Reading between the lines, I think AWS has a huge upstream bandwidth bottleneck that it can't get around easily, while spread out small dedi providers have everything but this problem.
(Speculation based on how AWS prices things: Build big, charge for everything, charge what it actually costs with a small markup, and put every high-margin provider out of business)
Keep in mind that if you're sufficiently large, you can negotiate better rates on dedi as well. Because of the massive competition in that market, you don't have to be that large to do it either.
Transparent pricing is one of the greatest selling points of the "cloud". Nobody in the startup scene wants to deal with traditional enterprisey "call us for a quote" pricing unless they really have no other choice.
So if what you're saying is right, that would be just another reason for most small companies to avoid Amazon. If you're wrong, other comments in this thread have also given a good reason for small companies to avoid Amazon.
Huh? It's totally transparent AND you can get a better deal if you pick up the phone and negotiate. They'll ask you to sign a commitment and (unenforceable) exclusivity clause.
Some people even take that "confidential" offer letter for volume pricing and shop it around to other cloud providers. Shocker!
I have trouble believing that this is actually true. I say this as a customer who spends a half million a month with AWS (and that spending is rapidly increasing).
There are some growth incentives (eg, prepay $3MM for next year, get 6% off all services), and there are some tiered savings (e.g. 5% off on more than $500k of RIs in a single region), but I've never seen a plausible, verifiable incident of people successfully negotiating AWS rates downward.
"You agree that the existence and terms of this Addendum and the Private Pricing Program are not publicly known and constitute AWS Confidential Information under the Agreement."
Maybe they're milking your investors. Maybe you've built some absurd contraption that they know you won't be able to move elsewhere. Or maybe you need to hire a better negotiator.
That text matches what we got from a growth commitment that included a pretty modest discount.
Given that we couldn't get it; and that nobody from our company's entire VC network could get it; and that nobody on my CTO email list could get it... I'm going to continue thinking that the anonymous HN commenter is talking out of his ass.
But if you can prove me wrong, I'd be thrilled to be wrong.
"the anonymous HN commenter is talking out of his ass"
Anonymous commenter versus 11-hour old throwaway account... who wins?
Looking at a few words in your rebuttal above and combining it with the tone you're using, I can come up with quite a few reasons you might not have gotten the discount you sought.
I'd suggest you put down the "CTO email list" and let an actual business person handle this for you. Handshakes and existing relationships still matter in this world. Good luck!
If you're going to complain about tone; don't be a rude son of a bitch in the first place.
That said, no point in arguing further with a liar and/or troll. You're not getting 10x discounts on your AWS bill. You're not fooling me or anybody else.
The median AWS based SaaS company spends around 6% of their revenue on AWS. (this compares to a median of 7% for those who choose to manage their own servers).
As such, $500k/mo isn't a terribly elite club. Essentially every SaaS company that does more than $10MM/mo of revenue is spending as much or more than we are.
What do you consider significant? If you are doing over 10TB then you'll be paying lower and even lower the higher you go. This doesn't help the smaller players doing under 10TB. Do you know of people under 10TB that have negotiated better rates?
I don't consider $900/month in bandwidth significant. And I'm sure Amazon account managers don't either -- but it can't hurt to ask, especially if you've got a growth plan that makes sense.
At that point you're rapidly approaching the scale where cloud-style on-demand provisioning isn't really helping you (unless you prefer AWS's tooling to any "private cloud", which is legit), and you might as well put a bunch of dedicated servers in colo, right?
That is to say, the reason you can negotiate a discount once you get well past that point (or if you intend to grow well past that point) is because staying on AWS makes increasingly less sense for you.
Depends on the situation - a bunch of dedicated servers means a sizable shift from "operating expenses" like AWS fees to "capital expenses" for hardware. It also means shifting expenses from monthly as-you-go to mostly upfront.
Right now I use 3 Softlayer virtual servers to serve up 15TB of static files a month. It costs me a whopping $168 a month. The same 15TB on AWS would cost $1325 a month. I consider saving $1157 'significant'.
Softlayer no longer includes 5TB on every virtual server and their bandwidth is equally outrageous so I'm still evaluating a plan for new servers.
