Amazon Web Services Lowers Outbound Costs After Oracle Criticizes

  • Amazon Web Services just announced a reduction in data transfer costs for customers.
  • The cloud giant was recently attacked by Oracle and Cloudflare for its “artificially high” fees.
  • But some analysts are skeptical, calling the cut “a good publicity move” with little actual impact.

On Wednesday, cloud giant Amazon Web Services made a small but significant change to its pricing structure.

Notably, it has eliminated the cost of pulling up to 100 gigabytes of data from the cloud each month, which equates to a free terabyte of data per month to pull data from its CloudFront product. The change goes into effect on December 1 and will affect what AWS says in a blog post, “millions” of customers around the world.

That means AWS customers, with the exception of those using the government cloud and in China, won’t have to pay to move their data out of Amazon’s cloud platform until they hit those limits. An AWS spokesperson told Insider the move is part of a “long tradition” of lowering prices.

The change comes as AWS gears up for its annual re:Invent conference, to be held next week in Las Vegas, and after months of mud-slinging its competitors Oracle and $63.5 billion Cloudflare. Both companies had separately targeted those data transfer charges — often referred to as outbound charges in the industry — arguing that the amount Amazon charged customers for those fees was “hostile” and “artificially high.” The two companies have also recently teamed up to reduce data transfer costs for their mutual customers.

Matthew Prince, the CEO of Cloudflare, tweeted On Wednesday, Amazon’s announcement was “great news for our mutual customers” and “the next step toward the inevitable end of cloud exit.” Oracle has not responded to a request for comment at the time of publishing.

Now it appears that AWS is aware of, or at least responding to, pressure from competitors and customers, said Larry Carvalho, an analyst at RobustCloud. “Customers say, ‘Hey, why are we paying so much? Everyone is charging less,’ he said.

Gartner analyst Adam Ronthal agreed there has been pressure on the Big Three cloud providers to change their outbound pricing, but hasn’t reached a tipping point where they’ll eliminate it altogether.

Indeed, customers have long been frustrated with the disconnect between paying nothing to upload data to cloud platforms, coupled with the shock of seeing how much it costs to get it out again. They have also increasingly pushed back the cloud giants’ pricing models and demanded more price transparency as their cloud bills rise.

Analysts also said Amazon’s data transfer change was good news for startups and developers testing their applications, but wouldn’t make a significant difference to larger customers whose needs are likely to exceed the limits of the free plan.

And compared to what competitors like Oracle Cloud are offering in terms of free data transfer, which is ten terabytes, Ronthal said the real impact of AWS’s change is smaller than it looks and more like “a good publicity move.”

“Amazon can come out and say, ‘Look, we’ve expanded a hundred times for going out regions,'” he said. “But if you look at the actual numbers involved, they went from one gigabyte to a hundred gigabytes , and that’s pretty small.”

Still, Ronthal noted that this isn’t the first time AWS has cut its prices, calling Wednesday’s change “a small step, but it’s definitely a step in the right direction.”

“People who feel good about their cost savings will make millions of customers feel great,” said Carvalho.

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