Google has made a major move in the world of cloud services, announcing that it will no longer charge customers who transfer their data to another cloud provider or an on-premise datacenter. This change is effective immediately, providing relief to customers who were previously subject to additional fees.
Specifically, customers using Google Cloud’s services such as BigQuery, Cloud Bigtable, Cloud SQL, Cloud Storage, Datastore, Filestore, Spanner, and Persistent Disk will now be eligible for free transfers out of Google Cloud. However, in order to take advantage of this, customers must first apply for approval through a form. If approved, they will have 60 days to complete the transfer. If this time frame is not met, a second request must be submitted.
In order to have the data transfer fee waived, a customer must first have their approved data transferred out of Google Cloud and officially terminate their cloud written agreement. Google does reserve the right to audit these transfers for compliance with program terms and conditions.
Google’s decision to eliminate this fee comes after facing criticism from regulators and other public cloud providers regarding egress fees. Egress fees can vary based on a number of factors, including destination, data origin, and data volume. For example, Amazon Web Services charges $0.09 per gigabyte of data for outbound transfers to the public internet, while transferring data between two AWS EC2 instances in different regions incurs a flat fee of $0.02 per gigabyte.
These fees have been particularly burdensome for companies looking to switch to alternative cloud providers. In fact, Apple reportedly paid $50 million in egress fees to AWS in just one year.
According to a survey by IDC, 99% of cloud storage users have faced egress fees averaging 6% of their overall cloud storage costs. Additionally, a separate poll from Global Market Intelligence found that 34% of enterprises have had their use of cloud storage affected by egress fees, causing them to either bring their data back on-premises or switch to a provider that doesn’t charge for egress.
In 2018, Cloudflare launched the Bandwidth Alliance with the goal of reducing or eliminating data egress fees. This alliance includes Google, Alibaba, Microsoft, and Oracle – with the latter two publicly criticizing both Google and AWS for their egress fees. Notably absent from this alliance is Amazon.
Last year, the U.K. Competition and Markets Authority announced an inquiry into egress fees charged by public cloud providers such as AWS and Azure, as well as potential hindrances to cloud interoperability and restrictive software licensing. In response to this inquiry, AWS claimed that they do not charge separate fees for data switching to other cloud providers, and that 90% of their customers do not pay for data transfers.
The European Union’s Data Act may also play a role in the eventual removal of egress fees for all public cloud service providers operating in Europe. The act requires the gradual elimination of switching charges, including egress fees, within the next three years – though there are some exceptions for multi-cloud deals.
In the United States, the Federal Trade Commission has also taken notice of egress fees and other policies and pricing within the domestic cloud market. This includes cloud data egress fees, which the FTC is currently undertaking an inquiry into.
With all of these regulatory challenges and growing competition in the public cloud market, Google has another incentive to stand out and gain more market share. As of August 2023, Google Cloud currently holds just 11% of the global public cloud market, behind Azure at 22% and AWS at 32% according to Statista data.
