High Egress Fees

Debates over the benefits and drawbacks of walled gardens versus open ecosystems have carried on since the beginnings of the tech industry. As applied to the Internet, we don’t think there’s much to debate. There’s a reason why it’s easier today than ever before to start a company online: open standards. They’ve encouraged a flourishing of technical innovation, made the Internet faster and safer, and easier and less expensive for anyone to have an Internet presence.

Of course, not everyone likes competition. Breaking open standards — with proprietary ones — is a common way to stop competition. In the cloud industry, a more subtle way to gain power over customers and lock them in has emerged. Something that isn’t obvious at the start: high egress fees.

You probably won’t notice them when you embark on your cloud journey. And if you need to bring data into your environment, there’s no data charge. But say you want to get that data out? Or go multi-cloud, and work with another cloud provider who is best-in-class? That’s when the charges start rolling in.

To make matters worse, as the number and diversity of applications in your IT stack increases, the lock-in power of egress fees increases as well. As more data needs to travel between more applications across clouds and there is more data to move to a newer, better cloud service, the egress tax increases, further locking you in. You lose the ability to choose best-of-breed services or to negotiate prices with your provider.

Why We Launched The Bandwidth Alliance

This is not a better Internet. So wherever we can, we're on the lookout for ways to prevent this from happening — in this case, with our Bandwidth Alliance partners. We launched the Bandwidth Alliance in late 2018 with over fifteen cloud providers who also believe in an open Internet where data can flow freely. In short, partners in the Bandwidth Alliance have agreed to reduce egress fees for data transfer — either in their entirety or at a steep discount.

How did we do this — the power of Cloudflare’s network

Say you're hosted in a facility in Ashburn, Virginia and a user visits your service from Sydney, Australia. There is a cost to moving the data between the two places. In this example, a cloud provider would use their own global backbone to carry the traffic across the United States and then across the Pacific, eventually handing it off to the users’ ISP. Someone has to maintain the infrastructure that hauls that traffic more than 9,000 miles from Ashburn to Sydney.

Cloudflare has more than 206 data centers globally in almost every major city. Our network automatically receives traffic at whatever data center is nearest to the user and then carries it to the data center closest to where the origin is hosted.

As part of the Bandwidth Alliance, this traffic is then delivered to the partner data center via private network interconnects (PNI) or peered connections. These PNIs typically occur within the same facility through a fiber optic cable between routers, or via a dedicated connection between two facilities at a very low cost. Unlike when there's a transit provider in between, there's no middleman, so neither Cloudflare nor our partners bear incremental costs for transferring the data over this PNI.

Cloudflare is one of the most interconnected networks in the world, peering with over 9,500 networks globally, including major ISPs, cloud providers, and enterprises. Cloudflare is connected with partners in many global regions via Private Interconnections, Internet exchanges with private peering, and via public peering.

Customer benefit

Since its inception, the Bandwidth Alliance program has provided many customers significant benefits: both in egress cost savings and more importantly, in choice across their needs of compute, storage, and other services. Providing this choice and preventing vendor lock-in has allowed our customers to choose the right product for their use case while benefiting from significant savings.

We looked at a sample set of our customers benefiting from the Bandwidth Alliance and estimated their egress savings based on the amount of data (GB) flowing from the origin to us. We estimated the potential savings using the \$0.08/GB retail price vs. the discounted \$0.04/GB for large amounts of data transferred. Of course, customers could save more by using one of our partners with whom the cost is $0/GB. We compared the savings to the amount of money these customers spend on us. These savings are in the range of 7.5% to 27% or, in other words, for every \$1 spent on Cloudflare customers are saving up to \$0.27 — that is a no-brainer offer to take advantage of.

The Bandwidth Alliance also offers customers the option to choose a cloud that meets their price and feature requirements. For a media delivery use case, choosing the best storage provider and Cloudflare has allowed one customer to save up to 85% in storage costs. Another customer who went with a best-of-breed solution across storage and the Cloudflare global network reduced their overall cloud bill by 50%. Customers appreciate these benefits of choice:

“We were looking at moving our data from one storage provider to another, and it was a total no-brainer to use a service that was part of the Bandwidth Alliance. It really makes sense for anyone looking at any cloud service, especially one that’s pushing a lot of traffic.” — James Ross, Co-founder/CTO, Nodecraft

Earlier this month we made it even easier for our joint customers with Microsoft Azure to realize the benefits of discounted egress to Cloudflare with Microsoft Azure’s Data Transfer Routing Preference. With a few clicks on the Azure dashboard, Cloudflare customer egress bills will automatically be discounted. It’s been exciting to hear positive customer feedback:

"Before taking advantage of the Routing Preference by Azure via Cloudflare, Egress fees were one of the key reasons that restricted us from having more multi-cloud solutions since it can be high and unpredictable at times as the traffic scales. Enabling Routing Preference on the Azure dashboard was quick and easy. It was a one-and-done effort, and we get discounted Egress rates on every Azure bill.”  — Darin MacRae, Chief Architect / Cloud Computing, MyRadar.com

If you’re looking to find the right set of cloud storage, networking and security solutions to meet your needs, consider the Bandwidth Alliance as an alternative to being locked-in to a single platform. We hope it helps.