of the prior month to take effect on the 1st of the next month. |
Key Considerations
- Discounts don’t count toward commitments: If you commit to $2M and receive $200K in discounts, you must still spend $2M in actual usage.
- AWS Marketplace spend can offset commitments: A portion (subject to negotiation, typically 25%) of your PPA commitment can be met through third-party purchases in AWS Marketplace.
- Risk mitigation: Some third-party services offer insuranceagainst PPA shortfall penalties to reduce financial risk associated with committing to too much cloud spend.
Am I ready to join PPA?
Is my annual AWS spend substantial enough?
Can I predict my annual AWS cloud spend with a high degree of confidence?
Reliable predictions of your AWS consumption are crucial to meeting the committed spend in a PPA. Yet AWS usage can be complex, with usage patterns and services varying across users, teams, and departments. To take full advantage of PPA, it’s crucial for engineering and finance to work together to accurately forecast your AWS spend to avoid overcommitting.
Some best practices include ensuring your spend predictions are realistic and building in a certain amount of buffer in the amount that you commit to.
Do I anticipate sustained or increasing AWS usage?
Am I cost-optimized?
AWS services covered by PPA
- Compute & Containers:EC2, ECS, EKS, Lambda, Fargate
- Storage & Data Services:S3, EBS, EFS, Glacier, FSx
- Databases & Analytics:RDS, DynamoDB, Redshift, ElastiCache, EMR, Athena, Kinesis
- Networking & Content Delivery:VPC, Direct Connect, Route 53, CloudFront, Transit Gateway
- Security & Identity:IAM, GuardDuty, WAF, Shield, AWS Security Hub
- Machine Learning & AI:SageMaker, Comprehend, Rekognition, Bedrock, Textract
- Management & Automation:CloudWatch, CloudFormation, Systems Manager, AWS Config, AWS Organizations
- Business Applications (Variable Coverage):Chime, WorkSpaces, AppStream, Connect
These are just examples; there are many other services that can be covered by an AWS PPA.
As mentioned earlier in the blog, a portion of the annual AWS PPA commitment can be offset by purchases from AWS Marketplace, allowing for some flexibility in service coverage.
AWS PPA vs AWS EDP
AWS Private Pricing Agreement (PPA) and AWS Enterprise Discount Program (EDP) are functionally the same—AWS has simply rebranded EDP under the PPA name.
Historically, EDP referred to cross-service discounts, while PPA covered service-specific agreements. Today, AWS uses “PPA” for all private pricing contracts, regardless of scope. If your old contract was labeled EDP and your new one says PPA, nothing has changed except the name.
PPA vs. EDP
| Feature | AWS PPA (Private Pricing Agreement) | AWS EDP (Enterprise Discount Program) |
| Scope | Includes both cross-service and service-specific discounts | Historically focused on cross-service discounts |
| Flexibility | Allows customized, service-specific discounts | Originally a flat discount across all AWS services |
| Status | Actively used, most contracts today are labeled as PPA | Mostly depreciated in favor of PPA — older and smaller contracts may still reference EDP |
Can You Combine AWS PPA with an Existing EDP?
if you’re a large organization already on an EDP with a broad discount (e.g., 20% across all services) and a long duration before the EDP ends but want to push for deeper savings, you can potentially negotiate a new PPA on your top-spending or fastest-growing services. This allows you to secure higher service-specific discounts for the AWS services that make up the bulk of your spend while maintaining your existing EDP discount across all other AWS services — resulting in a net effective discount that is higher than your current EDP rate.
For example, if your existing EDP provides a 20% discount across all AWS services, but you negotiate a new PPA with a 30% discount on EC2 and S3 (your highest-cost services), your overall AWS discount improves—without disrupting your current EDP agreement. However, note that discounts do not stack.
How to negotiate AWS PPA: 7 practical tips
AWS PPA discounts aren’t standardized—your negotiation strategy directly impacts your savings and contract flexibility. Here’s how to secure the best deal:
#1: Assess and forecast your AWS usage. Take a look at your current and historical AWS spending patterns across key services like EC2, S3, and RDS to accurately predict your future compute and usage needs to avoid overcommitting. Identify mission-critical services likely to grow in demand, as these should be prioritized in your negotiation.
#2: Leverage your spending power. Use your total AWS spend and projected growth to negotiate better terms. If your organization operates multiple subsidiaries or departments, consider consolidating usage to meet higher spending thresholds and unlock bigger discounts. Clearly highlight your projected AWS spend and long-term commitment as bargaining tools.
#3: Negotiate for discounts AND flexibility. Push for the highest possible discounts, including service-specific discounts for the AWS services your team uses most. However, there are also additional incentives to consider — for example, flexible payment terms, AWS credits for migrations, custom contract clauses that allow spend reallocation across services, and other advantages beyond percentage-based discounts.
#4: Set expectations for negotiation rounds. Be prepared for multiple rounds of negotiations, which can help you secure improvements from standard discounts.
#5: Time it right. It might be advantageous to negotiate at the end of a sales quarter or fiscal year when sales teams are under pressure to close deals.
#6: Get multiple proposals. Even if you’re committed to AWS, signaling interest in competitors can strengthen your position. AWS might be more likely to offer aggressive discounts if they know you’re evaluating alternatives like Google Cloud or Azure.
#7: nOps can help with AWS PPA
Before you can even negotiate an AWS PPA or EDP, you need to know exactly how much you’re spending today—not just at a high level, but across thousands of services and accounts. AWS billing is complex, making it difficult and time consuming to get a clear picture of your actual spend.
nOps Business Contexts makes it easy to get the visibility you need:
- Cost Dashboards & Reports– Instantly see how much you’re spending today to determine if you qualify for PPA and which services to prioritize in negotiations.
- Budgeting & Forecasting– Analyze past spending, predict future spending, and ensure you’re on track to meet PPA commitments.
- Scenario Modeling– Compare different terms and commitment levels within the nOps budgeting tool to identify the best PPA negotiation strategy.
- Cost Optimization– Identify waste and cost optimize BEFORE committing to a spending level. nOps helps you get comprehensive savings at the node, container and pricing level with EKS optimization, commitment management, and resource optimization.
nOps was recently ranked #1 in G2’s cloud cost management category, and we optimize $2 billion in cloud spend for our startup and enterprise customers.
Join our customers using nOps to understand your cloud costs and leverage automation with complete confidence by booking a demo today!
