Amazon Cancels Fees for Customers Moving to Rival Cloud Services | Hacker News Reader

Amazon Cancels Fees for Customers Moving to Rival Cloud Services

bloomberg.com

dupe,

https://news.ycombinator.com/item?id=39612607

https://news.ycombinator.com/item?id=39609254

Worth noting that they didn't choose to do this, they were required to by the EU.

They were also facing investigation elsewhere, so it was not just the EU. In the UK Ofcom (the telecoms regulator) has just finished an investigation into the cloud services market and referred AWS and Microsoft to the CMA (the competition regulator), over the issues of egress fees and licensing: https://www.computerweekly.com/feature/The-CMA-anti-trust-in...

Whilst I agree others were pursuing the matter, the action that /required/ them to do so was solely on the EU. Yes, they may have been facing pressure from others, which may have contributed to it, but the EU rightly deserves the sole praise for this for actually acting on it, and promptly.

I agree to an extent, but they could have satisfied the EU just by changing the prices for EU customers. They are doing it globally because they expect other regulators to do the same.

Fair point!

Ahhhhh. I was wondering how Amazon (of all people) would decide to do this.

It’s kind of ironic that the removal of these anti-competitive things actually make the product itself more competitive.

It’s the same with Apple and the AppStore (if they ever actually do this properly). The main complaint about iOS is it’s too restrictive. If you can have an alt AppStore then that makes iOS _better_ not worse.

I do not follow the logic?

I think cloud providers having egress fees is flat out just revenue raising. I don’t follow the connection to the App Store, which is a matter of restrictive for whom and is not an analogous situation.

Egress fees in general, or the current trend in egress pricing?

Bandwidth isn't free, so cloud providers would need to charge for it somewhere, and the strategy of all the major providers is to charge in line with actual usage, so charging for actual bandwidth usage makes sense.

Now one could argue that not charging ingress fees is "flat out just lock-in", and that perhaps they should be splitting the ingress/egress fees appropriately.

If an application/service allows me to pack me an go without any friction and fees, I tend to trust that tool more and resist leaving until it starts to sink.

It signals "We believe that we can support and serve you the way you want and we trust ourselves to do it, so no fences and barriers".

As a result, instead of being on the toes for going all in, you can confidently scale in that tool/service.

IOW, it's the difference between a trusting and abusive relationship.

How would you like to pay for the outbound bandwidth you’re using? Choose:

1. metered gigabytes

2. bundled in with some other resource you’re paying for (which one?)

3. fixed allowance then it stops working altogether

4. monthly charge per 95%ile of contractually provisioned mbps (i.e. old school ISP billing)

5. I just want something for nothing

Whichever one doesn’t make it challenging for customers to switch to another provider. That may raise prices elsewhere (such as ingress fees), and the tradeoff is still likely to be net positive for the customer due to the increased competition.

That was option (2). The reductio ad absurdem hits like a train with that option. It’s a trap for new players. In that particular variant, the following year the same people will be complaining about how much ingress costs these days, and the same hapless regulators will feel the urge to be Seen To Do Something. Wash, rinse, repeat. Still, thanks for playing

The pro-competition regulators aren’t here to make your service cheap. They’re just trying to make sure that customers can exit and switch providers without artificial barriers. If you want to soak people for ingress fees, snd it’s easy for customers to switch, go ahead.

Bandwidth is not an artificial barrier. It’s real infrastructure, with a real cost. I should know, I once dropped a LINX core switch on my foot.

Amazon is doing the right thing by maintaining egress fees but waiving them on departure. Not because it’s free for them, but because there’s zero chance that this precipitates a mass exodus, because moving is still hard even if it’s slightly cheaper. They’ll likely even gain some customers. That is, they’ll absorb the cost with growth. Which is Amazon’s business strategy in a nutshell.

Bandwidth is not artificial, but Amazon’s pricing structure for it absolutely is artificial. As you point out, bandwidth is not free but Amazon didn’t charge for ingress. Now they’re taking that artificial pricing structure and making it equally artificial in a way that (somewhat) promotes competition.

All pricing is artificial. Money does not occur in nature. This is such a generic point that it isn’t worth debating. And if you think “but you know what I mean” then no, I really don’t. This sounds like someone who wants to have their cake and eat it, having a whinge when it turns out they have to pay the baker.

Metered GB is fine if there isn't a 8,000% markup. 200-300% would be much more reasonable and the angst over this would probably just go away.

They are also already doing 5 on ingress. But maybe you consider it 2.

I do consider it bundled - with services priced for data at rest. For data ingress, that seems quite right to me.

Better products doesn't always equal more profit, which is all a company cares about

Companies consist of people and people care about far more things than profit for a random company. It should be obvious to anyone considering how much people hate on companies and their bosses online. It's close to 60 years ago we got the expression "the long march through the institutions".

> people care about far more things than profit

The "clueless" of The Gervais Principle.

https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...

Management of publicly traded companies in the US is required by law to put profits first.

According to a 2014 US Supreme Court decision...

"While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so."[1]

Public or not, people involved in a business do have fiduciary duties to their investors. But those duties are not specifically about profits. They are about "obedience, information, loyalty, and care"[2].

----

[1] https://caselaw.findlaw.com/court/us-supreme-court/13-354.ht...

[2] https://online.hbs.edu/blog/post/fiduciary-duty-to-investors

Right, I spoke without basis on facts. Thank you, I have done some research and changed my opinion.

Incorrect and incorrect. This is just mindlessly repeated propaganda.

Management has to act in shareholders' best interest. Management decisions cannot be self-serving at the expense of shareholders. Shareholders are a diverse bunch and can be interested in things besides pure profit, and companies can choose to maximize on those alternative dimensions.

The Supreme Court said as recently as 2016: "Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not."[1]

From that same article, there's more:

"More to the point, corporate directors are protected from most interference when it comes to running their business by a doctrine known as the business judgment rule. It says, in brief, that so long as a board of directors is not tainted by personal conflicts of interest and makes a reasonable effort to stay informed, courts will not second-guess the board’s decisions about what is best for the company — even when those decisions predictably reduce profits or share price."

1. https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...

I should have done some research before writing opinions in American corporate law. You are correct, it is not a legal obligation but a combination of hedge fund activism and CEO compensation structures that conspire for the maximization of profit and maximization of short term stock price.

Thank you for pointing that out.

> The main complaint about iOS is it’s too restrictive.

For a small subset of users. For most others, it just works.

The benefits of being a hassle to move away from and being locked out of family/friend discussions because your Android breaks the group discussion far outweigh the benefits of opening up the platform.

That's true in general. Taking an anticompetitive advantage away from a company almost always results in a better product because it forces competition.

Competition is good for both companies and consumers.

How is it good for companies that already hold a majority market share?

This only happens because we're in a near-monopoly situation. Where all the happy laws of the free market start failing miserably and in paradoxical ways.

With sufficient competition, Amazon would be forced to keep egress fees zero.

There are two major other Cloud providers and then smaller ones - Linode, DigitalOcean, etc.

AWS is not really a monopoly but people just refuse to think out of the box when building out new infrastructures. I moved all my stuff to DigitalOcean - it's what a cloud should be like.

Not only is AWS a racket, but the constant pile-on of toys has turned it into a complete management nightmare that sucks your time in like a black hole.

There is tons of cloud competition. Amazon is nowhere near a monopoly.

> The Big Three cloud providers accounted for 66% of worldwide cloud revenue.

Seems like there is a huge concentration of market share in the big 3. How is this “nowhere near” a monopoly?

Source: https://techcrunch.com/2023/02/06/even-as-cloud-infrastructu...

Problem is, free markets beget oligopolies. They’re a natural consequence of being able to accumulate and concentrate capital.

how is it ironic? that's the exact goal

companies would rather not compete at all

I think ot was Joel Spolsky who wrote about this with regards to working on MS excel. The ability to convert to the competitor’s format was the final nail in the coffin for them. Once they implemented that feature, there was almost no reason to go with the other spreadsheet. I would expect anything that reduces friction for switching to a competitor is going to be a competitive advantage since it removes risk from the decision.

This is SOP for retaining and enticing strategic customers.

PANW was notorious for giving customers 2 years free on 5 year length 7 figure contracts of Prisma Cloud a couple years ago.

Because margins are nearly nonexistent in the space, 80%+ discounts are doable to retain or attract strategic accounts either for brand awareness or for stronger product alignment

https://archive.ph/ILsrX

Via support request eg one time during migration. Smart optics. Minimal real impact

Did they cancel the fee again?

https://news.ycombinator.com/item?id=39612607

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