It Might Be Easier To Switch Clouds
Amazon, Microsoft, and Google are the big three cloud providers. In recent months, they have lowered their transit fees, which are like taxes that customers have to pay to move their data to another provider. To keep current users coming back, this is an attempt, but it’s not very friendly and doesn’t really build trust.
These companies are starting to see the error of their ways by lowering these fees, though there are a lot of caveats and some problems. This is because of things like the truth of a multi-cloud world, stricter regulations, and customer backlash. You can only move certain types of data, and to get your own data out of the cloud, you have to call the vendor and make a request for each type. But at least it’s a start.
John Dinsdale, chief analyst and managing director at Synergy Research, a company that tracks the cloud infrastructure market, says that this change of heart is really an admission that the market is changing. “This seems like a natural step for the market to take.” He told TechCrunch, “As real competition heats up, it wouldn’t help cloud providers to be seen as being too protective.”
“The best way to run a business is to give customers what they want.” He said, “In the last few years, companies that have stuck to old ways of doing things have not done well in the IT world.”
Jake Graham, CEO and co-founder of Bobsled, a company that helps people move data between clouds, says it’s clear that we’re moving into a world with multiple clouds and it’s more important than ever to make moving data easy. In this case, his job puts him in the lead.
“Back in the day, the three biggest cloud providers were in a fierce battle to create what felt like walled gardens. As long as you built on top of them, everything was fine.” “But it was really hard to get across them,” Graham said. “Their enterprise customers are starting to push back hard, saying that there is no way in the world that a global enterprise wouldn’t use more than one platform.” He says that these fees make it very hard to move data, which makes it hard to share with customers and even within different departments of the same business.
Rudina Seseri, founder and managing partner at Glasswing Ventures, says that the change is sometimes caused by rules, but not always. “On a high level, this emergence of regulation is a pretty simple way to explain why behaviour changed so quickly,” she said. But I also think it’s important to talk about how it looks to change the language ahead of time and how Google has used it as a marketing tool against Azure. If these companies think that egress fees will go away eventually, then Google has the upper hand when it comes to marketing itself as the “less restrictive” cloud and getting early-stage users, she said.
“To use a figure of speech, the market is moving away from the stick and back towards the carrot.” “Now that egress fees are being phased out, companies that want to keep cloud customers who want to switch providers will need to come up with new and easy-to-use features,” Seseri said.
Expert in the cloud for many years, David Linthicum, says that the recent news are good for PR, but people should carefully look over their bills because egress fees aren’t the only problem. “This is a pleasant surprise, but it might not be important.” Linthicum told TechCrunch that customers need to look at the prices as a whole. We want to know how much we’re paying for the things we use. What are we paying for the networking fees, the egress fees, and all the other secret fees that come with what some people call “junk fees” from cloud providers?
But this might not have as much of an effect on companies as it does on bigger businesses. Seseri said, “There are more moving parts in a cloud ecosystem than just storage. For example, services needed for scaling and security are also moving parts. Also, the biggest companies have built tight infrastructures that can be hard to unwind.” It will definitely get better for startups, though, since service providers need to focus more on new features and happy customers to keep them coming back.
Graham’s main job is to help people move data, and these fees are changing the way he does business. He thinks that the recent changes are a small but important step forward. However, he also sees a future where it gets harder to tell the difference between an exit fee and something else, which could mean that these fees are no longer needed in the future.
This is because moving takes a long time. You can’t just say, “I used to work for AWS and now I work for GCP.” Data sources that need to talk to each other are in both clouds for a while during the long process that lasts years. But, he says, the original cloud provider is trying very hard to convince the customer to change their mind and return. It’s a tough situation for both of them.
This fight will only happen between two teams: one that wants to win back the customer and make them happy, and the other that says, “Wait a minute, we already lost this customer.” They should be charged for everything. Why do we treat them better than others?”
In this age of AI, data is becoming more valuable, so being able to move data and use it is becoming more important for everyone. It will be better for cloud providers to get ahead of this trend than to put up barriers that make it harder to move data. This could be the start of something much bigger.
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