The cloud-computing market is changing quickly, and it could force Amazon, Microsoft, and Google to rethink their whole pricing approach

There are growing signs that Amazon’s next big cloud battleground is data-egress fees, the notorious fee that cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud charge customers for taking data out of their platforms. Oracle and Cloudflare both escalated the fight over egress fees last week, separately blasting AWS over the practice in an apparent attempt to capitalize on customer frustrations.
Those fees are seen in the industry as serving an important business purpose for the Big Three cloud providers, which generally charge customers nothing, in most cases, to bring data into their clouds.
“That’s just what all the cloud vendors want you to do because they want to have your data quickly,” Databricks CEO Ali Ghodsi recently told Insider. “They’re at war with each other, so they want to have all your data as fast as possible because that data has gravity. And if they don’t get your data, they’re kind of done.”
That’s precisely why the fees exist, some believe: “The whole point of egress fees was to lock up your data and make it hard for you to extract it, move it someplace else,” said Gartner research VP Adam Ronthal.
That kind of cloud “lock-in” has long been a frustration for customers. While Oracle and Cloudflare singled out AWS for their criticism, other cloud providers like Microsoft, Google, and Oracle itself all charge egress fees at various rates (though Oracle insists its fees are among the lowest). And because of the fees’ strategic importance to the providers, they’ve been generally accepted by many customers as just another cost of doing business.
But things are changing in the industry, experts say, as the cloud providers come under pressure to rethink their billing model — including that fee. The past few years have also seen customers begin to embrace trends like multicloud, where companies use more than one cloud provider for their IT infrastructure, and hybrid cloud, where users combine the cloud platforms and their own data centers.
Multicloud is praised for letting customers pick and choose which service they’d like from each provider, while hybrid cloud lets users in highly regulated industries like finance or healthcare keep their data local. Customers are flocking to multicloud in particular, it seems: Gartner’s most recent cloud-buying adoption survey, conducted last year, found that 76% of surveyed companies are using more than one cloud provider.
Even the cloud providers themselves have caught on. Within the past few years, Amazon, Microsoft, and Google have all made moves in recognition of the fact that companies increasingly want to use more than one cloud provider, or a fusion of cloud platforms with their own data centers or a private cloud.
But, crucially, this future hinges on data being able to flow freely in and out of clouds like AWS.


