
Starting June 1, 2025, AWS will implement significant changes to how Reserved Instance (RI) and Savings Plan (SP) discounts can be shared within AWS Organisations. This update will impact Managed Service Providers (MSPs) and companies offering group purchasing services, potentially reshaping cost-saving strategies for businesses reliant on these models.
What’s Changing?
Currently, many businesses benefit from the flexibility of sharing RI/SP discounts across accounts within an AWS Organisation through MSPs or group purchasing arrangements. This approach has been a popular method for optimising cloud costs.
However, under the new policy, these discounts will only apply to usage within a single organisation. Key changes include:
No Sharing Across Multiple Accounts: MSPs and resellers will no longer be able to distribute RI/SP discounts across multiple customers or accounts under their payer organisation.
Reduced Flexibility: Businesses that rely on external providers for centralized cost optimisation will need to adapt, as the practice will no longer align with AWS’s Terms and Conditions.
Implications for Businesses
This policy shift introduces several challenges for companies:
Higher Cloud Costs: Businesses dependent on MSPs for shared discounts may face increased expenses unless they develop alternative optimisation strategies.
Compliance Risks: Continuing to use shared discount models after the policy change could result in non-compliance with AWS’s updated terms.
Operational Adjustments: Companies must re-evaluate and potentially restructure their cloud resource management to align with the new rules.
Why AWS is Making This Change
AWS’s decision aligns with a broader goal of ensuring commitment-based savings are used directly by individual customers rather than distributed through resellers. This move promotes transparency and accountability, addressing concerns about some MSPs retaining a significant portion of the savings as profit without offering genuine value to their customers.
Strategies for Compliance and Optimisation
Businesses have several options to navigate these changes effectively:
In-House Management: Managing cloud commitments internally can provide greater control but may lead to challenges in balancing cost savings with the risk of overcommitting.
Adopt Insured and Flexible Commitments: Providers like North and Usage offer solutions tailored to individual organisations. These options include short-term commitments and cancellation flexibility, enabling businesses to reduce costs while maintaining control over their AWS environment.
Evaluate MSP Relationships: Businesses currently working with MSPs should assess the return on investment and explore alternatives that provide direct and transparent savings.
How to Prepare
To minimise disruption, companies should:
Review Current Arrangements: Audit existing MSP relationships and shared discount models to identify potential compliance issues.
Explore New Solutions: Investigate platforms or services offering tailored, insured commitments that align with AWS’s updated policies.
Adjust Resource Management: Develop internal processes to manage cloud commitments effectively without relying on external discount sharing.
Key Dates and Enforcement
Effective Date: The new policy takes effect in June 2025.
Enforcement: While details on enforcement are not yet clear, MSPs violating the terms could face penalties or removal from AWS’s Solution Provider program. Customers themselves will not be held liable but may experience reduced flexibility and savings.
Looking Ahead
This change presents an opportunity for businesses to take greater control of their cloud environments. By adopting compliant cost optimisation strategies, companies can achieve transparency, enhanced cost management, and long-term savings. Transitioning early and exploring innovative solutions will be key to staying ahead in the evolving cloud landscape.