Comment by mirochnik | Hacker News Reader

Comment by mirochnik | Hacker News Reader

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Netflix is a flagship example of AWS usage. https://aws.amazon.com/solutions/case-studies/innovators/net... We don't know what are Netflix discounts. Maybe Netflix uses AWS just for free to make others pay. Maybe AWS even pay to Netflix to continue attracting the other guys.

On the other hand, just read this disclosure in the Netflix 2023 annual financial report: "We have architected our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS... Given this, along with the fact that we cannot easily switch our AWS operations to another cloud provider, any disruption of or interference with our use of AWS would impact our operations and our business would be adversely impacted. While the retail side of Amazon competes with us, we do not believe that Amazon will use the AWS operation in such a manner as to gain competitive advantage against our service, although if it were to do so it could harm our business."

> We don't know what are Netflix discounts

What you do, if you're a VC backed SaaS company with a six or seven figure monthly spend on AWS, is hire away someone from Netflix who does know what their discount is and use that when your next contract negotiation is up with AWS.

Why does knowing the discount give you any additional leverage?

Knowing X get Y% discount would give you the opportunity to ask for the same Y% discount. Not just AWS, in enterprise world the service provider will always make the % discount a secret and you can’t tell anyone else.

You can ask and they will ask for a Netflix size commitment in turn. Volume prices (they are essentially volume discounts) are often public.

I always have the opportunity to ask for Y% discount. Regardless of my knowledge of existing agreements.

Almost universally, you get taken more seriously when you demonstrate you understand the exact quantity of leverage you have.

“I know this is possible because we had it at X” is a lot different conversation than “We want X”. Your leverage is even worse when X is nowhere near reality (in either direction).

What we've seen with AWS (and we only discounted like 2 services) is that if you commit to a monthly spend amount on a service you can get substantial discounts on that service.

There are EC2 plans as well, which I assume means that you can get discounts off the reserved instance pricing - but you'd have to ask your AWS rep about that.

If you spend > 4 figures on an AWS service you should ask for their discount plan. Nobody wants to say what they get discounted on, because they might lose them (and the contracts are confidential). So you have to ask your rep.

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