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Comment by KptMarchewa | Hacker News Reader

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KptMarchewa

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

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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?

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