Understanding the Risk Transfer
One of the most important — and often overlooked — aspects of working with Cloud Capital is where the financial risk of AWS commitments sits. This distinction has meaningful implications for both your finance team and your technical leadership.Cloud Capital Absorbs the Commitment Risk — Not YouWhen a business purchases AWS Reserved Instances or Savings Plans directly, it carries the full financial risk of those commitments. If workloads shrink, consolidate, or shift — for any reason — the unused commitment still must be paid. For most organizations, that risk is difficult to quantify and harder to hedge.While you are a customer of Cloud Capital, we manage your commitments, that risk transfers to us. Cloud Capital covers the risk of the commitments, monitoring utilization continuously — meaning you receive the financial benefits of long-term commitments without being exposed to the downside if your needs change.
Guaranteed Savings Rate (GSR)Cloud Capital backs your commitment coverage with a Guaranteed Savings Rate. This means your organization is contractually assured a minimum level of savings relative to On-Demand pricing — combining the financial flexibility of managed risk with the certainty of a known, guaranteed savings. You get the upside of long-term AWS commitment discounts without the uncertainty of managing that exposure yourself.
Establishing the Baseline
Our application analyzes your AWS Cost and Usage Report (CUR) data from the preceding months to establish a reliable baseline of actual spend. From this, we identify committable spend across all possible resource types — primarily compute workloads eligible for Compute Savings Plans and database type workloads eligible for Database Savings Plans or Reserved Instances — and generate a structured ladder proposal tailored to your situation.The Four-Step Commitment Ladder
Rather than recommending full commitment coverage upfront, Cloud Capital proposes a four-step ladder approach that builds coverage incrementally over time. Each step commits approximately 50% of the remaining uncommitted spend for a given resource type, so coverage grows substantially with each rung while preserving flexibility as your environment evolves. The term mix across the ladder — whether 3-year, 1-year, or a blend of both for Compute Savings Plans, and 1-year for Database Savings Plans or Reserved Instances — is determined by your risk tolerance, savings targets, and confidence in the forecast horizon. Shorter terms offer more flexibility; longer terms deliver deeper savings. Cloud Capital’s recommendations balance both.| Step | Coverage Added | Cumulative | Term Mix | Commitment Type |
|---|---|---|---|---|
| 1 | 50% of committable spend | ~50% | 3-yr or 1-yr | Compute SP, Database SP / RIs |
| 2 | ~25% of baseline | ~75% | 3-yr, 1-yr, or blended | Compute SP, Database SP / RIs |
| 3 | ~12.5% of baseline | ~87.5% | 1-yr (near-term flexibility) | Compute SP, Database SP / RIs |
| 4 | Remaining gap to full coverage | ~100% | 1-yr or shorter | Compute SP, Database SP / RIs |
Each ladder step is reviewed and approved collaboratively with your team before any commitment is purchased.
Weekly Review Cadence During Ladder-Up
The ladder-up process takes place over a series of weekly savings review meetings. These sessions give Cloud Capital and the customer the opportunity to assess each proposed commitment step together before it is purchased. As new initiatives are identified — or business metrics shift projected usage up or down — the remaining rungs of the ladder are adjusted accordingly, ensuring that each commitment reflects the most current view of your needs rather than a static snapshot taken at onboarding. Once the initial resource coverage has been established, the first stack of initiatives has been factored in, and one or more business metrics have been incorporated to tune the forecast, Cloud Capital transitions you to a monthly review cadence. At this point the relationship shifts from active ladder-up to ongoing management — continuing to monitor commitment performance, refine the forecast, and identify new savings opportunities as your cloud footprint grows and changes.During Ladder-Up
Weekly savings review meetings. Each session reviews the forecast, approves the next commitment step, and incorporates any new business information before a commitment is purchased.
Ongoing Management
Monthly review meetings once the ladder is complete. Focus shifts to commitment performance, forecast refinement, and identifying new optimization opportunities.