What SLA terms do you prioritize when negotiating with cloud vendors? What pitfalls or red flags have you learned to avoid?
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There are a few key considerations for me when negotiating with cloud infrastructure providers. Upfront, it’s about the usage-based discount. Most providers have some sort of discount program (AWS has their EDP for example), so maximizing that discount while minimizing our overall commitment is the goal. The larger infrastructure providers have regimented discount programs that aren’t very flexible, but I have found they are willing to negotiate, depending on who they are. With AWS, for example, they are very interested in whether your initiative is in one of their growth targets. You may only be able to negotiate a certain percent off on the EDP initially based on time frame and spend commitment. However, if they find out you are ramping up a significant project, such as a SQL conversion, they may be willing to negotiate more deeply.
When it comes to Azure and Oracle, they are also software vendors and interested in layering in software deals, which can make their deals a bit muddier, but those software deals can have a significant impact. In terms of red flags, watch out mostly for non-infrastructure cloud providers, such as SaaS tools and offerings. In general, make sure they scale the way your business needs to scale. Most are happy to scale up on demand, but you can only scale down at the anniversary of your contract. That is definitely a pitfall to watch out for.
I would add that, in our case, we are primarily looking at Azure as our cloud provider. They have different tiers based on customer size, which is standard across vendors, but the options can change over time. You might sign a three-year deal, and then a few months later, you find a different option you could have chosen. Depending on your account executive, it is possible to renegotiate, especially if you can bundle other software. The key is having a good relationship with your account executive and understanding your options.<br><br>
Not all cloud providers are the same, especially from a SaaS perspective. I have found that privacy and data disaster recovery are areas where you can negotiate, particularly with SaaS providers. For nonprofits, the standard contract often does not fit, but I have been able to negotiate in those areas. On the hyperscaler side, there is typically less room to negotiate, but on the SaaS side, there is some opportunity.