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> (on which they already get a huge discount) just wondering, how huge (as a percentage) that discount is?
by auvi 8y ago
> (on which they already get a huge discount)
just wondering, how huge (as a percentage) that discount is?
- ryanianian 8y agoThey'll play a few games with contracts to spread the costs around (e.g. giving n% discounts for m years of reserved capacity). You probably won't get much just by saying "I can just go to GCP" and asking for the world. The more you spend, the more distinct services you buy, and the longer you want to commit the steeper the discount. I've seen up to 10% but I'm sure they do more for bigger customers.
- falcolas 8y agoI've seen upwards of 50% for some particularly large customers. To the point of "if we lose our discount, our company goes under".
- hinkley 8y agoMakes you wonder if the vendor is still making money on the deal.
- WrtCdEvrydy 8y agoReserved instances always make money because you make profit without depreciation kicking in.
- tedunangst 8y agoMargins are pretty high, in part due to scale. If AWS were to hypothetically sell 80% of capacity at cost, that makes the last 20% more profitable than it would be to just sell the 20% alone.
- notyourday 8y agoThey get CAF. When CAF runs out, pricing shoots up.
- ryanianian 8y agoWhat's CAF? Googling wasn't very helpful :)
- notyourday 8y agoCustomer Appreciation Funds/Customer Acquisition Funds/etc. "We have $500M available this year that we can spend to lock in $1B in revenue. If you give us $1B in revenue, we would spend $500M on helping you to achieve your objectives. If you give us $100M in revenue, we give spend $50M in helping you to achieve your objectives" So say I need to spend $10M on some project and I am looking at $20M of spend on hosting. You are offering me 10M CAF. I spend $20M on hosting, and 0 on some other project - instead you spend your 10M CAF on helping me with my project, which of course looks really good on my books.