Hidden Costs in Cloud Data Egress Pricing

Cloud data egress fees can quietly inflate your cloud bills. They are the charges you pay when data leaves your cloud provider's network, whether for transfers to on-premises systems, other cloud regions, or the internet. While uploading data is free, pulling it out can be costly and unpredictable.

Here’s what you need to know:

• Egress fees often lack transparency. Many UK businesses are caught off guard by these charges, which can account for up to 15% of total cloud costs.
• Common culprits: Transfers between cloud regions, compliance-driven data movement, and AI or analytics workloads are major contributors.
• Cost impact: A UK business transferring 50 TB monthly could face bills up to £3,600 with major providers, while smaller providers may charge nothing.
• Solutions: Use monitoring tools, optimise cloud architecture, and consider expert consultants to manage and reduce these costs.

Understanding and managing these fees is critical to keeping cloud spending under control, especially as global cloud usage continues to grow.

Reducing cloud egress charges: 10 common pitfalls and how to avoid them [Cloud Masters #121]

How Cloud Data Egress Pricing Works

Grasping how cloud providers calculate data egress fees is essential to avoid surprise charges. While the pricing might seem simple at first glance, the reality is far more intricate.

How Egress Fees Are Calculated

Cloud providers rely on sophisticated systems to measure every byte of data leaving their networks. At the end of each billing cycle, they total up all outbound data and apply their pricing tiers. Typically, egress volume is aggregated across all regions, and many providers offer a limited free tier as a starting point [2].

For example, as of June 2023, AWS allows 100 GB of free data transfer via S3 (excluding data stored in China and GovCloud regions) [4]. Beyond this, a tiered pricing model applies: the first 10 TB per month costs £0.09 per GB, the next 40 TB is priced at £0.085 per GB, the next 100 TB at £0.07 per GB, and anything over 150 TB is charged at £0.05 per GB [4]. Similarly, Azure offers the first 100 GB of outbound traffic for free, with additional data costing about £0.087 per GB [2]. Oracle Cloud Infrastructure, on the other hand, provides a much larger free allowance of 10 TB per month [2].

The cost of data transfer also depends on where it’s going. For instance, AWS charges £0.01 per GB for data moved between Availability Zones within the same region [4]. Azure imposes fees for traffic between connected virtual networks, even if they’re in the same region [2].

These detailed calculations highlight the complexity behind egress pricing.

Why Pricing Models Lack Transparency

The intricacies of egress pricing often result in unexpected bills. Costs may only become evident once systems are fully operational [5]. Variables like data volume, destination, and frequency of transfers make it challenging to predict and budget accurately [5]. For instance, a database sync that works fine during testing could rack up significant charges when scaled to production. Regional pricing differences further complicate estimates [5]. Transfers between systems can also bring unforeseen expenses.

Unraveling the Complexity of Cloud Egress Charges...Cloud egress charges, often overshadowed by the spotlight on compute and data storage costs, represent the fees incurred when data leaves a cloud provider's network. - Sanjay Kumar [5]

The financial impact of these charges can be considerable. Unexpected egress fees can inflate overall cloud costs and disrupt ROI calculations [5]. According to IDC, enterprises transferring petabytes of data multiple times a year sometimes face fees amounting to tens of thousands of pounds [5]. Critics argue that high egress costs are a tactic to discourage switching providers, labelling them as a data tax that hinders migration [6]. In fact, 56% of IT professionals view these charges as excessive [7].

We can't optimise what we can't understand. - Marc Suidan, Chief Financial Officer, Backblaze [7]

Navigating this pricing requires a thorough understanding of both application architecture and cloud infrastructure [1]. Unfortunately, many businesses only uncover the true cost of data transfers after committing to cloud setups that are difficult and expensive to modify.

This understanding is key to identifying the common culprits behind hidden data egress costs.

Common Causes of Hidden Data Egress Costs

Hidden egress costs can sneak up on businesses, turning seemingly manageable cloud expenses into hefty bills. By identifying the common culprits behind these charges, organisations can plan better and avoid unpleasant surprises. Let’s break down the main scenarios where these costs tend to spike.

Inter-Region and Inter-Zone Transfers

One major source of unexpected egress charges is moving data between different regions or availability zones, even within the same cloud provider’s network. These transfers can incur significant fees, often overlooked during the initial planning of cloud architecture.

For instance, AWS charges approximately £0.007 per GB for data transfers between Availability Zones within the same region. However, cross-region transfers come with a much steeper price tag - about £0.063 per GB for both the source and destination egress costs [8][3]. Similarly, Microsoft Azure charges around £0.007 per GB for intra-region transfers but increases to £0.014 per GB for cross-region transfers between North America and Europe [3]. Google Cloud Platform follows a similar pattern, with £0.007 per GB for transfers on the same continent, but intercontinental transfers can range from £0.056 to £0.084 per GB [3].

These fees add up quickly, especially in complex setups. According to IDC research, about 6% of cloud storage costs stem from planned and unplanned egress charges [3]. Misconfigurations can make matters worse, such as connecting to the wrong endpoint of a geo-replicated storage account or routing traffic over the internet instead of internal endpoints. Inefficient processes like poorly designed synchronisation or backup workflows also contribute to escalating costs.

But it’s not just technical missteps - compliance and regulatory requirements can also drive these charges.

Regulatory and Business Requirements

Compliance with data residency laws often forces businesses to move data across regions, leading to unavoidable egress costs. These laws dictate that data must be stored and processed in specific physical locations, which can result in costly transfers. For example, in 2020, Microsoft faced complications when the U.S. government demanded access to data stored in an Irish data centre. This request conflicted with European GDPR protections, highlighting how jurisdictional clashes can inflate costs [9][10].

Expanding into new markets can further complicate matters. Countries with strict data localisation laws require citizen data to remain within their borders, forcing businesses to fragment their cloud infrastructure across multiple regions. This fragmentation not only increases operational complexity but also drives up costs as companies invest in region-specific data centres. With stricter data protection laws on the rise, these expenses are expected to grow. In fact, by 2027, over 75% of enterprises are predicted to adopt multi-cloud strategies, which often involve more intricate data transfer patterns to stay compliant [11].

Beyond compliance, certain workloads - like those involving AI and analytics - can also lead to substantial egress fees.

AI and Analytics Workloads

Artificial intelligence and big data analytics often require moving massive datasets between locations for processing, analysis, or training machine learning models. These large-scale data transfers can result in significant egress costs, which organisations frequently underestimate. For example, machine learning workflows involve repeated data movements as teams refine and test their models, driving up expenses.

Analytics workloads can also create cost challenges. Business intelligence systems often pull data from multiple sources, creating complex data flows that rack up egress fees at various points. Real-time analytics, which require constant data streaming between storage and processing systems, can further amplify these charges.

The problem becomes even more pronounced when businesses lack visibility into their data usage. Without proper monitoring, it’s difficult to identify high-cost processes or implement cost-saving measures like compression, deduplication, or architectural adjustments [3]. Many organisations only realise the extent of these costs after scaling up their AI and analytics operations, making it harder - and more costly - to course-correct later.

Recognising these common cost drivers is a critical step toward managing cloud expenses effectively.

How to Reduce Egress Costs

Cutting down on hidden egress costs starts with accurate cost tracking and making smart architectural choices. When needed, bringing in expert help can make a big difference. Here are three practical strategies UK organisations can use to get a handle on their cloud spending.

Use Monitoring Tools to Gain Cost Clarity

The first step in managing egress costs is knowing exactly where your money is going. A recent study highlights how IT teams are grappling with rising cloud storage expenses. Without proper visibility, these costs can quickly spiral out of control.

Cloud cost monitoring tools provide real-time insights, helping to spot problematic data transfer patterns before they become costly surprises. Many of these platforms leverage AI and machine learning to analyse usage trends, flag anomalies, and predict future expenses. The trick is to select tools that offer detailed visibility into data transfer costs, rather than just giving a broad overview of cloud spending.

Real-world examples show the power of monitoring. Complyt managed to slash their total AWS costs by 40% in just one hour using a monitoring tool. Similarly, Stitch Fix used Datadog Cloud Cost Management to allocate spending across multiple accounts and achieve savings.

Datadog Cloud Cost Management helped us attribute spend over dozens of accounts to achieve savings.
– Martin Amps, Stitch Fix

Good monitoring tools often include resource tagging features, allowing you to track expenses by department, project, or application. Regularly generating detailed cost reports can help you understand where your cloud budget is going and identify areas for improvement. Once you’ve established visibility, the next step is to fine-tune your cloud architecture.

Optimise Your Cloud Architecture

Making smart architectural choices can significantly cut down on unnecessary data movement - and the costs that come with it. The idea is straightforward: keep related data and services as close together as possible. This is crucial, as data transfer costs can make up a substantial portion of monthly AWS bills.

One effective strategy is to keep data transfers within the same region whenever possible, as cross-region transfers are much pricier. If multiple regions are necessary for compliance or performance reasons, plan carefully to minimise unnecessary data movement.

Within a single region, avoid excessive transfers between availability zones. Using private IP addresses for intra-region transfers and setting up VPC endpoints to keep traffic within the cloud provider’s network can also help bring costs down. Additionally, tools like Content Delivery Networks (CDNs) can lower outbound data transfer costs by caching frequently accessed content closer to users. Cloud storage gateways are another option, enabling efficient caching and syncing to reduce data movement.

For example, a North American engineering and construction company saved approximately £6.9 million by using Resilio to sync data for their hybrid cloud VDI, avoiding costly cross-region transfers. When optimisation becomes complex, expert assistance can take your strategies to the next level.

Partner with Cloud Cost Consultants

Sometimes, the best move is to call in the experts. Cloud cost consultants bring specialised knowledge that in-house teams might not have, especially when dealing with the complexities of egress pricing across different providers and regions.

These consultants identify inefficiencies that might otherwise go unnoticed. They provide tailored strategies and metrics to control costs while maintaining performance. Importantly, they also embed cost-saving practices within your team to ensure long-term benefits.

The impact of their work is clear. Capacitas reports that their clients typically see a 20% to 70% reduction in cloud spend through optimisation services. For instance, Cegid managed to cut their cloud costs by €6 million per year while increasing their subscriber base by 27%.

For UK organisations, firms like Hokstad Consulting offer specialised services to reduce expenses by 30–50%. Their flexible engagement models, including a no savings, no fee approach, ensure that their fees are tied to the savings they deliver.

Capacitas came back with a plan to us that reached from initial optimisation to constant compliance, something we considered very important, because a mistake we have seen with many cloud migration programs is that after a phase of optimisation they simply vanish because the figures look good! However, if you do that in a year or two from when that program ends, you will find yourself \[in\] the same situation you started with.
– Martin Kersch, CTO JAGGAER

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Cloud Provider Egress Pricing Comparison

For UK businesses, understanding how cloud providers structure their egress pricing is essential to avoid unwelcome surprises on their bills. The costs associated with transferring data out of cloud platforms can vary widely, from some providers offering free egress to others charging substantial fees for high-volume transfers.

The major cloud providers - AWS, Microsoft Azure, and Google Cloud Platform - follow similar pricing models. For instance, AWS charges around £0.072 per GB for the first 10 TB after a 100 GB free allowance. Azure also includes a 100 GB free tier, with a slightly lower cost of about £0.070 per GB beyond that. Google Cloud Platform stands out with a larger free tier of 200 GB per month, followed by a charge of approximately £0.068 per GB.

These fees have earned the nickname racket tax in the industry. Alexandre from Finops explains:

Egress costs can represent an important part of your cloud bill... Many consider it as a 'racket tax'. [12]

Despite falling internet transit costs, hyperscalers maintain high margins on egress fees, which discourages users from moving their data elsewhere.

In contrast, smaller cloud providers adopt a more cost-friendly approach. OVHcloud and Scaleway, for example, offer unlimited free egress for most services. Hetzner provides generous allowances of 20–60 TB depending on the plan, with additional data costing as little as £0.00089 per GB. Digital Ocean, while more expensive than some European competitors, charges only about £0.008 per GB.

Provider Pricing Structure Comparison Table

The cost differences become striking when applied to real-world scenarios. For a UK business transferring 50 TB of data each month, the choice of provider could mean paying nothing or facing a hefty bill of around £3,600.

This table highlights the stark contrast in pricing across providers. It also underscores the importance of transparency in billing. Google Cloud, for example, has earned praise for its clear billing practices, including per-second billing and automatic sustained-use discounts. Oracle Cloud Infrastructure also stands out with its straightforward model, offering 10 TB free each month followed by flat rates. On the other hand, major hyperscalers often bury costs within complex tiered pricing structures, making it harder for businesses to predict expenses.

In a notable shift, AWS, Azure, and Google Cloud announced in 2024 that they would no longer charge egress fees for customers migrating data off their platforms. This change, driven by regulatory pressure, applies only to migration scenarios and not to regular operations.

For UK businesses, the decision often comes down to balancing features with costs. Hyperscalers offer advanced services and global reach, but smaller providers can deliver substantial savings on egress fees. A multi-cloud strategy - using cost-effective platforms for frequently accessed data while relying on hyperscalers for specialised tasks - can help businesses optimise their cloud spending.

The bottom line? Businesses need to analyse their data usage patterns and calculate the total cost of ownership, factoring in both compute and data transfer expenses. A thorough understanding of these elements can help avoid unexpected costs and make smarter, more informed decisions.

Conclusion: Managing Data Egress Costs Effectively

Effectively managing cloud data egress costs involves a thoughtful and proactive approach that blends technical know-how with consistent oversight. Since pricing models differ across providers, businesses must carefully evaluate their setups to avoid unexpected expenses.

Research shows that poorly optimised egress fees can account for up to 30% of wasted cloud expenditure, with egress charges typically making up around 6% of total storage costs [3][13][14]. For many organisations, this presents a clear opportunity for cost reduction.

Continuous monitoring plays a key role in tackling these expenses. Understanding how data movement impacts egress costs is especially critical during cloud migrations [2]. Despite investments in cloud financial management tools like FinOps, nearly 53% of organisations report insufficient visibility into their cloud spending [15]. This underscores the ongoing challenge of maintaining control over these costs.

Once internal processes are refined, seeking external expertise can further optimise cost management. Specialists, such as Hokstad Consulting, offer tailored solutions to help organisations navigate complex multi-cloud setups. By leveraging their expertise in cloud cost engineering, businesses can achieve substantial savings without sacrificing performance.

Managing egress costs should be treated as a continuous strategy rather than a one-time fix. Successful organisations adopt a mix of technical and operational measures, such as designing systems with data locality in mind, using caching to limit redundant transfers, applying compression to reduce data size, and setting up dedicated network connections for high-volume data flows [17]. Additionally, regular audits, cost alerts, and proper resource tagging enhance visibility and enable precise cost attribution [14].

Cloud data egress costs depend on application architecture. By designing systems with data egress in mind and taking advantage of certain technologies, organisations can reduce costs. [2]

With global public cloud spending expected to exceed £720 billion by 2025 [16], businesses that prioritise egress cost management now will gain a lasting competitive edge. Combining architectural best practices, continuous oversight, and expert guidance creates a strong foundation for controlling these often-overlooked expenses while ensuring high performance and reliability.

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