AWS, GCP, and Azure Hyperscaler Comparison: Be Aware of Key Commercial Terms


businesswoman finding devil in contract

How the hyperscalers differ with their rights to modify agreements and more

If you’re evaluating which hyperscaler is best for hosting your ERP environment, you’ll find that there is no shortage of technical comparisons of AWS, Google Cloud Platform (GCP), and Microsoft Azure, many of which will even list specifics such as shock performance or global availability zones.  While those factors certainly matter, you should also consider what your commercial agreement will look like with each provider since you’ll likely have a relationship with them for many years.

Customers debating between hyperscalers should ask questions such as:

  • What do Microsoft, Google and AWS provide for missed SLA’s?
  • Can the provider adjust my services mid-term?
  • Can they change our agreement without telling me?
  • Do they offer special introductory pricing or free offers?

To help answer some of these questions, I review each of the hyperscaler’s standard Cloud Platform/Compute/Storage agreements (as of 3/3/21) and list what I consider to be noteworthy and, in some cases, problematic commercial terms.  Each of these standard agreements are publicly available to view and download from the provider’s respective websites.

If you would like to review the standard agreements, you can follow these links:

Here are some of the items that you should be aware of before you enter into an agreement with any of the hosting hyperscalers:

Uptime and Credits for Missed SLAs

The standard uptime for each provider is the same – 99.99%.  This is the industry-standard high so there is not much to learn here.  To be clear, each provider offers a range of uptimes depending on the environment.

All three of the hyperscalers include credits for missed SLAs as part of their standard agreement – a win for customers!  Credit is calculated as a % of the total charges for the affected service (further detail is included in the table at the end of this blog).

Note that Google is the only provider unwilling to put 100% of their fees ‘at risk’.  Also, you must notify AWS about missed SLA’s to receive a credit which means you would need to be tracking them at all times.

Provider Right to Adjust Service Levels

With Microsoft Azure, service levels are locked during the initial term and renewals are governed by the then-current SLA on the web portal.  GCP and AWS both have standard agreements that give them more flexibility to adjust service levels.

GCP may make materially adverse changes to your SLA’s with only a 90-day notice.  AWS, on the other hand, may change/discontinue any service level agreements without giving a notice.  AWS simply has to update their standard agreement on their website.

Tip: While AWS and GCP are unlikely to damage their reputations by exercising the full scope of their rights within this area, save your enterprise some risk by obligating your provider to lock/guarantee your service levels across the full committed term and any renewals.  Don’t accept a link to the SLAs in your contract.  Look to get the full detail spelled out in your agreement so there is full clarity.

Discontinuation/Modification of Services

While Microsoft doesn’t have any language in their standard agreements that is specific to discontinuation/modification rights, both AWS and GCP reserve the right to discontinue functionality with a 12-month notice.  However, AWS does not have to give you any notice if it would pose an Intellectual Property (IP) issue with them.

Google also included the following language:

Google may make commercially reasonable updates to the Services from time to time. Google will inform Customer if Google makes a material change to the Services that has a material impact on Customer’s use of the Services provided that Customer has subscribed with Google to be informed about such change.”

The question that comes to my mind is, “What defines ‘commercially reasonable’ and who is it reasonable to?” This language is simply too open-ended for my liking.

Tip: A simple way to avoid this risk is to ensure your agreement includes language guaranteeing the services you subscribe to will not lose any functionality during the agreed term.

Termination for Convenience

Termination for Convenience (T for C) language is becoming a very common bargaining chip among cloud software and infrastructure providers.  Here’s how the T for C language differs between the hyperscalers:

  • Azure: Customers subscribed to Azure for a committed term may T for C with no penalty within the first month of service but they lose all ability to terminate thereafter.
  • AWS: Both you and Amazon have T for C rights.
  • GCP: Customers may stop using the Services at any time. Customers may terminate this Agreement for its convenience at any time on prior written notice and, upon termination, must cease use of the applicable Services.  Google may terminate this Agreement for its convenience at any time with 30 days’ prior written notice to Customer.

You may not be able to get out of all financial commitments, so it is still important to size your environment as best you can to your needs.  Do not over-commit spend hoping that Termination for Convenience rights will save you.

Tip: Make it an early negotiation strategy to get your selected provider to give up their right to terminate while maintaining your rights at any point of your agreement term.

Affiliate Use Rights

Microsoft Azure and GCP will allow you to sign over existing rights to their SaaS offerings to one of your affiliates.  Infrastructure purchases do not come with the same rights, unfortunately.

AWS will not allow you to assign rights to an affiliate without prior written consent, but they can wash their hands of the contract and assign their responsibilities to a third-party affiliate of theirs without even requesting your permission if it is part of a ‘corporate reorganization’.

Sneaky Renewal Terms

Both GCP and Azure have automatic renewals that must be opted out of.  Auto renewals are somewhat common practice and not exactly predatory, just something to be noted.  What you should be aware of is that Microsoft grants themselves quite a bit of leeway with the right to govern your renewal under whatever terms and conditions exist on their portal at the time of your renewal.

Tip: I recommend addressing automatic renewals very early in negotiations with any of these providers and to specify that any renewals will be governed by the initial terms of the agreement, or mutually agreeable new terms.

Support Incident Response Times

The hyperscalers each offer a range of support options, but among the paid ‘mid-level’ options there is no clear winner.  Here is a side-by-side comparison:

  AWS GCP Azure
Support Incident Response Times P1 = 1 Hour

P2 = 4 Hours

P3 = 12 Hours

P4 = 24 Hours

(Business Support)

P1 = 1 Hour

P2 = 4 hours

P3 = 8 hours

P4 = 8 hours

P1 = 1 Hour

P2 = 4 Hours

P3 = 8 Business Hours

(Standard Support)

 

Edits to Agreement

Again, the risk of these providers exercising the right to edit the agreement and villainizing themselves in the industry may not be likely, but Google does have this right under their standard agreement.

GCP’s standard agreement states:

“Google may make changes to this Agreement, including pricing (and any linked documents) from time to time.  Unless otherwise noted by Google, material changes to the Agreement will become effective 30 days after they are posted, except to the extent the changes apply to new functionality in which case they will be effective immediately.”

Free Trials and Introductory Offers

Each of the providers offer some sort of introductory perk or free trial to entice companies to try out their service.  This is especially relevant for smaller enterprises looking to ‘dip their toes’ into cloud hosting.

  AWS GCP Azure
Free/Promotional Offers
  • Free 750 hours of Elastic Cloud Compute
  • Free $300 credit and limited access to the platform’s most popular products for 90 days.
  • Compute usage limited to 8 cores.  Google may cancel at any time without notice.
  • Free 12-month trial of Virtual Machines with access to limited number of feature products +$200 credit in first 30 days.

SAP Specifics

If you are looking to host your SAP environment with one of these hyperscalers, as many are, you’ll want to pay attention to these specifics.  SAP named Azure their preferred cloud hosting partner in late 2019, giving Microsoft the advantage when deploying or migrating SAP environments.  However, they each offer different SAP-specific services which are listed below.

  AWS GCP Azure
SAP Specifics
  • Offers BYOL (bring-your-own-license), subscriptions, or pre-built on-demand SAP hosting (by the hour!) from the AWS marketplace.
  • HANA Express Edition (a streamlined version of SAP HANA that is free to use for in-memory databases up to 32GB).
  • Save up to 75% with reserved/committed instances.
  • Free Dev license from SAP with on-demand infrastructure purchase.
  • Live migration/auto restart features built in.
  • Offers BYOL — Google does not resell SAP.
  • Offers BYOL, subscriptions, pre-built on-demand SAP hosting, or SAP Cloud Platform as a Service (PaaS).
  • Save up to 80% when reserving instances.

The following table provides a high-level recap of all of the elements covered:

Topic Amazon Web Services Google Cloud Platform Microsoft Azure
Standard Uptime 99.99% 99.99% 99.99%
Credits for Missed SLA’s?

(Credit is calculated as % of total charges for affected service)

<99.99% = 10%

<99% = 30%

<95% = 100%

(You must notify AWS about missed SLA’s to receive a credit, which means you would need to be tracking them at all times).

<99.99% = 10%

<99% = 25%

<95% = 50%

 

<99.99 = 10%

<<99% = 30%

<95% = 100%

 

Provider Right to Adjust Service Levels
  • Amazon may change/discontinue any service level agreements with no timeframe given.
  • No notice required; Amazon simply has to update their standard agreement on their website.
  • GCP may make materially adverse changes to your SLA’s with only a 90-day notice.
  • Service levels are locked during initial term.  Renewals are governed by then-current SLA on the web portal.
Repackaging Rights
  • Able to discontinue material functionality with 12-month notice, except if it would pose an IP issue to them, in which case they don’t have to give any notice.
  • Google may discontinue any service or functionality with 12 months’ notice.
  • May make commercially reasonable updates to the Services from time to time. They will inform Customer of a material change that has a material impact on Customer’s use of the Services provided that Customer has subscribed with Google to be informed about such changes.
  • No language noted.
Termination for Convenience
  • Both you/Amazon have T for C rights
  • Customers may stop using the Services at any time and may terminate this Agreement for its convenience at any time with prior written notice and, upon termination, must cease use of the applicable Services. Google may terminate this Agreement for its convenience at any time with 30 days’ prior written notice to Customer.
  • Customers subscribed to Azure for a committed term may terminate for convenience with no penalty within the first month of service but lose all ability to terminate thereafter.
Discontinuation /Modification of Services

 

  • Prior written consent required.

Exception:  AWS ‘may assign this Agreement without your consent to any affiliate or as part of a corporate reorganization; and effective upon such assignment, the assignee is deemed substituted for AWS as a party to this Agreement and AWS is fully released from all of its obligations and duties to perform under this Agreement.’

  • Customer may authorize its and its affiliates’ employees, agents, and subcontractors (Software Users) to use the Software in accordance with this section (License), so long as Customer remains responsible.
  • No part of the agreement may be assigned to an affiliate by either party without written consent.

 

  • You may place orders for your affiliates under this agreement and grant them administrative rights to manage the subscription, but they may not place orders under this agreement.  You also may assign the rights granted under Section 1a. to a 3P for use by that 3P in your internal business.  If you grant any rights to affiliates or 3P’s with respect to software or your subscription, they will be bound by this agreement and you agree to be jointly and severally liable for any actions of such affiliates or 3P’s related to their use of the products.
Sneaky Renewal Terms
  • None noted.
  • Automatic renewals must be opted out of.
  • Automatic renewals must be opted out of.
  • Renewals are governed by current T’s and C’s that exist on their website at that moment.
Support Incident Response Times P1 = 1 Hour

P2 = 4 Hours

P3 = 12 Hours

P4 = 24 Hours

(Business Support)

P1 = 1 Hour

P2 = 4 hours

P3 = 8 hours

P4 = 8 hours

P1 = 1 Hour

P2 = 4 Hours

P3 = 8 Business Hours

(Standard Support)

Edits to Agreement
  • No language found.
  • Google may make changes to this agreement, including pricing (and any linked documents) from time to time. Unless otherwise noted by Google, material changes to the Agreement will become effective 30 days after posting, except if the changes apply to new functionality, when they will be effective immediately.
  • No language found.
Complimentary Offers
  • Offers 750 hours of Elastic Cloud Compute at no charge.
  • Free $300 credit and limited access to the platform’s most popular products for 90 days.  Compute usage limited to 8 cores. Google may cancel at any time without notice.
  • Free 12-month trial of Virtual Machines with access to limited number of feature products +$200 credit in first 30 days.
SAP Specifics
  • Offers BYOL, subscriptions, or pre-built on-demand SAP hosting (by the hour!) from the AWS marketplace.
  • HANA Express Edition (a streamlined version of SAP HANA that is free to use for in-memory databases up to 32GB).
  • Save up to 75% with reserved/committed instances.
  • Free Dev license from SAP with on-demand infra purchase.
  • Live migration/auto restart features built in.
  • Offers BYOL — Google does not resell SAP.
  • Offer BYOL, subscriptions, pre-built on-demand SAP hosting, or SAP Cloud Platform as a Service (PaaS)
  • Save up to 80% when reserving instances.

 

There are many considerations for hosting SAP with a hyperscaler but there are important differences in each of the provider’s commercial term agreements.  If you have any examples of ‘gotchas’ in your agreements with these vendors, or have additional questions on this topic, please comment below.

Email me at [email protected] with questions about this topic or recommendations for future topics. Comment below, follow me on Linkedin and follow UpperEdge on Twitter and LinkedIn.  Learn more about our IT Cost Optimization Advisory Services.

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Brian Undlin

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