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January 11, 2024updated 15 Jan 2024 4:19pm

Google Cloud eliminates data transfer fees

The hyperscale cloud provider is the first to ditch charging users wanting to switch to another competitor.

By Greg Noone

Google Cloud will no longer charge users when they seek to transfer their data to a competitor, the firm has announced. This will apply to all customers globally from today. A blog post announcing the decision also took aim at hyperscaler rivals that have continued to charge such fees, arguing that the practice reduces intra-cloud competition to the detriment of consumers and providers alike. 

“These and other restrictions have no technical basis and may impose a 300% cost increase to customers,” wrote Amit Zavery, Google Cloud’s head of platform. “In contrast, the cost for customers to migrate data out of a cloud provider is minimal.” 

The Google Cloud logo, used to illustrate a story about how the cloud provider has stopped charging users data transfer fees.
Google Cloud has announced its decision to stop charging users data transfer fees, a practice widely considered to encourage vendor lock-in and reduce competition in the UK and global cloud markets. (Photo via Shutterstock)

Data transfer fees encourage vendor lock-in

While providers like Google Cloud, AWS and Microsoft Azure typically do not charge customers when they move data into their clouds, until now it has been commonplace to impose so-called “egress” fees on users when they need to transfer it from one availability zone to another or move their data to a competitor. In many cases, these charges act like a tax on usage and tend to rise over time as a customer’s cloud needs become more complex (Google Cloud has since clarified that it will continue to impose these types of fees on “normal customer activities”.) Egress fees also act as a functional deterrent for users to move from one provider to another, often resulting in vendor lock-in. 

Google Cloud’s head of platform conceded that its elimination of these charges would ultimately make it easier for customers to switch to rival providers if they so chose (though such fees would remain for . However, Zavery also argued that “unfair licensing practices” constituted a greater threat to competition in the market. As such, he wrote, “[W]e will continue to be vocal in our efforts to advocate on behalf of our cloud customers – many of whom raise concerns about legacy providers’ licensing restrictions directly with us.”

Such sniping between hyperscale cloud providers is commonplace. In August 2022, both Google Cloud and AWS criticised Microsoft Azure for imposing additional charges for customers using its software in rival clouds, with the former launching another salvo against Redmond in June 2023. Last month, meanwhile, Microsoft Azure hit back at AWS, stating that the former did not possess the latter’s “incumbent market advantage”.

Regulators alert to anti-competitive cloud practices

Today’s statement from Google Cloud’s Zavery did not mention the inclusion of the firm in UK media regulator Ofcom’s investigation into anti-competitive market practices in the British cloud market. While the watchdog’s eventual report on the subject examined alleged anti-competitive practices at length, including restrictive licensing conditions and egress fees, it also said Google Cloud engaged in the practice of providing generous allotments of free credits to new customers – often at scales that smaller competitors have told Tech Monitor they cannot match. The Competition & Markets Authority has since launched its investigation into the UK cloud market on Ofcom’s recommendation. 

Nevertheless, the provider’s decision to stop charging egress fees should be welcomed as a positive step forward for the UK cloud market, says ex-commercial director for UK Cloud Nicky Stewart. The move “shows that Google is committed to interoperability and flexibility in the cloud market”, she argues, and is one that will “drive new business towards Google as consumers become increasingly aware of and concerned about cloud vendor lock-in”.

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In isolation, however, Stewart believes that the announcement will not help those customers “trapped” on rival cloud platforms that no longer suit their needs for fear of being charged egress fees or violating the terms and conditions of their commercial agreements – a fact, she adds, that will not change until the ability of cloud providers to impose restricting software licensing conditions is curtailed. “Until that changes,” she says, “nothing really changes.”

Read more: Public cloud market 2023: AI drives growth for hyperscalers

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