Marketplace changes

As an AWS customer, you might be also using AWS Marketplace. It is a great one stop for your software procurement as it helps you by:

Simplified Procurement:
AWS Marketplace offers a streamlined procurement process, allowing businesses to quickly purchase and deploy software with just a few clicks. The billing is conveniently integrated with your existing AWS account. In large organizations it became a path to circumvent PO requirements and be faster.

Pre-configured Solutions:
Most software solutions in the marketplace come pre-configured for AWS, eliminating the hassle of complex setup procedures.

Vast Selection of Products:
AWS Marketplace offers thousands of software listings from trusted vendors.

Flexible Pricing Options:
The marketplace supports various pricing models, including pay-as-you-go, annual subscriptions, and private offers.

Security and Compliance:
All software listings undergo AWS’s security assessment, ensuring they meet basic security standards.

Though one of its key advantages is how it helps you reduce your annual commitment in the case you are operating under a PPA (private pricing agreement) or EDP (Enterprise Discount Program). Your spending through Marketplace, in everything but Professional Services, counts against your annual commitment with AWS.

For contracts signed before 2022, 50% of Marketplace spend counted towards the commitment, with some exceptions. This changed significantly in 2022, with 100% of eligible Marketplace spend now counting towards the commitment, albeit with a cap at 25% of the annual commitment.

What is coming:

Additionally, starting May 1st, 2025, only SaaS products hosted entirely on AWS will qualify for commitment retirement. This aligns with language introduced in 2022 contracts specifying that only fees for purchases deployed on AWS services count towards commitments. The change does not apply to those products distributed as AMI instead of SaaS. (Starting May 1^st, AWS will display a new seal for identification of these eligible SaaS products).

It’s important to understand that discounts received don’t reduce your commitment amount. If you’ve committed to $2 million in spend, you’ll need to meet that full amount regardless of any discounts applied.

The ability to offset a portion of your PPA commitment through Marketplace purchases offers flexibility in service coverage. This can be particularly valuable for organizations looking to integrate third-party solutions while still meeting their AWS spend commitments. You can also benefit of Private Offers through Market Place in your software licenses renewals and even leverage Chanel Partner Private Offers (CPPO).

Overall, while Marketplace purchases can significantly contribute to meeting your PPA commitments, it’s essential to carefully consider the specific terms of your agreement and the nature of the services you’re purchasing to maximize the benefits of this arrangement.

Reach out to us for a detailed consultation on the impact of this new change when renewing your AWS long term contract.