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Cloud Egress Costs

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Re: Cloud Egress Costs

#41

Post by amluto »

PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

> other than: it makes migrating to competitors cost-prohibitive in a subset of cases

My theory: it forces third party services into the same cloud.

Suppose you use AWS and you want to pay a third party SaaS provider for some service involving moderate-to-large amounts of data. Here’s one of many examples:

https://www.snowflake.com/en/data-cloud/pricing-options/

And look at this remarkable choice: you get to pick AWS, Azure, or GCP! Snowflake is paying a lot of money to host on those clouds, and they’re passing those costs on to customers.

Snowflake is big. They have lots of engineers. They are obviously cloud-agnostic: they already support three clouds. It would surely be much cheaper to operate a physical facility, and they could plausibly offer better performance (because NVMe is amazing), and they could split the cost savings with customers. But they don’t, and my theory is that egress from customers to Snowflake would negate any cost savings, and the variable nature of the costs would scare away customers.

So my theory is that the ways that customers avoid egress fees makes the major clouds a lot of money. IMO regulators should take a very careful look at this, but it’s an excellent business decision on the parts of the clouds.

Re: Cloud Egress Costs

#42

Post by tootie »

cj wrote: post #23

> Cloudflare -- Free Perhaps on self-serve plans with insignificant traffic. On enterprise plans they do set bandwidth caps. Our company exceeded our bandwidth cap and our account rep reached out to reprice our contract. I asked him if turning off Argo (a service billed by bandwidth) would remove the bandwidth overage and they said no. TlDR: Cloudflare bandwidth isn’t free at the enterprise tier.

Their cap is very high though. 1TB/mo would cover a lot of small to mid-size businesses depending on their use case.

Re: Cloud Egress Costs

#43

Post by api »

ozr wrote: post #30
PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

Definitely lucrative enough. The use case you've described isn't particularly uncommon, but lots of companies just pay for the egress. The problem is that there are now multiple generations of software engineers that do not know how bandwidth is priced. They've only used managed providers that charge per unit of ingress/egress, at some fractional dollar per GB.

I’ve had people refuse to believe that bandwidth is actually very cheap and cloud markup is insane (hundreds or even thousands of times cost).

I show them bare metal providers and colo that bills by size of pipe rather than transfer. They refuse to believe it or assume there must be a catch. There usually isn’t, though sometimes the very cheapest skimp on things like rich peering and can be slightly slower or less reliable. But still cheapest is relative here. Expensive bare metal or colo bandwidth is still usually hundreds of times less than big three cloud egress.

It’s just nuts.

It’s a subset of a wider problem of multiple generations of developers being fully brainwashed by “cloud native” in lots of ways. What an amazing racket this all has been for providers…

Re: Cloud Egress Costs

#44

Post by tky »

jonatron wrote: post #18
PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

The AWS Enterprise Discount Program apparently requires $1M per year spend. 180TB is about $13k on AWS so presumably not enough to be interesting to them. Hopefully someone who works at AWS can share some info.

EDP can be great if you can meet their required year over year growth requirement and if your spend is high enough to make the discounts (which are variable and negotiated often at a product offering level, not blanket) offset the required top-shelf support contract. For smaller orgs even at the $1-2M/mo level, it can often be a risk not worth taking vs other cost savings mechanisms and locating high-egress use cases elsewhere.

Egress bandwidth pricing has been the sacred cow money firehose forever, despite transit costs continuing to shrink.

Re: Cloud Egress Costs

#45

Post by kansi »

PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

Are you able to share which provider do they use for their rack setup?

Re: Cloud Egress Costs

#46

Post by amluto »

toast0 wrote: post #25
PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

My feeling is that egress is easily measured, so it's where costs that are hard to assess get moved to. It doesn't feel great to be line item billed for stuff at 10x the rate of credible other offers. I think there is also some geo-specific pricing that gets hidden in a global price; bandwidth can be a lot more expensive in some locations than others and if you are charged 5x for egress in south america, nobody will…

I don’t believe this. Operating an internal cloud network is expensive, but it’s expensive because of internal traffic, and they don’t charge for that internal traffic. Egress is just like traffic to any other system, and AWS doesn’t charge for that.

Also:

> It doesn't feel great to be line item billed for stuff at 10x the rate of credible other offers.

It’s quite a bit worse than 10x

Re: Cloud Egress Costs

#47

Post by Eridrus »

amluto wrote: post #41
PreInternet01 wrote: post #7

The cost of egress traffic is a very good reason for many organizations to not fully migrate to a cloud provider anytime soon. And since, unlike with storage costs, there doesn't seem to be an actual reason (other than: it makes migrating to competitors cost-prohibitive in a subset of cases), that seems kind of... weird? Small example: an actual company I do some work for is in the business of delivering creative ass…

> other than: it makes migrating to competitors cost-prohibitive in a subset of cases My theory: it forces third party services into the same cloud. Suppose you use AWS and you want to pay a third party SaaS provider for some service involving moderate-to-large amounts of data. Here’s one of many examples: https://www.snowflake.com/en/data-cloud/pricing-options/ And look at this remarkable choice: you get to pick AWS…

Snowflake's margins are like 90%+ on top of the compute they sell, and they pass on all these costs including egress directly to customers.

Re: Cloud Egress Costs

#48

Post by jeffbee »

geor9e wrote: post #21

I had no idea it was this crazy expensive. I can host a 1 TB folder of movies on my Google Fiber internet Synology NAS website, and let my friend download it for free. But if I hosted my website on Google Cloud, they bill me $111.60? How are these cloud services getting away with this pricing?

Your little NAS is not directly connected to hundreds of metro areas around the globe. Even on Google Fiber, which is an excellent network, you only have a few dozen points of exchange, all in America. As a Google Cloud customer your egress traffic will be on Google's network all the way to the very edges of the world, at hundreds of interconnect points and exchanges. Your traffic will be on private networks until it is with a few miles of your end user, in all likelihood. This is a comparison between apples and diamonds.

Re: Cloud Egress Costs

#49

Post by [deleted] »

cj wrote: post #23

> Cloudflare -- Free Perhaps on self-serve plans with insignificant traffic. On enterprise plans they do set bandwidth caps. Our company exceeded our bandwidth cap and our account rep reached out to reprice our contract. I asked him if turning off Argo (a service billed by bandwidth) would remove the bandwidth overage and they said no. TlDR: Cloudflare bandwidth isn’t free at the enterprise tier.

[deleted]
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