AWS price reduction for data transfers out to the internet | Hacker News Reader

AWS price reduction for data transfers out to the internet

aws.amazon.com

164 pointseranation150 comments

I don't understand how it is possible in a functioning market economy to have 8000% markup on a utility product like bandwidth. Seems more like an oligopoly where a few big actors with a big moat has agreed to keep prices inflated. How can a sustained 8000% markup for a product like bandwidth not be considered price fixing?

source: https://blog.cloudflare.com/aws-egregious-egress/

Because AWS doesn’t actually want to collect the egress fees. They want you to avoid egress entirely for high-value services, which has all kinds of excellent implications for AWS:

Third party SaaS offerings that move large amounts of data are effectively forced to host in AWS.

Want a small number of high-value servers (e.g. big GPUs, etc) in your own data center or colo to use for non-availability-critical purposes integrated with the rest of your AWS stack? You’d better price in egress!

Want to gradually transition to a competing cloud? Good luck, egress will bankrupt you before you finish the transition.

amluto is spot on. AWS don't want to make money off of egress, they want to make it non-viable to move anything out of AWS that isn't being served to an end consumer.

It is because amulo has a point is why Cloudflare stands a good chance to disrupt AWS in at least few market segments, if not all.

More: https://stratechery.com/2021/cloudflares-disruption/

Time to move hosting back in house.

I wonder, if you made a video streaming app on top of AWS you could negotiate a significant reduction of fees, since you're not ruining their business by transferring out valuable data to competitors. And if that's the case, I wonder if that constitutes a breach of net neutrality in practice, since in practice, a major part of bandwidth costs will depend on what kind of information you are transferring.

My suspicion is that not even Netflix gets the egress out of AWS at commodity market rate. The vast majority of traffic will be handled by their own CDN

Netflix doesn't pay anything for egress of video because it doesn't serve any video from AWS.

As for everything else, AWS offers tiered pricing for everyone and it's the same for everyone. They just don't publish the tiers at that level, but yes, Netflix pays less than you probably do because they're in the higher tier -- but they pay the same as all the other companies at that tier.

Thanks! I had been curious about that for quite some time now.

You don't need to speculate. https://openconnect.netflix.com/en/

Your link has no information about their egress pricing with AWS which is the only thing I was speculating about.

> Want to gradually transition to a competing cloud? Good luck, egress will bankrupt you before you finish the transition.

They do offer the Snowball to lower transfer out cost, they also offer Direct Connect which is more convenient and can be cheaper.

For sure it won't be cheap, but being able to transfer 100 TB for less than 3k isn't too bad. Storing that on S3 would cost you nearly that per month... if you can't spare a month of cost to migrate, you may want to rethink your pricing.

For Direct Connect, they still charge for egress.

> For Direct Connect, they still charge for egress.

They do for both Snowball and Direct Connect, but it's 2 cents per GB, which is what I used to give the 3k estimate.

That still sounds like price fixing, but for a different purpose.

The Cloudflare blog post really only looks at wholesale cost of bandwidth and compares it to the price AWS charges. But I think it's missing a huge component of all of the magic that happens inside AWS between those two things.

I've seen some of the inner workings of the big cloud providers' networking stacks. The networking infrastructure, the software that runs it, the software that exposes it to customers, the thousands of engineers working at any given moment in AWS/GCP/Azure's NOCs to maintain uptime are truly some of the most impressive technical marvels I have ever seen. They aren't as sexy to discuss on HN as something like the managed containers services, functions as a service, EC2 etc, but the networking stacks like the VPC, NAT gateways, subnet routing, privatelinks, security groups, ENIs, nitro cards, etc are pure magic as far as I'm concerned and are so so so much more complicated than a standard data center's networking stack, or even Cloudflare's stack.

To use Cloudflare's "bucket of water" metaphor, AWS isn't even close to just being a dumb bucket of water that you fill with water and then get charged to take out the water. There is so much that happens inside of that bucket to segment your water into different pipes, routing your water in all kinds of customer-customizable ways for many different use cases, mixing/heating/cooling your water as you need, all while guaranteeing things like making sure your water arrives exactly where it is supposed to arrive and doesn't get contaminated or leaked along the way.

Does AWS make a big markup on bandwidth? Yea, surely they do. But is it as simple as Cloudflare says it is? Not even close.

Yes, their network stacks are definitely complex and cost a lot to maintain, I'm sure. But that doesn't necessarily make it a good deal if the customer isn't able to derive enough additional value from all that complexity. In fact it makes the offering less attractive if the complexity isn't sufficiently abstracted away and distract from product work or if their abstractions are leaky.

Recently I've been working with https://fly.io/ for a new app and it's a breath of fresh air compared to working with the big cloud providers. They offer simple but robust networking primitives built on top of ipv6 and WireGuard and provide a ton of value add on top like global distribution & load balancing, service discovery, TLS termination, all of which just work exactly like I'd expect it to, out of the box without any configuration on my side.

EDIT: Almost forgot to mention: their egress costs are also much more reasonable: https://fly.io/docs/about/pricing/#outbound-data-transfer

I'm watching fly.io with interest, I want to see how they handle the first major incidents - response time, lessons learnt, transparency before I trust them with a production site though. Most SRE skills related to your own operations are all learnt on the battlefield and not via some cliche must-read book from Google engineers afaic.

If its Linode style - delayed status page updates - sometimes as much as 15minutes, zero detail post-mortems - this problem has been fixed by our engineers thank you yada yada, and same issues repeat six months down the line then I will be understandably disappointed.

I've only been with them through one major incident so far, and I recall them handling it reasonably well.

You can see them responding to customers and providing updates in real time here: https://community.fly.io/t/there-seems-to-be-an-outage-with-...

And a detailed postmortem here: https://community.fly.io/t/major-outage-portmortem-2021-10-1...

They also update their status page pretty diligently whenever something goes wrong even for things that don't necessarily impact all customers (the only recent item on there that affected my app directly was the Oct 13 one from what I can remember): https://status.flyio.net/history

> But that doesn't necessarily make it a good deal if the customer isn't able to derive enough additional value from all that complexity.

It’s simply obvious that it’s not a good deal if you’re not their target customer with a use case they cater to. However, it could be a good deal if you have a relevant use case. Unless it’s being suggested that AWS caters to everyone in all cases then it adds nothing to the conversation to point it out.

https://www.hetzner.com/cloud gives you 20TB bandwidth for €3.49/mo VMs, which I've essentially regarded as Hetzner gives unlimited free bandwidth for all servers.

Being lynched for egregious egress fees is only something I've experienced when using mega corp's clouds, where economies of scale suggests their vastly larger size should allow them to provide even better value.

But that's in a normal market, not the artificial lock-in mega cloud corps enjoy where they're able to distort customer behavior from artificially high pricing.

I'm a Hetzner home user and a huge fan, but let's not compare the quality of networking you get for free from them with the networking you get from AWS.

I don't think I've seen a latency spike on AWS in 10 years. Hetzner, it's often possible to observe latency and drops over 10 minutes (and the situation hasn't changed much in about 10 years)

In all the years I've used Hetzner I've never observed these random 10 minute latency drops you speak of. They've always had much faster internet access then I've ever been able to get from my home broadband so I'll even SSH into & use them for network intensive dev tasks like iterating on a new Docker container since it's able to download & build the image packages in a fraction of the time.

The primary issue I have with them is latency access to their DE/FI data centers from the US, if their US DC offered dedicated servers I would be migrating to over to use them instead.

They launched Cloud in the US this month, very likely dedicated will be offered soon enough. The bang for buck on Hetzner is insane, really love them, but have and would rip them out of any business environment I come across, largely due to network quality and attitude to support.

If you haven't experienced Google translating insistently German responses from one of their DC techs you probably haven't been using them for long enough ;)

As for networking, would encourage installing something like Smokeping

I've needed to access their tech support 1 time when my HDD failed and a couple of times for new SSL certs before LetsEncrypt, who were always responsive and supportive. Don't see how derogatory characterizations of their DC techs is in anyway necessary.

But I don't really access AWS support either, when something doesn't work I've just killed the VM and started a new one. It's less disposable with bare metal servers, I can physically restart the server from their control panel or if issues are not fixable, reset the server with a new Linux OS image, which granted would be a lot more time consuming.

I will add that whilst I'm not in the business of dictating which cloud services business customers would use, I'd agree that I would recommend AWS over Hetzner who are a) paying for & would have to administer it themselves and b) is going to have access to all the managed services they would ever need in future.

I would still recommend they consider Hetzner for any high-resources intensive workloads where their raw compute is vastly less expensive. I'll also chose the cheaper reoccurring cost over convenience when I'm able to self-service it myself.

Hetzner support when I have needed it, has always been faster and of better quality than AWS or Azure. All emails and talking was in English

Hetzner has its network hiccups sometimes, but AWS quality may be a joke if you really care about latency tails and even median under any significant load. I didn't analyze the networking itself, but - you run in a VM and share host machine with other clients VMs - you just can't get stable latencies this way. It's night and day when you migrate to baremetal Hetzner and observe how latencies change. (Again - it's about dedicated baremetal - I know nothing about Hetzner's cloud)

It's not really that much magic. It's just a variation of EVPN-VXLAN plus smart NICs that segments and directs the traffic. Then they have normal VM hosts or nowadays devices with ASICs that handle the GW and NAT functionality.

Custom ASICs (Nitro chips) aren't magic? Maybe so, but they cost money to develop.

All of the other networking stuff ( Security Groups, NACLs, flow logs, VPCs, subnets, etc.) you don't directly pay for, isn't magic either, but also cost money.

Nitro is just a fancy converged host adapter with Smart NIC functionality. It's unclear to the industry how much of Nitro is custom, and how much of it is existing IP that is cobbled together (e.g. Graviton and the ARM Neoverse cores).

The ASICs are on the fabric doing the routing and NAT for all the traffic in the AZ. These ASIC are unlikely to be custom. Hyperscale operators typically use open networking hardware with merchant silicon. You can get open networking hardware to do all sorts of packet manipulation, and these devices are a cheaper than traditional manufacturers, but more powerful as they expose more low-level interfaces.

All those features you talk about are implemented from features that are provided by these hardware platforms.

AWS is just putting an managed service together from them, no different to how they take postgres, do some tweaks and rebrand it as an AWS service.

It's weird to me how people think contrasting a raw pipe billed on 95th percentile to a service like S3 or Cloudflare is in any way a fair comparison.

S3 has its own data retrieval costs, as do several of their managed services.

Those are separate charges from the EC2 costs the Cloudflare blog post discussed.

Egress does not mean S3 or Cloudflare. Egress is the raw pipe billing from AWS to the wider internet. Other services are priced differently.

That’s where folks are revealing how clueless they are.

Raw pipe isn’t priced in GB it’s in capacity. To serve GB on Black Friday you need to provision far far more capacity

Yeah but people can do that math. Peak bandwidth is not 200x higher than average bandwidth.

Cloudflare used a 5x multiplier. How high do you think it needs to be? Does total AWS bandwidth even go up that much on black friday?

The thing about a competitive market is that it requires that cost of switching is low. The higher the cost of switching, the more leverage the company has over you.

SaaS and cloud providers in particular have a lot of leverage over their customers due to the typically high cost of switching. E.g. what does it cost to move your whole infrastructure to a new cloud? They can basically gouge you up to that cost threshold.

These cost of switching actually leads to a market that is not competitive in the traditional sense. Yes, competition on the surface, but monopoly within.

It's true that gouging can't be as egregious as a true monopoly environment, but certainly much higher than a low cost of switching environment.

The big tell is margins. Anytime a company can sustain excessively high margins, it's usually a tell that theres a lack of a competitive market. A lot of software companies get high margins either by being first to market (by many years), or leveraging high cost of switching.

Despite software being cheap to deliver, it's also cheap for your competitors to deliver, so margins should be low in a highly competitive market, regardless of marginal cost of production.

I do believe new regulation is needed to handle these business models such that we can continue to foster a competitive environment. It would have to be very carefully crafted to prevent unintended second order effects of course.

Because bandwidth isn't the only AWS product, but you can't buy bandwidth for cheap from XYZ Inc. and connect that to your AWS account. That's not technically possible, you have to buy it from AWS.

So instead of using the cheapest vendor, companies use AWS for a ton of reasons (broad support, everyone knows how to work with it so it makes recruiting easier, hundreds of features, etc...) and their high bandwidth bill is worth it.

AWS is a luxury product and the outbound charge is the delivery fee. You will also find that the delivery fee for a Louis Vuitton bag is more than for a pizza.

AWS spent the first decade of existence advertising to executives as a way to significantly decrease their cost of IT, not as the Louis Vuitton of IT.

Even a Rolls Royce is cheaper than building your own equivalent car.

If you need one car, but probably not if you need tens or hundreds of thousands.

No, it's a very valuable tool for corporate IT.

The egress is a way to snare a lot of extra margin.

It's 100% clear that orgs. wanting to host large public platforms will have 'major concerns' over this pricing issue but that's not their target market.

I'll bet most HNeers are thinking in terms of 'Hosting my App' there vs. AWS Bread and Butter is mostly hosting corporate IT services, which is a different thing.

So it is:

https://www.nytimes.com/2020/10/25/technology/apple-google-s...

I mean the politicians are in on it, and turn against them when their ability to control elections for their own purposes comes into question.

Look at the “testimony” of Robinhood guy. It’s a scripted TV show; you lose.

How much margin do you think there is in coffee or soft drinks?

Apparently nowhere near the 8000%. After https://www.profitableventure.com/income-soda-retailers-marg...:

> Restaurants and bars have around a 70% profit margin on a bottle of soda and soft drink, while retailers typically have between 30–50%.

First - that is 'huge margin' far beyond their other offerings, but on fountain soda it's much greater.

Theatres make 0% margin on the Ticket and probably 90% on the soda and popocorn.

The analogy is reasonable: 'The Food' , 'The Film' or 'The EC2's are the primary ticket item and it's ballpark competitive on a cost basis.

AWS is not competing to be the cheap, low-margin host for YourFreeImageSite.Com and so their prices are going to be different on that point.

Coke and Pepsi have that kind of mark-up on their aluminum can sugar water products.

What about a $3 Coke in a vending machine?

At a grocery store: 24 pack of Coke being $7 but one 20oz bottle being 1.99?

Or that $6 coke at the movies, ballpark, or Disneyland?

$7 for 24 cans of Coke? I live in a wrong country.

This is like going to a supermarket and complaining that the plastic bags for you to store your shopping in cost 10 cents which is a 8000% markup, as if plastic bags are why you're in a supermarket

This is a horrible example that doesn't not apply cleanly.

To fix it, let's change it from buy per bag to per gram you want to leave the store.

So your canned soup costs at least 3 times more to leave the supermarket then in cost to buy it than to eat it in the supermarket.

This is not even an exaggeration. s3 is 0.024/GB and egress bandwidth is 0.09/GB

TOC 'Total Cost of Ownership'.

Nobody is paying for egress, they are paying for everything else.

AWS is focused on corporate IT so egress was always a secondary thing for them.

It might actually be more profitable for them to have uber-markups on that egress then to serve the web space that requires cheap bandwidth.

Its not 8000% on a markup on raw metered bandwidth, they're serving data from a service they operate. Comparing acting like they're just "marking up" bandwidth is an unfair comparison.

What do you mean, how is it possible? That's how markets work. You open a booth in the market, and you can ask any price you want. You can ask for a nickle or a million bucks. There's no rule about how much money you can ask for.

As for your assertion that there's a price fixing conspiracy, who do you imagine they're colluding with? What other company do you find charging these prices?

The parent comment misunderstands that most of Amazon's customers are very clearly not extremely concerned about the bandwidth costs (even if they'd all happily receive a lower bandwidth bill from AWS). They're not there for the cheap bandwidth. That's the central flaw in the parent's bafflement about markets, they did a exceptionally flat appraisal of the AWS value proposition, as though AWS isn't a gigantic business of many dozens of service offerings which act as a customer magnet and retention mechanism.

And many customers simply are not doing petabytes per month.

AWS wasn't meant to support Netflix type loads, those guys will build their own CDN's. For everyone else who wants security groups (totally for free) when some other firewall vendors would charge a small fortune to provision 1Gbps capacity for these types of services... they are fine with the price.

The other issue cloudflare doesn't understand is the bandwidth pricing they quote is for capacity (ie, 10Gbps). AWS has to have enough capacity to serve the peak, but the customer only has to pay for data used. I'm sure at low points the data is free, but maintaining the black friday / superbowl capacity is expensive, so you are paying a premium for that too.

Urm, Netflix is BUILT ON AWS (or at least was 5yr ago):

> Netflix uses Amazon Web Services (AWS) for nearly all its computing and storage needs, including databases, analytics, recommendation engines, video transcoding, and more—hundreds of functions that in total use more than 100,000 server instances on AWS.

https://aws.amazon.com/solutions/case-studies/netflix-kinesi...

You're both right. Netflix is built on AWS - for the sort of workloads you quoted.

It also has it's own entirely separate content delivery system, Open Connect. https://blog.apnic.net/2018/06/20/netflix-content-distributi...

>Netflix Open Connect is our purpose-built Content Delivery Network (CDN) responsible for serving 100% of our video traffic.

TIL, cheers

1) $50/TB is not insane pricing relatively. I used to pay something like $3/GB (way back) which would be $3,000/TB. There are still plenty of folks charging high rates.

2) $50/TB may not be a big part of some customers bills. If it is on cloudfront you drop to 0.02/GB or $20/TB for larger volumes.

3) AWS doesn't charge separately for some services that wrap around networking. Their nitro instances have a pretty good networking story.

4) Especially with this new free tier on cloudfront, a fair number of users will never hit 1TB per month (free) data.

It’s absolutely insane compared with what bare metal providers charge.

But that's apples and oranges... With AWS you get VPCs, Security Groups, NACLs, flow logs, DDoS protection (limited), public IPv4s, custom hardware to make sure you can actually use the 10/40/100Gbps pipe on your server, etc. etc. for "free" ( you only pay for those via bandwidth). The best most bare metal providers have is a firewall(security groups), and that's it.

I can get all the things you stated, including "unlimited" bandwidth for a few bucks a month if I just rent a VPS. I never understood the flocking to AWS. Does nobody like running a server anymore?

> I never understood the flocking to AWS.

Nobody ever got fired for using AWS.

BTW you don't need to "run your own server" per se on the bare metal or VPS providers. You can auto-provision with Terraform, run Kubernetes or Nomad/Consul, etc. You have to do some work to set up your templates and the environment you will use but once it's created you can stamp out copies of it endlessly.

There are cases where AWS et. al. make sense. The bottom line is that you need to do your own spreadsheets modeling your own workload and compare costs. Include extra labor for managing your own stuff and compare it to the added costs of AWS.

What you'll often find is that AWS and such are cheaper at a small to medium scale and DIY becomes cheaper (sometimes radically so) at larger scale.

I don't like being bound to a particular machine (including indirectly via a VM) and having to manually intervene if something goes wrong with that machine. AWS auto scaling, and the equivalent feature from the other big cloud providers, frees me from that.

Most VPS providers don't have VPCs ( private network for all your VPS), or flow logs, and charge you for extra public IPs.

what do bare metal providers charge

Just as an example: Hetzner's dedicated servers, which start around US$30/month, come with unlimited 1gbit connections (really unlimited, not "unlimited until we decide to throttle you").

If you max out that connection non-stop, you can push about 330 TB/month. The same amount of bandwidth from EC2 would cost roughly US$20,000.

Dedicated servers from Hetzner and OVH is what I use. Very sweet deals they have.

Are you actually able to max that out to all network peers? Have you measured this? That sounds fantastic.

No direct experience with Hetzner but for DataPacket, OVH, and FDCservers the answer is yes.

These companies are still pretty profitable.

If you colocate your own hardware you can go even lower than the bare metal hosts.

https://www.hetzner.com/cloud gives you 20TB free bandwidth a month for all its servers, including its €3.49/mo VMs.

They also offer comparatively much cheaper hardware, which is why I've been using them for all my heavy workloads for 8+ years.

Most are unlimited. But the ones where you have an actual bandwidth cap, it comes out at less than $5/TB (if we're including the machine itself), the bandwidth itself, probably less than $1/TB

Some bare metal providers have allocation based on server provisioning rather than specific egress limits. But CloudFront is cheaper with commit pricing because CF commit pricing is very very cheap and you have to factor in the cost of said reverse proxy nodes and only so much can be delivered per node. As you factor in management of the nodes it becomes even more favorable to the hyper scaler like CloudFront.

I have seen large scale deals where CloudFront comes in cheaper than what the smaller CDNs built on bare mantel can reasonably offer even with sizable commits.

Go to datapacket.com or hetzner.com for examples.

VPS providers like Vultr and Digital Ocean are a bit more but still a lot cheaper than the big three.

Bandwidth prices at the big clouds are ludicrously high.

$500/mo unlimited egress

These are not real numbers. I've tried the "free" and "unlimited" providers. They will drop you if you take them up on their offers.

Damn that is wild when you just look at the absolute figures. Really? Where? Hetzner or some other bare metal provider?

IMHO this doesn't make a difference whatsoever. We used to run a cloud gaming company and you burn through your first 100Gb within no time. Applications where data transfer is >50% of your cost is not sustainable and by giving the first 100Gb free they're not really making a dent on cloud costs. They're still charging an insane amount for data and the worst part is the pricing is almost similar across regions where Tier 1 networks might not actually charge AWS that much. it's a total rip off. In our desperate search for cheaper services, we actually checked out Linode (I don't work with them in any way) and found their egress costs a lot more palatable.

"The CloudFront free tier is a full-service free tier, meaning customers can use all CloudFront features, such as support of website images, media workloads, and APIs, without service restrictions or data type limitations."

That's a pretty direct dig at cloudflare with their service and data type limitations :) So this does seem pretty cloudflare targeted.

And to be fair it's not a bad point. AWS and CloudFront is not without it's problems, but every time I've tried to build anything non-trivial with Cloudflare's CDN I've found that some table-stakes feature turns out to be locked behind a $5000+ enterprise plan, with no option to pay a more reasonable price for just the feature itself and associated usage.

I've come to the conclusion that Cloudflare's CDN is only really worthwhile if I'm building something tiny and basic that will never conceivably need any of their enterprise features (and I've turned out to be wrong about this down the line on many occasions, so YMMV), or something super ambitious where I'm willing and able to go all in on the enterprise plan and hope that eventually economies of scale on egress costs will kick in and turn it into a good deal. That leaves a giant gaping hole in the middle where it makes more sense to go with a different CDN like Cloudfront or Fastly where the bandwidth isn't free, but advanced features are included or charged on a usage basis (these days most of my projects fall into this category).

Cloud flare is the snowball coming down the mountain at them. Why not try to take a dig?

You think they would be lowering their cost if it wasn’t for R2 or whatever they call it? Of course not!

Unless I'm blind, it's not a price reduction, but free tier expansion.

You can imagine that the conversation went something like:

“Hey, look at Cloudflare, should we reduce egress costs?”

“Absolutely not, but let’s make a free tier change and hope that fewer people hassle us about that”

It’s a signal that they’re digging in on the price structure.

It's vendor lock in.

"Hey should we build our company on cloudflare? Their egress cost is cheaper"

"No, AWS has far more features and besides, we get enough bandwidth for free because we're a small startup"

Fast forward 5 years, your company has grown and is buying a 10 terabytes a month of egress, but you can't switch platforms now, you're too far dug in and integrated with AWS.

By then you ether sold the company or your doing enough in revenue this is insignificant.

Let's be clear, you can build a functional startup on AWS free of charge assuming you at least have a valid credit card.

The .01% who eventually become enterprise clients aren't going to complain.

So $800 a month would break the bank? I'm with you on wanting egress fees to be lower but 10TB isn't that much traffic

No but it's just an example. Say it's a petabyte monthly, whatever.

If I’m 5 years in and doing 10TB and can’t afford it I would be very worried.

Agreed. They likely see Cloudflare as targeting customers with lower requirements than AWS customers, and so to compete with them they can just extend their free tier while assuming that as companies grow they'll exceed that tier.

For high volume customers this isn't going to make a huge difference. For many who were considering Cloudflare, it could mean their service is now free.

Yes it is really just a free tier expansion. But many sites today would essentially be able to completely live under the free tier for the foreseeable future, who were previously paying for it. Which I guess makes it a price reduction. Even a company with 2Tb of egress traffic would now only pay for 1Tb instead of 1.95Tb. Which makes it nearly a 50% price reduction.

So I guess... it depends how you look at it.

And if you need 100TB of bandwidth it's a 1% discount.

My guess is that the majority of their revenue is coming from a few big customers, for whom this is not a relevant discount at all. I thinkt that they are introducing this offer to get developers to adopt AWS for small projects, hoping that they'll then use the same service they are already familiar with for big projects.

> the majority of their revenue is coming from a few big customers

A very significant percentage of their revenue comes from Netlix, Heroku, and several others that run their entire infrastructure on AWS.

Netflix does not run their entire infrastructure on AWS. Final delivery of content still comes from OpenConnect (their own CDN). IOW, they migrated all of their non-CDN functions to AWS, but content delivery is still handled by OpenConnect appliances installed at key peering points within ISP networks.

Won't all there enterprise clients negotiate bulk rates anyways ?

AWS can't do too much to clients with the capital to build their own data systems

Over 150TB I think you are easily down to 50% off their base rate already aren't you? $50/TB or so?

Any discount only applies to the traffic that exceeds that number.

In other words, if 151 TB total is consumed:

* first 150 TB at full price

* next 1 TB discounted

I don't think this is Amazon's intention. AWS does not make its money from SMEs.

This is about courting developers. If Cloudflare is going to make it free to play with all their tools, and only start charging when usage becomes "real" then they have a good chance of winning over the dev community. AWS can't let that happen, because they know then the enterprise rot will start.

Doesn't free tier last only 12 months?

Some free tier quotas only last 12 months, others are indefinite. From the first paragraph of the linked article, they are removing the 12mo limit on the monthly free bandwidth allowance:

> Free data transfer out of CloudFront is no longer limited to the first 12 months. [..,] Free data transfer out from AWS Regions is also no longer limited to the first 12 months.

In this case it’s 1tb free every year. They didn’t put the 12 months stipulation on it.

Not entirely, certain services are free forever and this reduction is one of them.

This is probably a savvy move in that it's basically a huge price break for small and mid-size enterprises (my CF bill could drop from like $3K to near zero). The big players with those $10K, $100K, or whatever per month won't get a significant cut here. But I'm also guessing that those small and mid-size customers are exactly Cloudflare's main sales funnel. Their entire existence is based on giving inexpensive power tools that can be configured instantly. Anyone spending >$10K/mo on egress is more likely already set on AWS as a strategic vendor, have a multi-year lock-in deal and are more likely using the pro-level tooling you can get in Cloudfront. They are far less likely to unwind a giant pile of infrastructure for small cost savings anyway.

Yeah, they are basically charging $100/month less than before. If you need less than a TB of bandwidth, this is a good deal since you pay nothing.

Just hope you don't get over a TB, or it's going to be expensive quickly!

For big customers this is not going to make any difference at all.

Yes, it’s setup to be a very rude awakening due to how spiky bandwidth ends up being.

What’s interesting is they view this as a way to increase profits instead becoming slightly more competitive by reducing what they charge per TB of bandwidth.

seems like a pretty pedantic difference, given that the expansion is to all customers.

if you pay for outgoing bandwidth on AWS, your bill will go down. that's a price reduction.

Non linearly. It’s like saying $5 off anything from a turkey wrap to a Lamborghini.

yes, i understand that. but "not the type of price reduction i wanted" doesn't mean "not a price reduction".

$5 off a turkey wrap is still a price reduction. whether or not your were shopping for a lamborghini isn't really relevant.

fucking awesome deal for the folks buying turkey wraps.

You get more free GB but once you do they’re at the full original price. Busy sites won’t see any meaningful reduction in their bills, and smaller sites we’ll need to be mindful of this as they grow. Another way of looking at this is that they’re giving up the first $8.50/$85 of egress charges but only that first part — if you’re paying substantially more, that’s how much your bill is going down.

What it does do, however, is favor their CDN over the competition. If you use Cloudflare, Fastly, Akamai, etc. you used to pay roughly the same egress rate as a CloudFront customer, but now you hit the free tier limit 10 times faster.

That is what it looks like. This news post appears to mostly restate another post Amazon made describing the free tier changes a few days ago [1] which was already discussed on HN [2].

[1] https://aws.amazon.com/blogs/aws/aws-free-tier-data-transfer...

[2] https://news.ycombinator.com/item?id=29332207

Isn't free tier a price reduction model, with market capture/ marketing as a goal, anyway?

Coincidentally enough, on Monday I had a call with my AWS account rep, she was asking what plans we had for the next year. I told her that we were evaluating some of our spend to see if there were places we could economize, but our biggest plan was to move from S3+Cloudfront to Cloudflare R2. "Have you heard of R2?" "No, I'll check with one of my S3 engineers and get back to you."

Sounds like SOMEBODY over there is trying to address the Bandwidth Alliance announcement.

Discussed 2 days ago:

https://news.ycombinator.com/item?id=29332207

Thanks Cloudflare!

This right here.

A friendly reminder that, if you don’t like Amazon’s ethics in how they run their retail business, vote with your infrastructure dollars — that’s what’s paying for the show (well, that and their advertising business everyone ignores).

Amazon’s AWS margin is everyone else’s opportunity.

Why do you feel you need to bring up Amazon retail, ethics and voting with dollars to a discussion about AWS data transfer price reduction?

Another crazy idiot single issue person who think companies have souls, fear punishment and are coherent :D

Dude if you re sad you re paid a dollar too short in a warehouse, bullshitting about infra boycott will accomplish nothing, or at best, punish aws for something they cant control.

Build a competitor if it s so easy to do the warehousing ethically, and you might even end up having amazon contract you if you re brilliant and cheap.

Cloudflare, my hero!

[1] https://blog.cloudflare.com/introducing-r2-object-storage/

This is massive. A 1TB outbound allowance will cover just about every non profitable use case. This means that a minimally sized t4.nano can operate for peanuts without an unknown component.

The 1TB allowance is only for Cloudfront. For general data egress (from ec2, directly from S3), it is just 100GB.

And also every other smaller cloud provider provides at least 1TB of free transfer (OVH, Hetzner, Vultr, Digital Ocean, etc).

Even AWS's own Lightsail (which is so throttled that it's a far inferior solution to most of the other VPS/"cloud" providers) includes at least 1TB of transfer for free.

https://aws.amazon.com/lightsail/pricing/

In almost every case, inter-account and inter-AZ transfer will incur the same pricing as egress, especially if it travels through an IGW.

In our internal testing, it appears that AWS often applies the egress pricing twice, both when leaving the AZ where your instance(s) are located as well as again in the region where your customers are, after traveling through the AWS internal network; the first is an inter-AZ transfer, and the second is the actual egress from AWS' network.

So, it appears that the egress fees are nearly always not merely the oft-cited 8,000% greater than competitors, but twice that. AWS is not very transparent about this.

Understatement of the year: "Data transfer charges are often overlooked while architecting a solution in AWS."[0]

0. https://aws.amazon.com/blogs/architecture/overview-of-data-t...

Cache invalidations are the ones that will really get you bad in CloudFront if you're not careful [1].

As a new user, I was working on publishing open source documentation via CloudFront (https://tmuxp.git-pull.com) and made a mistake of invalidating '*', and doing it every time I pushed to CI. This was sphinx-doc, so no cache-busting filenames.

My bill was absolutely enormous. I chewed threw the free tier credits.

If CloudFront ever gets more generous with invalidations, that'd help reduce the sting for those of us that make those early mistakes.

[1] https://docs.aws.amazon.com/AmazonCloudFront/latest/Develope...

Pro tip : for such scenarios (push static documentation), services such as Netlify, Cloudflare Pages, Firebase Hosting are preferable. Their costs are lower, free tiers are highly generous, and cache invalidation is handled automatically.

I've tried AWS amplify and some cloudflare pages. I'm looking into some of those others for gatsby / next.js hosting.

For gatsby sites and webpack apps, I did ultimately figure out and simplify my s3 / cloudfront deploys and only invalidate index.html.

Ultimately it looks like I'm going to be migrating away to sphinx-doc. It's not up to date with the best practices in static site apps these days.

It's almost as if competition leads to lower prices for consumers! Who could have known?

They started feeling the squeeze from Cloudflare weren’t they?

Free data egress out of AWS is a fairly big deal, since egress costs were formerly the main bottleneck which made using AWS impractical for all sorts of heavy compute/number crunching. It will be very interesting to see how these scenarios are affected.

It sounds like a nice move to start increasing competition on bandwidth out by cloud providers. Let's see if the market will follow. Indeed, it doesn't change much for big players, but it is a lower monthly/yearly bill for the startups and smaller players. Bandwidth out was always the small asterisk that most people forgot to estimate and/or read properly in the contract. Don't underestimate your bandwidth out from your cloud provider in your business plan. It can really go out of control quick.

This is a pretty big change for smaller players. AWS region free outbound tier is now 100GB instead of 1GB, and more importantly, the free tier is perpetual.

This isn’t a reduction at all?

It’s introducing more free tier, but once you blow past that, the costs add up again.

Is this a Cloudflare sell signal?

I would say no - this legitimizes them as competition. Otherwise, there'd be no reason for the change.

Are there any other examples where an incumbent lowering prices in response to competition was a positive sign for the incumbent?

I'm also trying to unpack "legitimize" to something more concrete... One possibility is that AWS's action is a signal of AWS customers' moving business to Cloudflare (that we wouldn't otherwise know about). Or perhaps it's simply AWS flinching and consequently customers perceive Cloudflare as more legitimate and move more business there?

Nothing further from that. This is the best AWS can scramble in the near term as they continue seeing a decreasing trend in customer acquisition rate for the sector in which Cloudflare is predating them.

Cloudflare has $20M in revenue growth in last quarter.

AWS had growth of $1.2B in last quarter? I think AWS is still hitting something like 30%+ revenue growth YoY even though they are already huge?

With this size / scale, AWS should be able predate someone like cloudflare on base pricing.

I do think cloudflare may be able to evolve their products faster given they aren't carrying around x billion of recurring revenue.

I am unaware of the specific verticals in which AWS is increasing their revenue growth; maybe they don’t go head the to head with Cloudflare there. For AWS to predate on pricing against Cloudflare would imply reducing the pricing for all existing customers too and that would be a significant amount of money left in the table.

Cloudflare seems to provide free egress. Cloud providers like AWS have been overcharging for some time. This seems more like a minor correction on behalf of Amazon than a sell signal for Cloudflare.

If you believe cloudflare egress is "free" I have a long list of "free" and "unlimited" services to sell you.

Cloudflare simply doesn't share egress pricing.

Sure, I'd love to hear about them. Cloudflare has yet to charge me for egress.

Issues with cloudflare

1) They do not have public egress pricing. That should be a red flag at this time.

2) They are currently LOSING a lot of money on their offerings - AWS makes a ton. That should be red flag #2.

> They are currently LOSING a lot of money on their offerings

This is not interesting without more context. If they lose money because their income is below costs, that's a problem. If they lose money because they have headroom and spend all of it on customer acquisition, that's an opposite of a problem.

Probably half R&D (no issues there), half sales and marketing.

One thing - is their free service offering a sales and marketing expense or is that in cost of revenue.

Last quarter they did 80M in sales costs (vs 40 in R&D and 28 in G&A). Sales costs were 50% of operating costs and close to 50% of revenue.

Amazon has everything blended, but sales runs 7% of revenue.

They are doing R&D atm that’s where the investment is going. The Cloudflare TAM isn’t static, it keeps growing.

This is a great question, and I don't know if the answer is as clear cut as the "No" responses here suggest. With 1TB free, Cloudfront has now removed the incentive for AWS customers (those who use EC2 or S3) to adopt Cloudflare's free or even $20 tier. While Cloudflare doesn't make much money off these customers, it's how their network learned and grew. 1TB is more than enough for a lot of applications.

No, the opposite actually. Cloudflare’s offering is still better, and AWS failed to come up with a good response to it. Make no mistake, if you are a company of any significance this discount is weak.

afaik Cloudflare prioritizes its paying customers over those on the free tier e.g. when there are limited resources at a POP. It's not clear whether Cloudfront will do the same -- does anyone know?

this is barely an answer to cloudflare. aws still has a lot to do

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