A multi-national manufacturer with operations across eight countries was approaching the renewal of major cloud commitment agreements with two hyperscalers simultaneously. Combined, the commitments represented over $8 million in annual cloud spend.
The situation had been created by timing: both agreements had been signed within the same 18-month window five years earlier, when the organization was accelerating its cloud migration. Both were now approaching expiration within four months of each other.
The internal cloud team had been managing the vendor relationships day-to-day but had not conducted formal negotiations at this scale before. The procurement team had standard enterprise procurement experience but limited cloud-specific negotiation knowledge. The combination of high dollar value, complex technical terms, and simultaneous timelines created enough risk that external support was brought in.
The goals coming into the engagement: better pricing, more flexibility on commitment structure, and — if possible — staggered renewal dates to avoid being in the same position five years later.
The engagement began with a full usage analysis for each vendor relationship. Cloud commitments are only a source of savings when they match actual usage — a commitment that exceeds usage creates waste; a commitment that underestimates usage requires on-demand purchasing at higher rates. Neither vendor’s current commitment fully reflected the organization’s actual workload distribution.
Usage analysis covered the prior 24 months of consumption data by service category (compute, storage, data transfer, database, analytics), by region, and by business unit. The analysis identified significant variation in usage patterns across business units — some running consistently below their allocated commitment share; others running above it and purchasing on-demand.
Simultaneously, a benchmarking exercise established current market pricing for equivalent services from each vendor. Enterprise cloud pricing is not public, but sufficient market data exists to establish directional benchmarks for negotiation. Both vendors were pricing above the benchmark range for the commitment size.
Manufacturing
Enterprise ($1B+)
Contract Negotiation, Cloud + Software Cost Optimization
14 weeks
Restructured multi-year commitments with improved pricing and flexibility across two major cloud vendors
Both agreements had been structured as flat annual commitments with no flexibility for workload shifts between regions or service categories. The actual workload had shifted significantly since signing — the manufacturer’s European operations had grown, and the North American footprint had partially migrated to different services than were anticipated at original commitment time. The existing structure was creating both over-commitment in some areas and on-demand purchases in others.
Both vendors were pricing the renewal based on the existing relationship and historical spend — not current market pricing for the commitment size. The pricing each vendor presented as the renewal offer was, in both cases, above what benchmarking indicated was achievable.
The internal team had been negotiating each vendor relationship separately, without applying competitive pressure between them. Both vendors had reason to believe the relationship was not seriously at risk. Neither had been given a reason to compete.
As identified at engagement start — the simultaneous renewal dates created concentrated risk. One bad renewal would have limited consequences; two simultaneous poor renewals would lock in above-market pricing across the full cloud commitment for another multi-year term.
Rather than negotiating both vendors simultaneously (which would have required splitting attention and reduced leverage over each), the engagement structured a sequenced negotiation: bring one vendor to a competitive offer, use that offer as explicit leverage in the second negotiation, then return to the first vendor with the second vendor’s response.
The leverage was only credible if the organization was actually willing to shift workload. Unravyl worked with the cloud team to identify the portion of workload that was genuinely portable between vendors in the relevant timeframe. This became the credible commitment migration offer — not a bluff, but a specific workload portfolio that could be moved.
Rather than renewing on the same flat-commitment structure, the organization proposed a flexible commitment structure with quarterly true-up provisions, regional allocation flexibility, and service category flexibility. This structure better matched the actual workload distribution and reduced the risk of over-commitment waste.
A core negotiating ask was staggered renewal dates — one agreement renewed for two years; the other for three years. Both vendors accepted this structure, which eliminates the concentrated renewal risk going forward.
Specific pricing outcomes are confidential per agreement terms. The summary outcome:
The CFO characterized the outcome as the most favorable cloud renewal the organization had experienced, specifically noting the structural improvements — flexibility and staggered dates — as equally valuable to the pricing improvements.
Enterprise cloud renewals consistently underperform their potential because organizations negotiate from a relationship posture rather than a competitive posture. Vendors price to the path of least resistance unless given a reason to compete. The combination of credible alternatives, competitive sequencing, and structural proposals (not just price asks) is what produces outcomes above the vendor’s default renewal offer.
For organizations with multi-vendor cloud environments, the simultaneous renewal problem is common and addressable — but only if it’s identified well enough in advance to allow for proper preparation. Cloud contract negotiations that start 60 days before expiration produce worse outcomes than negotiations that start 9–12 months out.
