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Crane Construction
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£250k of Azure cloud operation savings made 7 days before renewal 

Procurement solution

The Challenge

With just seven days until contract expiry, Costain’s CFO was asked to approve a £4.8m, three-year Azure cloud operations renewal.

 

After months of IT-led negotiation, the commercial position had barely moved. The supplier was still proposing a 3% increase despite declining Azure consumption.

 

Concerned the deal had not been robustly challenged, the CPO brought in SWAN.

 

We quickly identified the issue went beyond price. The operating model, role mix and cost base were no longer aligned to Costain’s actual cloud requirements.

Procurement problem

The Assessment

SWAN immediately broke the £4.8m deal apart, benchmarking the management cost, individual resource rates, onshore/offshore mix and overall operating model.

 

The analysis exposed significant commercial leakage:

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  • Management costs were approximately 30% oversized relative to Azure spend

  • Resource rates were more than 15% above market

  • Costs could not flex as Azure consumption reduced

  • There was little meaningful protection against supplier under-performance

 

With seven days remaining, SWAN turned the findings into a negotiation strategy and went directly into the supplier negotiations alongside Costain.

Solution results

The Outcome

SWAN secured £250k in annual savings while avoiding an excessive multi-year commitment. The revised deal:

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  • Reduced annual costs by £250k

  • Aligned the contract term with Costain’s existing Microsoft Azure agreement

  • Preserved the ability to competitively retender and consolidate both services at the next Azure renewal

  • Significantly improved Costain’s leverage for the next negotiation

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