Ep 102 – 3 ways to maximize hyperscaler discounts (Brandon Pizzacalla)

According to Brandon Pizzacalla, CEO of CloudFix, the three biggest mistakes are: Using EDP as the first step instead of the last—companies should optimize using compute savings plans, reserved instances, credits, and usage-based discounts before considering EDP. Second, overcommitting to increasing spend targets that AWS sales teams push, which can result in paying more than if you had no EDP at all. Third, having only one FinOps person handle negotiations instead of assembling a full team including legal, engineering, finance, and business stakeholders to negotiate these multi-million dollar deals strategically. Learn more about CloudFix.

The long tail consists of seemingly small items like $100 or $1,000 annual services that companies ignore because they focus on big-ticket optimizations. However, millions of dollars sit in these accumulated small expenses. For example, CloudFix saved $250,000 internally just by automating the optimization of Amazon QuickSight dashboards at $24 per user per month. Companies don’t tackle this because it requires either expensive experts or significant investments of time to build and maintain automation in-house—both of which deliver poor ROI.

DR has negotiated an exclusive CloudFix discount for telcos through a TelcoDR partnership. It specifically targets operators spending more than $20 million annually with AWS to help them prepare for their next EDP negotiation. CloudFix can help save up to 20% on total AWS bills and as much as 50% on EC2 spend—typically the biggest line item. With TelcoDR’s special arrangement, telcos can maximize these savings, freeing budget for strategic initiatives like AI investments.

CloudFix uses AI in two key ways: First, via a UI Copilot that understands what’s happening on your screen and guides you through implementing optimizations in your AWS dashboard. Second, deep insights and recommendations by ingesting thousands of lines of code from Lambda functions, S3 buckets, ticketing software, and usage statistics. AI analyzes all this data to understand why you’re using specific instances and provides detailed recommendations on how to adjust parameters to save money while maintaining functionality. This level of analysis wouldn’t be cost-effective with human support alone.

Beyond technical optimizations, CloudFix recommends three business strategies: First, identify key cloud cost drivers on a per-user or per-transaction basis and align them with business goals. Second, implement chargebacks—financial penalties for teams or business units that use inefficient cloud resources, creating incentives for better behavior. Third, optimize your discount portfolio by switching from inflexible reserved instances to compute savings plans (covering 30% of consistent workload) and convertible reserved instances for remaining compute needs. CloudFix RightSpend automates this discount optimization.

Companies must optimize continuously, not just before renewal deadlines. AWS snapshots your usage three to six months before your EDP renewal to calculate discounts, and AWS representatives will push to base commitments on current spending levels. You cannot simply tell AWS you’ll optimize $8 million out of your spend during negotiations—it locks in to your current usage levels. This means cost optimization must be an ongoing practice, not a last-minute effort. Solutions like CloudFix help maintain continuous optimization when DevOps teams are too busy with higher-priority tasks to focus on cost management.