Cloud computing has been hailed as a revolution in IT. And, for good reason. Migration to the cloud enables organisations to cut IT capital spending and operating costs and gain the flexibility to scale technology that facilitates change. When you consider the benefits it can bring, it’s not surprising that so many have been eager to upgrade to the cloud. But there is a but – There are extra costs involved and it is crucial that all the costs are detailed and understood at the outset.  

Data egress can take companies by surprise. Data egress is when data leaves a network and goes to an external location. If you’re using the cloud, data egress occurs whenever your applications write data out to your network or whenever you repatriate data back to your on-premises environment. While cloud providers usually do not charge to transfer data into the cloud (“ingress”), they do charge for data egress in most situations. Another charge related to data egress fees are data transfer fees, which may be assessed when moving data between regions or availability zones within the same cloud provider.  

Data egress fees are often described as hidden fees because they are billed in arrears, which means your applications, workloads, and users may continue to extract data and unknowingly run up fees before you realize just how expensive it is. It can be a challenge for organisations to monitor and manage data egress fees, especially in large enterprises where multiple offices, departments, or branches all conduct data analytics. 

Containing cloud costs can be an onerous task. Gartner estimates that 60% of public cloud customers encounter cost overruns. In some cases, these high charges have caused companies to move back to data on-premise. 

So, we can see that without proper planning and oversight, cloud expenses can spiral out of control. It has been reported that the bank Capital One received a bill from AWS with a 73 % increase on the invoice they were expecting. 

Egress fees will vary depending on the volume of data you’re moving and where it goes. The more data you move, the more expensive it will be overall but the lower the per gigabyte charge will be. Location matters, too. Transferring data between availability zones or within regions will be your lowest fee. Transferring data across different regions or continents will present the highest fees. 

The main problem with egress fees is the lack of transparency. These charges are by no means new, the problem is their complexity which makes them hard to predict and model. It could be argued that firms suffer “bill shock” simply because they failed to carry out a detailed enough analysis before the migration. 

The key is in the planning. There are many ways in which organisations can plan ahead with managed cloud providers, consultants and system integrators who can advise on custom designed solutions. One way or another, there is a cost to using the cloud optimally which must be included in the overall cost. 

There’s no reason that egress fees should be a fact of life for companies wanting to move workloads to the cloud. Several vendors offer AWS S3-compatible storage services that are free of egress or API fees and priced well below offerings from the major hyperscalers. They include Wasabi, Seagate Technology Holdings PLC’s Lyve Cloud, Cloudflare’s R2 Storage and Iron Mountain Inc.’s Iron Cloud. These companies move data back and forth between cloud providers using low-cost direct connections or peered interconnects and absorb the costs into their storage fees.  

What steps can you take to control your egress fees. 

  • Carry out detailed analysis before you move. 
  • Undertake in depth study of your architecture and make structural changes if necessary. 
  • Ensure you have good visibility so you know how much your egress will cost and keep a tight hold on the reins. 

Here at Broadgate, when building new operating models for our clients, we always factor in the cloud platform ingress/egress requirements now and for the future into the business case. 

Posted on: 28/12/2022
By: admin

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