News

Cloudflare Challenges AWS with Alliance to Cut Data-Transfer Fees Among Providers

• By David Ramel
• 10/11/2018

Cloudflare has formed a "Bandwidth Alliance" to cut data-transfer fees among mutual customers with several cloud services providers, including Microsoft Azure and IBM Cloud, challenging Amazon Web Services Inc. (AWS), the major player in the space.

Cloudflare, which operates a content delivery network (CDN) that interoperates with many different cloud platforms, described the alliance as "a group of forward-thinking cloud and networking companies that are committed to providing the best and most cost-efficient experience for our mutual customers" by eliminating or reducing the costs commonly associated with transferring data from cloud platforms to other platforms or networks.

"We are proud to announce the following cloud providers and hosting companies who have joined together with us in committing to reduced or zero bandwidth rates for mutual customers," the company said, listing eight companies and services in addition to Azure and IBM Cloud. Cloudflare said it had a separate agreement with Google Cloud Platform.

Nowhere in the post is there mention of AWS, though several reader comments questioned the absence of the dominant cloud provider.

In response to one such comment asking "what's going on" with the absence of AWS, Cloudflare's Matthew Prince said, "While AWS hasn't signed up yet, we're confident they'll do what's right for customers."

UK Reuters quoted Prince further in an article titled "Cloud firms take aim at Amazon with data pricing pact" that shed more light on the issue.

The article states:

The group aims to lure customers away from AWS -- the biggest cloud computing provider with $17.5 billion in revenue last year -- by challenging the AWS practice of allowing customers to move data into the AWS cloud for free but charging to move that data out.

"It's sort of the 'Hotel California,'" said Matthew Prince, the CEO of founding member Cloudflare, referring to the mythical hotel in a song by the band The Eagles where guests can check out any time they like but can never leave. "It's free to put your data in, but to get your data out, it costs a substantial amount of money. That creates a whole data gravity issue where data gets locked in the cloud."

To counter that, the companies will allow their mutual customers to move data between their services for free, or, in the case of Microsoft, for a discount of about 75 percent from the list prices. Alphabet Inc.'s Google Cloud also offers discounts through a previously established program with Cloudflare and others.

There has been no official comment from AWS on the new alliance, but Reuters reported the company has made similar deals with individual customers, such as Salesforce.com, which is integrating services with AWS.