CONDENSE
GLOSSARY

A cloud commitment glossary for buyers, in plain language.

This cloud commitment glossary defines the terms that decide whether a hyperscaler deal is good or punishing: EDP, MACC, committed use, shortfall, ramp, and the rest. Each entry is written for the buyer, with dated mechanics so it ages well.

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Cloud commitment deals are full of language designed by the seller. This cloud commitment glossary translates that language into terms a buyer can act on. Every definition explains not just what a term means but why it matters to your leverage and your risk before signature (as of June 2026).

How to use this cloud commitment glossary

Start with the program your deal touches, then follow the links into the risk and structure terms that surround it. Each entry links up to its program pillar and across to related terms, so you can move from a single definition to the full picture of how a commitment is priced and where the traps sit.

KEY TERMS
AWS Enterprise Discount Program The AWS spend commitment that unlocks tiered discounts over a one to five year term.
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AWS Private Pricing Agreement The contract form an AWS EDP usually takes for custom enterprise pricing.
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AZURE Azure Consumption Commitment The fixed dollar Azure spend a MACC commits a buyer to over the term.
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AZURE Microsoft Customer Agreement The agreement a MACC is commonly tied to, alongside the Enterprise Agreement.
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GCP Committed Use Discount The Google discount earned by committing to resource or spend over one to three years.
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GCP Sustained Use Discount The automatic Google discount that needs no commitment at all.
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AWS Reserved Instance A capacity reservation that an EDP discount can stack on top of.
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AWS Savings Plan A flexible commitment that an EDP discount can also stack on top of.
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RISK Shortfall Penalty What a buyer owes when committed spend outruns actual usage.
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STRUCTURE Ramp Structure The staged schedule that increases a commitment over the term.
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RISK Overcommitment Committing to more spend than real consumption will reach.
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STRUCTURE Commitment Coverage Ratio The share of spend covered by a commitment versus on demand.
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AWS Enterprise Discount Program The AWS spend commitment that unlocks tiered discounts, also called a Private Pricing Agreement.
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AZURE Azure Consumption Commitment The fixed dollar amount of Azure and Marketplace spend a MACC commits a buyer to.
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AWS Private Pricing Agreement Another name for the AWS EDP, the negotiated contract behind your discount.
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GCP Resource Based Commitment A GCP CUD tied to vCPU and memory, flexible across instance types in a region.
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GCP Spend Based Commitment A GCP CUD tied to a dollar amount of spend rather than specific resources.
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AWS True Up The annual reconciliation of committed spend against what you actually consumed.
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AZURE Drawdown How committed dollars are consumed against a MACC across the term.
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AZURE Marketplace Eligible Spend Marketplace purchases that can count toward a MACC commitment.
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STRUCTURE Commitment Term The length of a commitment, commonly one to five years.
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STRUCTURE Co Termination Aligning multiple agreements to a single end date to consolidate leverage.
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RISK Auto Renewal Clause