Tech News : Google Waives Exit Fees for Cloud Data Transfers

Google has announced that Google Cloud customers who want to switch and migrate their network data to another cloud provider and/or on-premises will no longer be charged a transfer fee to do so.

How? 

The process for the free transfer away from Google involves contacting the Google Cloud account team (if one has been assigned), and completing and submitting an online form, after which there is a 60-day window for the user to transfer the data before terminating their Google Cloud agreement.

Who and When? 

The Google Cloud Exit free data transfers are available to Premium Tier Network Service Tier customers globally. Google says the change is effective immediately.

Why? 

As many tech commentators have noted, the charging of egress fees by cloud providers, such as Google, has come in for criticism by regulators, other public cloud providers, and customers. Egress fees, a lucrative source of revenue, are charges that cloud service providers impose when data is transferred out of their cloud infrastructure to another location, such as to a different cloud provider or to an on-premises data-centre. These fees can vary based on the amount of data being transferred, the destination of the data, and the specific policies of the cloud provider. Cloud providers claim that the purpose of egress fees is to cover the costs associated with data transfer and bandwidth usage.

Waiving the fees is therefore a way for Google to gain an advantage over competitors like Amazon (AWS) and Microsoft and put pressure on them in the highly competitive cloud market, and to escape further regulator criticism.

Swipe At Competitors 

In its announcement about stopping the fees, Google also took a swipe at its cloud provider competitors saying that the main issue stopping customers from working with their preferred cloud provider in the first place is “restrictive and unfair licensing practices.” Google explained that “Certain legacy providers leverage their on-premises software monopolies to create cloud monopolies, using restrictive licensing practices that lock in customers and warp competition.”  

Google gave examples of this among its competitors, highlighting how some may be using licensing restrictions to pick and choose their customers, charge then “5x the cost” if they want to use other competitors’ cloud, and “limiting interoperability of must-have software with competitors’ cloud infrastructure”.  It also claims that “these and other restrictions have no technical basis and may impose a 300% cost increase to customers”, and that, in contrast, “the cost for customers to migrate data out of a cloud provider is minimal.” 

What Does This Mean For Your Business? 

Egress fees (and licensing restrictions) are a major source of pain for many businesses that would like to switch their cloud provider. For example, a Global Market Intelligence report showed that more than a third of enterprises said that their use of cloud storage had been affected by egress fees, i.e. leading to them repatriating data on-premises or shifting to a provider who doesn’t charge for egress. Google’s move to waive egress fees will likely make it easier for enterprise cloud customers to switch and save themselves significant costs (egress fees can make up 6 per cent of cloud storage costs – IDC).

For Google, not charging egress fees and casting themselves as the ‘good guys’ who believe that “When customers’ business needs evolve, the cloud should be flexible enough to accommodate those changes,” the move could give them a competitive advantage and enable them to pick up users from other cloud providers. However, the move may put pressure on other providers to also stop or reduce their fees, making Google’s advantage temporary. In fact, it’s been reported that AWS claims that since 2021, over 90% of its customers haven’t been paying to transfer data out. Also, it could be the case that Google is simply preempting inevitable and impending regulations, such as the European Data Act which will require cloud providers to share certain data and lead to providers deciding to only charge cost for transfers anyway.