The second-largest hyperscaler is the last to act, after Google Cloud and AWS, on pressure from regulators and customer perceptions.

Kelly Teal, Contributing Editor

March 14, 2024

3 Min Read
Azure cuts egrees fees

Microsoft just removed certain Azure egress fees, making it the last hyperscaler to do so in recent weeks.

The company announced its move on March 13.  Google Cloud started the trend in January, with

Amazon Web Services following suit in early March. That left observers wondering when Microsoft would undo Azure egress fees, or the often-exorbitant costs organizations pay to move their data off of a cloud provider’s platform. The answer came late Wednesday.

“We support customer choice, including the choice to migrate your data away from Azure,” Microsoft wrote in a short blog. “Azure now offers free egress for customers leaving Azure when taking their data out of the Azure infrastructure via the internet to switch to another cloud provider or an on-premises data center.”

While egress fees have created consternation among end users who didn’t know to expect them when migrating data, the hyperscalers had no incentive to regulate or do away with those fees. They made the vendors a lot of money. The motivation to control egress fees came when the European Union introduced its Data Act, mandating that cloud providers axe lock-in practices by 2025. 

Google Cloud was the first to respond to the EU’s directives, positioning its decision as being in the best interest of customers. AWS made similar proclamations. 

Now, too, Microsoft, is taking away some egress fees — not just in Europe, but in its other world regions as well. And the company, like AWS, noted that it already offered the first 100 gigabytes per month of “egressed data” for free to all customers.

Restrictions Around Free Azure Egress

Notably, though, Microsoft’s underlying terms and conditions around Azure egress fees come with some pretty strict terms, just as they do at Google Cloud. AWS appears to have the loosest requirements associated with the removal of its egress fees and any ensuing cloud migration. 

For example, Azure said its free egress only applies to data transfer out through the internet, not through special services such as ExpressRoute. In other words, only customers moving data out of Azure Storage are eligible to do so at no extra charge. Plus, customers have to agree to cancel all of their Azure subscriptions to qualify for free egress. That is highly unlikely to happen, given that 95% of the Fortune 500 alone uses Azure in some form or another.

Microsoft said its exemption policy “aligns with the European Data Act.”

Similarly, Google Cloud requires account termination and limits free egress to specific services including BigQuery, Cloud SQL, Spanner and others.

Customers of both Microsoft Azure and Google Cloud must provide advance notice of their intent to migrate off those platforms, and do so within 60 days.

What Does Egress-Fee Removal Really Accomplish?

It’s important to point out that egress fees represent just one aspect of a cloud migration. In fact, a total shift from one cloud to another is, at best, rare, due to the ubiquity of multicloud environments, and, at worst, a years-long technical and financial nightmare. The likelihood of thousands of organizations undergoing widespread, complete cloud migrations due to the removal of some egress fees is minute. 

Thus, while abolishing egress fees above the free thresholds looks like a win for end users, many observers agree it’s really a PR move amid the pressure to comply with EU regulations and to avoid further investigations from the likes of the UK’s Ofcom.

Ari Weil, strategic marketing and product leader at Akamai, which bought independent cloud computing provider Linode in 2022, and which competes against the hyperscalers, is one of those observers.

“Regarding day-to-day egress policies more generally, Microsoft, AWS and Google are not changing their approaches much,” Weil told Channel Futures. “Anything that runs the meter for compute, storage or network fees is still core to how hyperscalers monetize the use of their platforms. In that way, egress still represents a significant source of runaway cloud costs that are difficult to budget for at the start of a project, and that compound as more data, users and services leverage cloud infrastructure.”

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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