Why AWS Is Cracking Down on Cloud Commitment Loopholes

If our last post made your stomach turn a little, that’s not surprising. In case you forgot, as a painful reminder:

Starting June 1, 2025, AWS will prohibit the sharing of Reserved Instance (RI) and Savings Plan (SP) discounts across multiple customers. Each discount must now apply to a single end-customer’s AWS usage.

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When we said the cloud commitment games are ending, we weren’t being dramatic. The shift AWS is making is real, and it’s going to change how your cost structure behaves, especially if you’ve been relying on flexibility that’s quietly propped up by vendor tricks.

But the big question is why. Why is AWS suddenly cracking down? Why now? What’s changed?

As a CFO, you’re likely not in the weeds of how RI/SP pooling or sub-account shuffling works. And to be honest, you shouldn’t have to be. What you do need is a clear understanding of the motivations driving AWS’s behavior, and what it means for you.

Because this isn't a policy tweak. It's a market correction. And it has everything to do with risk, capital, and trust.

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Let’s start with the basics: AWS isn’t being heavy-handed, they’re being rational.

Every time a business commits to Reserved Instances or Savings Plans, AWS makes resource allocation decisions based on that commitment. That means deploying physical infrastructure. Powering data centers. Staffing operations. Planning long-term capacity. This is not virtual. It’s not flexible. And it’s very expensive.

Think of it like this: if a developer commits to building you a custom office building for your company, and you back out halfway through construction, they’ve already sunk the cost. That’s where AWS is right now.

For too long, companies have signed commitments and then wriggled out of them using vendor-supported workarounds. From AWS’s perspective, that’s like breaking a contract after the supplier has already placed the order.

AWS’s crackdown aims to protect the financial integrity of its infrastructure investments by ensuring that customer commitments are reliable, non-transferable, and tied to actual long-term usage patterns.

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The scale of the problem is hard to overstate

This isn’t about one or two vendors pushing the limits. It’s systemic. Whole industries have been built around dodging commitment risk, without absorbing it.

Some platforms group-buying / pooling commitments across customers, making it easy for no one to carry real exposure. Others shift commitments between sub-accounts or automate RI returns, creating the illusion of flexibility where none was intended. And the RI Marketplace? It’s been treated more like a commodities exchange than a pricing mechanism.

For a while, it worked. AWS tolerated it. The growth was there. The usage was there. Everyone won. Until they didn’t.

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Why it’s ending now

So why is AWS acting now? Why not let the system keep humming? Simple: the incentives broke.

The very thing that made AWS work at scale, predictable infrastructure investment based on customer commitment, got undermined by too much flexibility. If companies can sign a 3-year commitment and exit a few months later with no consequences, AWS can’t plan. And when AWS can’t plan, they risk misallocating billions in capex.

That’s not just frustrating. It’s dangerous. Because AWS isn’t just trying to make a margin, they’re trying to run a globally scaled infrastructure business with long lead times, high fixed costs, and massive capital outlay. Once the financial models start to fail, action follows quickly.

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What this looks like in practice

Without the ability to enforce commitment discipline, AWS faces not only wasted investment but also destabilized pricing models, which could ultimately increase costs for all customers.

We’re expecting AWS to roll out enforcement gradually, but firmly. Some of the changes will be technical:

• Blocking commitment group-buying, pooling
• Clamping down on sub-account reshuffling
• Blocking the sharing / redistribution of AWS Credits

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Others will be contractual or behavioral:

• Stricter program terms
• Reduced leniency in account support
• Penalties for misuse or policy violations

AWS will enforce compliance through its partner programs. Partners, resellers and vendors who continue pooling or transferring commitments across customers after June 1, 2025, risk losing their partner status or being removed from the program altogether.

AWS has confirmed that certain legacy agreements signed before June 1 may continue operating under the previous model, provided they’re properly disclosed and documented. If your vendor hasn’t mentioned this, it’s worth asking.

But the bottom line is this:
‍if your vendor strategy relies on flexibility AWS no longer wants to offer, you’re in trouble.

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“But isn’t this bad for customers too?”

Not necessarily. It’s easy to think, “Well, AWS cracking down just makes it harder for us.”

But there’s another angle. The current system made commitments feel optional. That sounds good, until it creates confusion, misaligned incentives, and surprise costs for you as the finance leader. We’ve seen dozens of situations where:

• Commitments were made assuming “someone will sort it out” later
• Finance expected flexibility that engineering couldn’t deliver
• Cloud usage dipped, and suddenly there was no way out
  
  

So while the new rules may feel restrictive, they also offer a clearer playing field. One where you know exactly what you're getting into. One where you can build a proper risk-adjusted strategy, rather than a patchwork of hope and hacks.

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This shift also exposes just how fragile many vendor models have become

A lot of cost optimization tools and cloud resellers built their entire businesses around working against the AWS commitment structure, rather than with it. That might have seemed clever. But it wasn’t sustainable. Because the moment AWS decided to stop tolerating it, those vendors lost their leverage. And now, they’re scrambling to pivot. Some will adapt. Others won’t.

But either way, you shouldn’t be left exposed in the meantime.

If your current vendor can’t offer clarity on what happens when the flexibility goes away, it’s time to rethink your relationship.

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OK, but how big is this really?

Let’s talk numbers. There are billions of dollars in active cloud commitments across AWS customers. That’s not hypothetical, it’s capital already allocated, usage already promised, pricing already locked.

Even if a small fraction of those were signed under the assumption they’d be offloaded, resold, or optimized later, we’re facing a major reckoning. And some segments are especially exposed:

• Venture-backed startups who needed short-term savings and took on long-term commitments
• Mid-market tech firms with inconsistent usage patterns and high growth volatility
• Multi-product businesses shifting infrastructure strategies post-acquisition or after roadmap pivots
  
  

In other words: companies like yours. And the early signs are already here. CFOs are starting to flag concern. Commitments are becoming harder to manage. Flexibility is drying up. And AWS isn’t blinking.

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This is what a market correction looks like

Let’s zoom out for a second. What AWS is doing is exactly what you’d expect in a maturing financial market.

In the early days of cloud, pricing needed to be aggressive. Flexibility was part of the game. But now, as growth stabilizes and infrastructure demands increase, AWS is tightening the economics. That means less tolerance for misaligned incentives, and more emphasis on stable, transparent commitment structures.

From a finance lens, this isn’t a crisis. It’s a correction. One that lets you actually start planning with confidence, if you’re prepared.

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So what does this mean for you as a CFO?

It means your job is no longer just about monitoring cloud spend, it’s about actively managing cloud exposure. You’ll need to:

• Get full visibility into your current commitment footprint
• Understand the real terms behind your vendors’ strategies
• Push for more transparent, sustainable pricing structures
• Align with your CTO to ensure cloud finance reflects real usage, not hopeful forecasts
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If companies fail to adjust, they could face sudden budget overruns, stranded commitments, and forced accounting write-downs that directly impact gross margins and cash flow. You may also need to start asking hard questions inside your own org: “What assumptions are baked into our cost model that are no longer valid?”

Because if your forecast relies on exit flexibility that’s disappearing, your margin model could unravel quickly.

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You still have time, but not much

June 1st 2025 is just around the corner.

If you haven’t reviewed your cloud commitments, clarified your vendor exposure, and rethought your approach to risk, this is your window. Do it now, and you’ll be positioned to lead through the transition. Wait, and you’ll be left reacting after the fact.

If your vendor strategy relies on flexibility that’s vanishing, you’re exposed. We’re helping CFOs stress-test their commitment footprint and model their downside risk. Want to see if your current approach will hold up? Let’s talk. No pitch. Just clarity.

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In Part 3 of this series, we’ll walk through exactly what CFOs should be doing right now to get ahead of the shift.

We’ll break down how to audit your exposure, model your downside, and rebuild a procurement strategy that works in this new reality. You don’t have to navigate this alone.  We’ve helped dozens of finance leaders restructure their approach, and we’re here to help you too.