Google Cloud Cuts Fee As Oversight Increases

"A decision by Google's cloud-computing unit to eliminate certain data fees highlights continuing complexities of cloud pricing as businesses seek to cut tech costs. The move coincides with greater regulatory oversight of cloud competition but may not go far enough to satisfy some critics.

Google Cloud this month removed fees customers pay to move their data out of its cloud platform and into another provider or a data center -- becoming the first among major cloud providers to do so. Such fees fall under the category of "data egress" costs, which include moving data across regions, cloud services and other providers, and are common practice among major cloud providers.

"We wanted to take that off the table, because we believe that if customers want to move out of Google Cloud Platform and they find a better provider, they should be able to do that easily, quickly, without any kind of cost," said Amit Zavery, a vice president and head of platform for Google Cloud.

The move comes amid increasing audits of cloud bills by cost-conscious chief information officers, and growing scrutiny of cloud competition by regulators. To both, charging data fees can amount to an anticompetitive practice because they reach tens of thousands to millions of dollars for massive amounts of data, thereby deterring companies from using multiple cloud platforms or switching providers.

Google's change was welcomed by some CIOs, who say they often encounter restrictive pricing practices and licensing fees from enterprise tech vendors. "Now that they give you a pathway out, which other providers aren't giving you yet, it is a differentiator to me," said Rob Zelinka, CIO of financial technology firm Jack Henry & Associates. The Monett, Mo.-based company uses multiple cloud providers including Google Cloud.

But others say the Alphabet company's change does little to address bigger cloud pricing challenges, such as surprise cloud bills and the cost of managing multiple cloud platforms.

"While this offer presents a possible cost-saving opportunity and increased flexibility, it's crucial to recognize its conditional nature and limited scope," said Mike Anderson, chief digital and information officer of cloud security firm Netskope.

There is fine print: Fees are waived only if companies end their relationship with Google Cloud. The waiver doesn't include the cost of moving data between Google Cloud and Amazon Web Services, for instance, which is what analysts call the "holy grail" setup of using multiple cloud providers at the same time.

"At the highest level, it can be thought of as a way to remove cloud switching fees," said Shawn Michels, vice president of product management for cloud at Akamai Technologies, a cloud competitor. "But it really doesn't help with some of the next-generation, distributed data-heavy applications."

Also excluded are the costs of moving data in and out of content-delivery networks like Akamai, which work behind the scenes to process data-heavy web pages more quickly. Customers are required to apply for credit that covers the fees, and must move their data 60 days after the contract ends -- a tall order for those with petabytes of data." [1]

1. Google Cloud Cuts Fee As Oversight Increases. Lin, Belle.  Wall Street Journal, Eastern edition; New York, N.Y.. 23 Jan 2024: B.4.