CIOs highlight negotiation opportunities as AWS and Google lower cloud costs

Recent cloud price revisions by AWS and discounts offered by Google Cloud for some of their key services have created opportunities for CIOs to negotiate better contracts or lock in low-price contracts.

Industry analysts emphasize that these price cuts are driven by more than just competitive pressure. “Two key factors drive the recent price cuts by AWS, Microsoft, and Google,” said Manish Ranjan, Research Director for Software and Cloud at IDC MEA. “First, they’re strategically positioning themselves for the evolving cloud market, particularly as demand grows for GenAI applications requiring specialized compute resources like GPU as a service, and second, they’re working to maintain their market leadership against a diverse competitive landscape. These price adjustments reflect both forward-looking technology strategy and competitive market positioning.”

Many CIOs see these developments as unique opportunities to renegotiate contracts and lock in more favorable terms to secure the flexibility needed to adapt as business needs and cloud economics continue to evolve.

“With greater competition and more efficiencies as each one scales, this is only a positive thing. It makes sense if your strategy leans towards one hyperscaler to lock them into a more long-term agreement. It would be beneficial to have some terms that allow the agreement to flex down as further economies of scale swing in the consumer’s favor,” Anthony Lynsdale, former vice president for IT at Atlantis the Palm.

Lynsdale emphasized the importance of partnership and flexibility, especially in today’s volatile business climate. “We’re looking for vendors willing to be more flexible in the long term and taking advantage of their fiscal year end to use as leverage.” He advocates for maximizing contract scope, maintaining open conversations throughout the lifecycle, and adopting a pay-as-you-grow approach. “No point in paying for something at the very end of the implementation cycle. Partnering with vendors who support such drivers is important, as they understand the long-term strategy.”

Filip Nekvinda, chief information and digital officer at ALJ Enterprises said that price cuts are a good moment to revisit cloud commitments but warns against focusing solely on cost: “It’s not just about securing a better deal, but about stepping back to check whether the services still align with where the business is heading. If they do, then it makes sense to use this moment to negotiate improved pricing and more flexible terms.”

“I always look at the platform’s reliability, the quality of support, how well it integrates with our systems, and whether it gives us the flexibility to scale or pivot in the future. Price cuts may open the door, but the overall value and long-term fit matter,” Nekvinda added.

For Wilfredo Perez, CIO at Muvi Cinemas, a multi-cloud and platform-agnostic approach will minimise the impact of any single provider’s price drop. “For sure, we celebrate a price reduction, but our strategy goes in the direction of being platform-independent or multi-cloud. Combining this idea with a pay-per-use model, we can balance and get a higher ROI,” he said.

Perez divides workloads between pay-per-use, cloud-native services for transactional needs and reserved instances for resource-intensive tasks, using containers for maximum flexibility. In contract negotiations, he focuses on cost transparency, clear SLAs, and the ability to add licenses as needed.

“Every day, cloud infrastructure and services are becoming more commoditized. By designing solutions with a multi-cloud strategy, you can unlock significant benefits and avoid vendor lock-in. The market now offers many solution providers beyond just AWS, Azure, and Google Cloud, especially in the AI space, which is experiencing strong demand and rapid growth,” Perez explained.

The consensus among CIOs is that while a price reduction can create leverage for buyers, the best deals go beyond headline discounts. Flexibility, transparency, and alignment with business goals are critical. Enterprises that can act quickly and negotiate hard stand to lock in significant savings, but only if contracts allow for adaptation as needs evolve.