If it's expensive to move data out of AWS, it's not just about making it hard for customers to leave AWS. It means that any third-party service that wants to sell to AWS customers must also use AWS.
For example, Snowflake can't really run its own data centers. They need to rent from AWS. If you're a company on AWS, you won't want to spend $0.08/GB sending things to Snowflake.
The high egress cost gives Amazon a lot of power to keep the third-party ecosystem within AWS and without as much negotiating power on things like EC2 costs. Snowflake can't say to Amazon, "if you don't give us a great discount, we're going to move our operations to DigitalOcean" because Amazon would just say, "no you're not. Your customers aren't going to pay $80/TB to load things into Snowflake when you're charging them $23-40/TB for storage. They'd be paying 2-3.5x your storage costs just to load the data into your system!" Yes, I'm sure that Snowflake does get a discount from AWS, but having less negotiating power can make discounts smaller.
There are other reasons to want a third party to use AWS if you're on AWS. Still, the egress pricing seems to make it very hard for third-party tech providers not to use AWS if their customers are using it.
This to me makes it unlikely that AWS will change their bandwidth pricing. If it was just about this revenue source disappearing, they might bite the bullet and hope that the lower prices would attract more customers in the long term. But bandwidth pricing is the moat around their castle. If it didn’t exist, Snowflake and others would leave. But more than that, new AWS services benefit from the captive audience choosing them by default. Without the moat, each service has to compete on its merits. AWS Lambda, for example would need to be better than CloudFlare Workers or fly.io containers. It won’t win customers like it does today just because it’s “free” bandwidth.
Removing these fees is a risk AWS is currently choosing not to take. And they won’t change their pricing regardless of the number of blog posts that competitors write. The only thing that would force a change is an exodus of customers leaving AWS citing this as a reason.
I am wondering if Amazon could introduce a bandwidth cost rebate, where the bandwidth cost would be subtracted from your final bill at a maximum of 30% of your total VM bill.
But it is like Apple, once you have a monopoly like market they just dont need to. Amazon is buying as many TSMC capacity as they could as demand for Graviton 2 is way above their projected expectation. It seems they are still growing at such a pace despite their size.
It's interesting how AWS uses egress to this effect. Your comment is very insightful.
Most proprietary vendors do various tactics under this to retain customers via lockin, versus actually good products.
Software file formats serve the same for proprietary software.
"Cloud" vendors provide easy API services that have no analog to on-prem, so that migrations are painful. And the Great Egress is a painful problem with AWS.
Roach motel indeed. They check in, and they don't check out.
This is true. But just as true as "cloud vendors provide easy API services which provide value over on-prem options that companies pay for". Whether you see it as positive or negative depends on how much value you get from the service.
Apart from CloudFront and Lambda@Edge, Cloudflare has offerings that compete with Lambda (Workers Unlimited), Web Application Firewall, AWS Elemental (Stream), and (app/network) load balancers (Argo, Spectrum, Magic Transit). Check out Cloudflare's bandwidth / usage pricing for some of those, and it isn't much different than AWS.
Cloudflare, I'd predict, will eventually arrive at a similar pricing model for its IaaS outside of the Bandwidth Alliance (which, ironically, is Hotel California with select though multiple providers at play).
Oh yeah, and it comes with a KV store capable of storing data across requests. It's awesome.
This keeps both parties locked into the AWS ecosystem.