Ask any group of enterprise IT managers why they migrated to the cloud and most of them – if not all – will cite cost-savings. The cloud represents a new standard for enterprise applications, with Forbes reporting that 70% of all organizations have at least one app in the cloud as of late 2016. 90% of all organizations today are plan on running apps in the next few years.
The picture is clear: clouds save businesses money. However, although the cost-savings may be readily apparent when comparing cloud services to on-premises infrastructure, how do cloud providers match up with one another? What should customers look out for beyond the standard monthly subscription price?
Introducing Egress Fees
Most cloud service providers discriminate between various types of data transfer. Just like an international call costs more than a domestic one, so too does transferring data from your cloud to some far-off external destination. The fees for transferring data outside your cloud network are called data egress fees.
Data egress is the opposite of data ingress – transferring data from within your cloud to a destination also within your cloud – and most providers don't charge for ingress, but place a premium on egress.
For example, Google charges $.12 per GB for the first terabyte of data egress towards most destinations outside its servers. Amazon charges $.09 per GB for the first 10 TB of data egress. It's easy to see that any business relying on large transfers of data can quickly find itself overwhelmed with fees.
Data Egress Cost Examples
Let's say your business needs to regularly transfer about 30 TB of data to an outside source – a partner company or consultancy that isn't part of your existing cloud network. Assuming the data destination is domestic, you're looking at around $2500 per month in extra fees from most cloud service providers.
If you're moving your data from a cloud server to a destination in a country like China, however, this price can inflate to anywhere between $4500 and $6000. Multiply that by twelve and you arrive at an annual cost similar to hiring a full-time senior employee.
Cloud Egress and Cloud Lock-In
Even if your company does not send multiple terabytes of data to external sources on a regular basis, you could still be affected by cloud egress fees. One of the most striking examples is when you try to switch cloud service providers, or withdraw from your current agreement in order to implement a hybrid cloud solutions.
In this case, you'll be liable for paying data egress fees for any and all data you wish to extract from your existing cloud infrastructure. This cost is added to whatever termination or cancellation costs you may also incur as a result of abandoning your cloud contract.
This means that data egress fees also pay a part in cloud lock-in – being "trapped" in with a particular cloud hosting service and being unable to easily switch if things don't go as planned. Cloud lock-in is the reason why 78% of IT decision makers avoid maximizing their use of cloud resources.
Enterprises have come up with various ways to compensate their concerns regarding cloud lock-in, most of which center around some kind of hybrid strategy. This can either take the form of a hybrid public/private cloud, or subscribing to more than one cloud solution at the same time, providing an "escape window" should the company wish to switch.
Unfortunately, these hybrid solutions still suffer from the data egress fee structure since migrating your data from one cloud provider to another is essentially the same (from their point of view) as migrating it to any other server on the Internet. This, combined with the possibility of bandwidth limitations, can make cloud migration a discouraging challenge.
Solutions to the Data Egress and Cloud Lock-in Problem
Some organizations have found other ways around data egress fee structures – particularly when dealing with data migration:
- The Low-Tech Disk Ship – One effective, surprisingly low-tech method for effectuating large data transfers is actually shipping a physical disk with all of your data on it. When compared to the costs of sending large volumes of data across the Internet, this can be a very attractive, cost-effective solution to one-time data migrations. The data can be powerfully encrypted, stored on a robust disk, and shipped through one-day air all for a fraction of the price that cloud providers would charge for data egress.
- Central IT Templatization – Some enterprises leverage their on-premises IT assets to create easy-to-migrate templates for their business units. Templatization essentially describes the creation of pre-formulated service catalogs that a central IT team integrates with an IaaS service provider using highly compatible management standards. This means that instead of migrating all of your data and toolsets to the new cloud provider, you need only configure a JSON file and build cloud resources that are compatible with any vendor on the market.
- Free Data Egress – While the largest cloud service providers charge steep rates for egress, not all providers have followed suit. Finding a cloud provider that does not charge for data egress is one way to minimize both the costs of cloud hosting and the risk of cloud lock-in. Under this type of agreement, you can freely move your data from server-to-destination across the Internet without fear of exposing yourself to unexpected fees.
You know your IT environment best, so you know which of these options suits your needs best. Whether you're dealing with a one-time need for fast massive data transfer from a major cloud provider (try the disk ship) or searching for a sustainable, cost-effective cloud solution that lets you share large amounts of data with partners constantly (find a free data egress provider), the solution is out there.