Google Cloud abolishes data egress fees for global customer base

Google will no longer charge customers fees for transferring their data out of its cloud when switching to a new provider, as part of a concerted push to distance itself from its public cloud competition.

Amit Zavery, general manager, vice-president and head of platform at Google Cloud, announced the move in a blog post, and said it was a show of its commitment to supporting the development of a “thriving cloud ecosystem” that is “open, secure and interoperable”.

“When customers’ business needs evolve, the cloud should be flexible enough to accommodate those changes,” wrote Zavery.

“Starting today, Google Cloud customers who wish to stop using Google Cloud and migrate their data to another provider and/or on-premise can take advantage of free network data transfer to migrate their data out of Google Cloud. This applies to all customers globally.”

Charging customers a fee to move their data out of the cloud is known as a data egress charge and is a common practice among the hyperscale public cloud providers, but also an increasingly controversial one.

This is in the wake of the Ofcom review into the inner workings of UK cloud market, which flagged the charging of egress fees by cloud providers as “unlikely to be necessary for cost recovery” and an example of anti-competitive behaviour.

The reason for this is because it disincentivises the users of public cloud platforms from moving to new providers, with Amazon Web Services (AWS) and Microsoft both known to charge customers for moving their data between different cloud providers.

“Egress fees are a key concern for existing customers because they significantly increase the cost of taking a service from a different cloud provider,” the Ofcom report stated.

“We have heard of examples where customers design their cloud architectures to intentionally avoid and reduce the cost of egress, which means they are unable to benefit from services from rival providers that may better suit their needs.

“This suggests that, for some customers, the cost associated with egress fees are likely to be significant enough to act as a barrier to using multiple suppliers as part of a multicloud strategy.”

It remains to be seen if Google’s actions will inspire other members of the hyperscale cloud community to follow suit by scrapping their egress fee charging schemes too.

However, Zavery went on to say that Google’s decision to do so will not solve the “fundamental issue” that prevents many customers from working with their preferred cloud provider, which is “restrictive and unfair licensing practices”.

While Zavery stopped short of calling out any cloud providers for doing this, Google is known to have voiced concerns in June 2023 in response to the US Federal Trade Commission’s inquiry into Cloud Computing Business Practices about Microsoft’s alleged “unfair” licensing restrictions.

“Certain legacy providers leverage their on-premise software monopolies to create cloud monopolies, using restrictive licensing practices that lock-in customers and warp competition,” continued Zavery.

“The complex web of licensing restrictions includes picking and choosing who their customers can work with and how; charging 5x the cost if customers decide to use certain competitors’ clouds; and limiting interoperability of must-have software with competitors’ cloud infrastructure.

“These and other restrictions have no technical basis and may impose a 300% cost increase to customers. In contrast, the cost for customers to migrate data out of a cloud provider is minimal.”