Analysts have praised AWS's decision to waive exit fees for customers as a positive step for the industry, but questions remain over whether Microsoft will do the same.
The hyperscaler revealed this week that customers will no longer be forced to pay data transfer fees to move their data to another cloud provider or an on-premises storage solution.
AWS already offered 100GB per month of free data transfers from its servers, but will now allow unrestricted data transfers as standard.
The announcement makes AWS the second of the three major Western hyperscalers to eliminate egress fees for data transfers, after Google announced it would stop the practice in January.
The driving force behind these measures is a new regulatory framework introduced by the European Union (EU), the European Data Law, which seeks to improve competition between cloud companies and eradicate dependence on cloud providers.
The UK government is also exploring how it can promote a more open market, with the Competition and Markets Authority (CMA) launching a research on cloud industry competition in October 2023.
Jamil Ahmed, distinguished engineer at data platform Solace, said the announcement is a positive step towards an interoperable future, ending the previous “walled garden” approach.
“AWS's recent announcement that it will eliminate egress fees for data transfers to other cloud providers is a positive step towards open cloud ecosystems, which aligns perfectly with EU and UK regulations driving a greater interoperability,” Ahmed explained.
“These regulations demonstrate a commitment to empowering businesses in their digital transformation, specifically by breaking down barriers between cloud providers. Previously, enterprises had a “walled garden” approach with limited flexibility and visibility, but now they can migrate between clouds and adopt multi-cloud architectures much more easily.”
European companies' appetite for a more interoperable industrial landscape was highlighted in recent research from Wasabi Technologies, which found that EMEA respondents were increasingly disillusioned with supplier lock-in.
Many, the study noted, are increasingly adopting a multi-cloud strategy in which they rely on services from multiple providers, but long-standing practices, such as egress fees, were identified as a major impediment to this approach.
AWS move comes at a crucial time in the cloud industry
speaking to ITProSid Nag, vice president analyst at Gartner, also praised the AWS announcement as a positive step for the industry, noting that the move comes amid a period of intense focus on the adoption of generative AI, which is prompting a rethink. of data strategies in companies worldwide.
“This is a good development for the cloud industry and the cloud buyer community. “Especially in light of the need for federated data for workloads like generation AI.”
Nag said a key issue facing companies looking to leverage generative AI lies in the barriers between different cloud providers.
“Gen AI implementations are based on different large language models that are hosted within each of these cloud providers' assets. There is no easy way to federate these different large linguistic models that are found within these heritages,” he explained.
“One of the things that is really going to matter when we start federating is data. Data has to move, right? so i think [AWS’ move] It's something good”.
How will Microsoft respond?
Discussing the motivation behind AWS's decision to waive its exit fees, Nag stated that it most likely coincides with Google's initial move. However, he suggested that Google's earlier announcement was deliberately intended to put pressure on Microsoft, citing language used in the blog announcing the decision.
In the blog, Google described a case where a 'legacy' cloud provider has locked its customers in with “punitive licensing practices.”
“The ulterior motive was actually to put pressure on Microsoft, so Microsoft charges these punitive fees – Google claimed – for running its applications in foreign clouds. So there are some licensing issues that Google was trying to highlight in the Microsoft case.”
Microsoft has not yet made a public announcement about its position on exit fees, but this latest development could force it to act, Nag suggested. However, there are unique considerations at play for Microsoft, such as licensing issues.
This could prove problematic for Microsoft given the way its cloud services and solutions are structured.
“I think Microsoft has a different challenge because they will have to (a) respond to the data output part, but how are they going to respond to the licensing part from an application portability perspective… which today is a different licensing structure …? Do they now eliminate licensing fees? “I think it is a difficult task.”
