This week Corey is at the helm for a small rant on AWS’s data transfer story. He reflects on CloudFlare’s blogpost from earlier this year on how AWS charges, and their egregious mark ups. Corey dives into the findings to bring out some important details about what exactly is still going on when it comes to the indefatigable nature of those charges.
Markups as high as %8000 percent, the benefits of running AWS services yourself or from something a partner provides for you from the AWS marketplace, the predatory nature of some of these charges, and more! Thanks for tuning in to Corey’s rant!
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Corey: Hi there. Chief Cloud Economist Corey Quinn from the Duckbill Group here to more or less rant for a minute about something it’s been annoying the heck out of me for a while, as anyone who follows me on Twitter or subscribes to the lastweekinaws.com
newsletter, or passes me in a crowded elevator will attest to, and that is AWS’s data transfer story.
Back on July 23rd—of 2021, for those listening to this in future years—CloudFlare did a blog post titled AWS’s Egregious Egress
, and that was co-authored by Matthew Prince—CloudFlare’s CEO—and Nitin Rao—who is one of their employees. Presumably. That was somewhat unclear—and it effectively tears down the obnoxious—and I mean deeply obnoxious—level of AWS data transfer pricing for egress to the outside world.
And there’s a bunch of things to unpack in this blog post, where they wind up comparing AWS pricing to the wholesale bandwidth market. And they go into a whole depth for those who aren’t aware of how bandwidth is generally charged for. And the markups that they come up with for AWS are, in many cases, almost 8,000%, which is just ludicrous, in some respects, because—spoiler—every year, give or take, the wholesale cost of network bandwidth winds up dropping by about 10%, give or take. And the math that they’ve done that I’m too lazy to check, says that in effect, given that they don’t tend to reduce egress bandwidth pricing, basically ever, while the wholesale market has dropped 93%, what we pay AWS hasn’t. And that’s obnoxious.
They also talk—rather extensively—about how ingress is generally free. Now, there’s a whole list of reasons that this could be true, but let’s face it, when you’re viewing bandwidth into AWS as being free, you start to think of it that way of, “Oh, it’s bandwidth, how expensive could it possibly be?” But when you see data coming out and it charges you through the nose, you start to think that it’s purely predatory. So, it already starts off with customers not feeling super great about this. Then diving into it, of course; they’re pushing for the whole bandwidth alliance that CloudFlare spun up, and good for them; that’s great.
They have a bunch of other providers willing to play games with them and partner. Cool, I get it. It’s a sales pitch. They’re trying to more or less bully Amazon into doing the right thing here, in some ways. Great, not my actual point.
My problem is that it’s not just that data transfer is expensive in AWS land, but it’s also inscrutable because, ignoring for a second what it costs to send things to the outside world, it’s more obnoxious trying to figure out what it costs to send things inside of AWS. It ranges anywhere from free to very much not free. If you have a private subnet that’s talking to something in the public subnet that needs to go through a managed NAT gateway, whatever your transfer price is going to be has four and a half cents per gigabyte added on to it with no price breaks for volume. So, it’s very easy to wind up accidentally having some horrifyingly expensive bills for these things and not being super clear as to why. It’s very challenging to look at this and not come away with the conclusion that someone at the table is the sucker.
And, as anyone who plays poker is able to tell you, if you can’t spot the sucker, it’s you. Further—and this is the part that I wish more people paid attention to—if I’m running an AWS managed service—maybe RDS, maybe DynamoDB, maybe ElastiCache, maybe Elasticsearch—none of these things are necessarily going to be best-to-breed for the solution I’m looking at, but their replication traffic between AZs in the same region is baked into the price and you don’t pay a per-gigabyte fee for this. If you want to run something else, either run it yourself on top of EC2 instances or grab something from the AWS marketplace that a partner has provided to you. There is no pattern in which that cross-AZ replication traffic is free; you pay for every gigabyte, generally two cents a gigabyte, but that can increase significantly in some places.
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Corey: It feels predatory, it feels anti-competitive, and you look at this and you can’t shake the feeling that somehow their network group is being evaluated on how much profit it can turn, as opposed to being the connective tissue that makes all the rest of their services work. Whenever I wind up finding someone who has an outsized data transfer bill when I’m doing the deep-dive analysis on what they have in their accounts, and I talk to them about this, they come away feeling, on some level, ripped off, and they’re not wrong. Now, if you take a look at other providers—like Oracle Cloud is a great example of this—their retail rate is about 10% of what AWS’s for the same level of traffic. In other words, get a 90% discount without signing any contract and just sign the dotted line and go with Oracle Cloud. Look, if what you’re doing is bandwidth-centric, it’s hard to turn your nose up at that, especially if you start kicking the tires and like what you see over there.
This is the Achilles heel of what happens in the world of AWS. Now, I know I’m going to wind up getting letters about this because I always tend to whenever I rant about this that no one at any significant scale is paying retail rate for AWS bandwidth. Right, but that’s sort of the point because when I’m sitting here doing back-of-the-envelope calculations on starting something new and that thing tends to be fairly heavy on data transfer—like video streaming—and I look at the retail published rates, it doesn’t matter what the discount is going to be because I’m still trying to figure out if this thing has any baseline level of viability, and I run the numbers and realize, wow, 95% of my AWS bill is going to be data transfer. Well, I guess my answer is not AWS. That’s not a pure hypothetical.
I was speaking to someone years ago, and they have raised many tens of millions of dollars for their company since, and it’s not on AWS because it can’t be given their public pricing. Look, this is not me trying to beat up unnecessarily on AWS. I’m beating them up on something that frankly, has been where it is for far too long and needs to be addressed. This is not customer obsession; this is not earning trust; this is not in any meaningful way aligned with where customers are and the problems customers are trying to solve. In many cases, customers are going to be better served by keeping two copies of the data, one in each availability zone rather than trying to replicate back and forth between them because that’s what the economics dictate.
That’s ludicrous. It should never be that way. But here we are. And here I am. I’m Chief Cloud Economist Corey Quinn here at the Duckbill Group. Thank you for listening to my rant about AWS data transfer pricing.
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