One thing I find notable about S3 today is that, while it used to drop in price reasonably often, there hasn't been a price drop in a full decade:
Egress pricing of $0.09/GB has been around for over a decade too.
For reference transit cost has dropped over the years and is now about at $0.000247/GB or free if there is a peering agreement with the network the data is sent to.
Egress pricing pays for the AWS network infrastructure that is incredibly reliable (hardware failures happen regularly yet almost no one notices) and allows it to operate at scale sufficient to absorb even the largest DDoS attacks.
This isn’t just AWS BTW; all tier 1 cloud providers recoup their costs this way.
Yes, you're legally correct, but the point is AWS are clearly overcharging for egress.
As you say:
> Egress pricing pays for the AWS network infrastructure that is incredibly reliable (hardware failures happen regularly yet almost no one notices) and allows it to operate at scale sufficient to absorb even the largest DDoS attacks.
Cloudflare is also pretty good at absorbing DDoS attacks, yet charge no egress costs.
Maybe the real question is, are the tier-1 providers colluding in overcharging for egress?
I don’t think we can say with certainty without knowing more details about their respective network investments. CloudFlare is architected quite differently than the others, and has a much less comprehensive service portfolio. It’s not an apples to apples comparison unless we’re strictly comparing S3 to R2. Choosing to charge less may also be a loss leader or a differentiation play.
I think this underlines the core problem. It's really hard to make a fully informed choice of provider based on costs, and they deliberately make multi-cloud expensive.
Egress costs are fairly clearly a vendor lock in strategy. If I want to transfer 1TB to run on cheaper compute at another provider, that costs me $90 (edit) on AWS as opposed to $0.24 at wholesale prices. It's unlikely to be cost effective so I choose AWS compute.
EDIT: thanks to someonebaggy for pointing out my decimal point error.
Ninety dollars to transfer a terabyte is clearly ridiculous.
If they're charging what customers are willing to pay, are they overcharging? I think an axiom of capitalism is that that's the amount you should charge.
Many people avoid T1 clouds because they're so expensive, but they seem to have found an extremely profitable market segmentation consisting of the remainder.
If they were offering it in a competitive market without the special bundling factors, basically nobody would choose their egress. So yes they're overcharging, because they have control of your data.
This is just Stockholm Syndrome. All T1 (except Cogent) and most T2 ISPs (that's most ISPs) are also very reliable, how much do they charge for transit?
I am not confusing T1 ISPs with T1 clouds. When I said T1 ISPs, I meant T1 ISPs. Because those are really reliable ISPs (that you should probably not use as your ISP, for reasons irrelevant to the comparison).
Finding any excuse to justify a 100x profit margin is a form of Stockholm syndrome.
It really seems like you are using spurious accusations of impropriety to deflect from your actual point being bad.
We are comparing to T1 ISPs because they also provide huge amounts of bandwidth reliably, and they do it 3 orders of magnitude cheaper. Therefore it cannot possibly be the case that providing the bandwidth is simply that expensive.
Again, these egress fees are not paying for egress alone. They are defraying the cost of operating a massive, complicated, low-latency, reliable cloud network infrastructure, much of which is free of charge when used internally.
Some, like you, are expecting that cloud providers operate on a “cost plus” model where what you pay is strictly based on what marginal costs for the same thing. But it’s not that simple in reality. Charges levied for one thing can be used to pay for another.
The bandwidth itself? I’m honestly unsure as I don’t know how AWS’s interconnectivity and total bandwidth compares to Arelion. But it’s still the wrong question to ask.
I think it’s “am I getting the value I expect for the price I pay?” If it’s not for you, that’s fine. But for others, it’s worth the cost. To them, they’re paying for more than mere egress bandwidth.
So basically it's good as long as the consumer surplus is greater than zero, regardless of how the consumer surplus stacks up against the producer surplus?
If it's surplus it's not costs. Why did you claim that the high price is to cover the costs if 99.9% of it isn't covering the costs?
If I may take the opposite view: companies should be grateful to get any profit from me at all.
> If it's surplus it's not costs. Why did you claim that the high price is to cover the costs if 99.9% of it isn't covering the costs?
I edited my comment above to explain in more detail what these charges are covering (and it’s not egress bandwidth alone). This has been a fast moving conversation and I’ve tried to add more context, unfortunately after the fact. My bad for posting too quickly.
If you're suggesting they really do have 1000x the costs of companies whose core business is internet, and yet they refuse to contract with those companies to deliver the service (they can still get 990x profit while still leaving 10x for the other company) in a rational market that would be a business-ending level of incompetence.
It's no different than if I'm selling apples for $1000 each. Even if I can find one or two customers willing to pay that, wouldn't I have to be pretty stupid to spend $900 growing each apple incompetently when I could just spend $2 at the grocery store to fulfil those orders?
I’ve done the best I can with limited time and space to explain it here. If you still don’t understand or don’t care to learn how cross-subsidization works and the costs and business model of operating a tier 1 cloud provider and how they differ massively from operating an ISP, I don’t know what to tell you. Getting a job at one of these companies to gain that experience would be eye-opening for you.
It's funny that you say they are shifting costs around when AWS in particular is notorious for not doing that. Every individual thing they provide is metered and profitable.
simonw · · focus · HN ↗
charcircuit · · focus · HN ↗
For reference transit cost has dropped over the years and is now about at $0.000247/GB or free if there is a peering agreement with the network the data is sent to.
otterley · · focus · HN ↗
This isn’t just AWS BTW; all tier 1 cloud providers recoup their costs this way.
willtemperley · · focus · HN ↗
otterley · · focus · HN ↗
willtemperley · · focus · HN ↗
Yes, you're legally correct, but the point is AWS are clearly overcharging for egress.
As you say:
> Egress pricing pays for the AWS network infrastructure that is incredibly reliable (hardware failures happen regularly yet almost no one notices) and allows it to operate at scale sufficient to absorb even the largest DDoS attacks.
Cloudflare is also pretty good at absorbing DDoS attacks, yet charge no egress costs.
Maybe the real question is, are the tier-1 providers colluding in overcharging for egress?
otterley · · focus · HN ↗
willtemperley · · focus · HN ↗
Egress costs are fairly clearly a vendor lock in strategy. If I want to transfer 1TB to run on cheaper compute at another provider, that costs me $90 (edit) on AWS as opposed to $0.24 at wholesale prices. It's unlikely to be cost effective so I choose AWS compute.
EDIT: thanks to someonebaggy for pointing out my decimal point error.
Ninety dollars to transfer a terabyte is clearly ridiculous.
someonebaggy · · focus · HN ↗
willtemperley · · focus · HN ↗
someonebaggy · · focus · HN ↗
Many people avoid T1 clouds because they're so expensive, but they seem to have found an extremely profitable market segmentation consisting of the remainder.
Dylan16807 · · focus · HN ↗
someonebaggy · · focus · HN ↗
otterley · · focus · HN ↗
And kindly refrain from accusing others of Stockholm Syndrome here. It’s incredibly rude.
someonebaggy · · focus · HN ↗
Finding any excuse to justify a 100x profit margin is a form of Stockholm syndrome.
otterley · · focus · HN ↗
[dead]
someonebaggy · · focus · HN ↗
We are comparing to T1 ISPs because they also provide huge amounts of bandwidth reliably, and they do it 3 orders of magnitude cheaper. Therefore it cannot possibly be the case that providing the bandwidth is simply that expensive.
otterley · · focus · HN ↗
Many of us are aware that ISPs charge less for bandwidth. But they are not offering the same thing as a tier 1 cloud provider.
You may find these interesting:
<a href="https://aws.amazon.com/video/watch/c37546e1558/" rel="nofollow">https://aws.amazon.com/video/watch/c37546e1558/
<a href="https://cloud.google.com/blog/products/networking/speed-scale-reliability-25-years-of-data-center-networking" rel="nofollow">https://cloud.google.com/blog/products/networking/speed-scal...
someonebaggy · · focus · HN ↗
otterley · · focus · HN ↗
Again, these egress fees are not paying for egress alone. They are defraying the cost of operating a massive, complicated, low-latency, reliable cloud network infrastructure, much of which is free of charge when used internally.
Some, like you, are expecting that cloud providers operate on a “cost plus” model where what you pay is strictly based on what marginal costs for the same thing. But it’s not that simple in reality. Charges levied for one thing can be used to pay for another.
someonebaggy · · focus · HN ↗
otterley · · focus · HN ↗
someonebaggy · · focus · HN ↗
otterley · · focus · HN ↗
someonebaggy · · focus · HN ↗
If it's surplus it's not costs. Why did you claim that the high price is to cover the costs if 99.9% of it isn't covering the costs?
If I may take the opposite view: companies should be grateful to get any profit from me at all.
otterley · · focus · HN ↗
I edited my comment above to explain in more detail what these charges are covering (and it’s not egress bandwidth alone). This has been a fast moving conversation and I’ve tried to add more context, unfortunately after the fact. My bad for posting too quickly.
Dylan16807 · · focus · HN ↗
They could charge 10x-ish as much as T1 ISPs and cover all those costs and still have it be almost all profit.
otterley · · focus · HN ↗
Show us the math.
someonebaggy · · focus · HN ↗
It's no different than if I'm selling apples for $1000 each. Even if I can find one or two customers willing to pay that, wouldn't I have to be pretty stupid to spend $900 growing each apple incompetently when I could just spend $2 at the grocery store to fulfil those orders?
otterley · · focus · HN ↗
Dylan16807 · · focus · HN ↗
someonebaggy · · focus · HN ↗