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It's absolutely price gouging. I'm not going to rant about this for the 100th time, but at least I'm in good company [0]. Do the math on the cost you pay if you

It's absolutely price gouging. I'm not going to rant about this for the 100th time, but at least I'm in good company [0]. Do the math on the cost you pay if you saturate 1gbps for a month vs. the cost you pay for 1gbps IP transit at basically any colocation provider. Really this is the secret sauce of the cloud. Create new abstraction layers where you can charge for logical separation on a physical basis. First VMs, then containers, then serverless... Would be cool if somebody did it with bandwidth (looking at you, Cloudflare). Why can't I buy an elastically sized pipe? Why do I need to pay for the stuff I put through it instead of reserving a size for the time I'll need it? [0] https://twitter.com/eastdakota/status/1371252709836263425 https://twitter.com/eastdakota/status/1371252709836263425

maximente 6y ago
boy howdy, with all the flak i hear about this and the awesome talent in tech, you'd figure an entrepreneur or 1000 would take a stab at this, make it better, charge less. apparently there's gazillions to be made by even charging 50 percent of what AWS does. so, when should we expect this gloriously efficient competitive market to kick in to action? my guess is that the AWS ecosystem, despite "price gouging", is simply the best and will be because this is really hard, non-glorious engineering, where solid reliability actually matters. anyone who wants to can go ahead and co-lo, so, whatever. people who want cloud will pay, and those who can't or won't, will not.
- manigandham 6y ago
  You're replying to a comment that includes a tweet from the CEO of Cloudflare, which is quite literally providing that competition with free bandwidth and an increasing suite of computing products. There are plenty of other platforms as well, like Digitalocean, that have much lower bandwidth pricing.
- Dylan16807 6y ago
  What competitive market? Nobody else can give you bandwidth out of Amazon data centers. Amazon's advantage is having a ton of services that work together, and they take advantage of it to price gouge on bandwidth. If you're buying a standalone CDN service you can get massively better rates.
- lostcolony 6y ago
  Your point that "AWS has a bunch of other benefits to where people just accept the bandwidth costs so they can leverage those other benefits" doesn't actually counter the original claim that "the bandwidth costs are outrageously overpriced".
- toast0 6y ago
  There's tons of businesses that are happy to charge less for bandwidth; so it's clear Amazon (and some of the other high tier cloud services) are overcharging on this maybe by a factor of 10, although since transit bits are not all equal, someone with more detail could make a case that the overcharging is less. It's easyish to compete on bandwidth costs, but Amazon has a lot of other features many people want; it's harder to replicate all of those, especially the part about having a long history of operating such services and not making a lot of changes to make things more expensive or otherwise more difficult. Having to pay a much higher than market price for an easily replaced good in order to get a good that's less easily replaced is textbook anti-competive bundling. If your bandwidth usage is high enough, maybe it makes sense to send it all through AWS direct connect, and pay for transit yourself; although even then, the AWS direct pricing seems a bit high.
  - VectorLock 6y ago
    This is like going to a fancy restaurant and being upset that they charge so much for a steak when you can get beef at the supermarket for much less.
    - stefan_ 6y ago
      If you ask the fancy restaurant to cater a steak dinner for 1000 people they will charge you a lot closer to supermarket beef. The point is that if you charge absurd prices for what has basically no marginal cost your pricing model is broken and 1) you are excluding customers that are particularly sensitive to this price or 2) you are liable to undercharge other customers that primarily use other services for which you are not charging what it costs you to provide. For AWS, given the generally inflated prices, it's probably a lot more of 1) than 2).
      - VectorLock 6y ago
        As I explained in another commented AWS wants to disincentivize dumb bandwidth usage. They want you to use your bandwidth for traffic that needs it to EC2, and you get much better rates for static data from CDNs, S3, etc.
sofixa 6y ago
That Twitter thread is only including pure bandwidth. What about all the highly redundant networking equipment ( firewalls, routers, switches, Nitro offloading, DDoS protection, attack detection), software for all those abstractions you get ( VPCs, subnets, security groups, vpc peerings, Elastic IPs etc. ) and engineers? None of what i listed you pay for directly, and bandwidth seems to be the most reasonable product to lump it all in. It's like going to a restaurant and complaining about the price of steaks because beef should cost a lot less. There's a ton of other things involved, and yes, they probably have a decent margin, but not as much as you initially imply.
- pas 6y ago
  AWS has advantage due to economies of scale. (And naturally some disadvantages and challenges due to sheer size, which increases fixed costs, but that means that they can't easily downsize, which doesn't apply since they are still growing at an incredible rate.) So they should be able to reach the lowest amortized cost for bandwidth with all of those costs included. They price bandwidth so high because they can and they are still growing.
ikiris 6y ago
You're free to go build your own cloud and sell it for cheaper. I'll wait.

maximente 6y ago

boy howdy, with all the flak i hear about this and the awesome talent in tech, you'd figure an entrepreneur or 1000 would take a stab at this, make it better, charge less. apparently there's gazillions to be made by even charging 50 percent of what AWS does. so, when should we expect this gloriously efficient competitive market to kick in to action? my guess is that the AWS ecosystem, despite "price gouging", is simply the best and will be because this is really hard, non-glorious engineering, where solid reliability actually matters. anyone who wants to can go ahead and co-lo, so, whatever. people who want cloud will pay, and those who can't or won't, will not.

manigandham 6y ago
You're replying to a comment that includes a tweet from the CEO of Cloudflare, which is quite literally providing that competition with free bandwidth and an increasing suite of computing products. There are plenty of other platforms as well, like Digitalocean, that have much lower bandwidth pricing.
Dylan16807 6y ago
What competitive market? Nobody else can give you bandwidth out of Amazon data centers. Amazon's advantage is having a ton of services that work together, and they take advantage of it to price gouge on bandwidth. If you're buying a standalone CDN service you can get massively better rates.
lostcolony 6y ago
Your point that "AWS has a bunch of other benefits to where people just accept the bandwidth costs so they can leverage those other benefits" doesn't actually counter the original claim that "the bandwidth costs are outrageously overpriced".
toast0 6y ago
There's tons of businesses that are happy to charge less for bandwidth; so it's clear Amazon (and some of the other high tier cloud services) are overcharging on this maybe by a factor of 10, although since transit bits are not all equal, someone with more detail could make a case that the overcharging is less. It's easyish to compete on bandwidth costs, but Amazon has a lot of other features many people want; it's harder to replicate all of those, especially the part about having a long history of operating such services and not making a lot of changes to make things more expensive or otherwise more difficult. Having to pay a much higher than market price for an easily replaced good in order to get a good that's less easily replaced is textbook anti-competive bundling. If your bandwidth usage is high enough, maybe it makes sense to send it all through AWS direct connect, and pay for transit yourself; although even then, the AWS direct pricing seems a bit high.
- VectorLock 6y ago
  This is like going to a fancy restaurant and being upset that they charge so much for a steak when you can get beef at the supermarket for much less.
  - stefan_ 6y ago
    If you ask the fancy restaurant to cater a steak dinner for 1000 people they will charge you a lot closer to supermarket beef. The point is that if you charge absurd prices for what has basically no marginal cost your pricing model is broken and 1) you are excluding customers that are particularly sensitive to this price or 2) you are liable to undercharge other customers that primarily use other services for which you are not charging what it costs you to provide. For AWS, given the generally inflated prices, it's probably a lot more of 1) than 2).
    - VectorLock 6y ago
      As I explained in another commented AWS wants to disincentivize dumb bandwidth usage. They want you to use your bandwidth for traffic that needs it to EC2, and you get much better rates for static data from CDNs, S3, etc.

sofixa 6y ago

That Twitter thread is only including pure bandwidth. What about all the highly redundant networking equipment ( firewalls, routers, switches, Nitro offloading, DDoS protection, attack detection), software for all those abstractions you get ( VPCs, subnets, security groups, vpc peerings, Elastic IPs etc. ) and engineers? None of what i listed you pay for directly, and bandwidth seems to be the most reasonable product to lump it all in. It's like going to a restaurant and complaining about the price of steaks because beef should cost a lot less. There's a ton of other things involved, and yes, they probably have a decent margin, but not as much as you initially imply.

pas 6y ago
AWS has advantage due to economies of scale. (And naturally some disadvantages and challenges due to sheer size, which increases fixed costs, but that means that they can't easily downsize, which doesn't apply since they are still growing at an incredible rate.) So they should be able to reach the lowest amortized cost for bandwidth with all of those costs included. They price bandwidth so high because they can and they are still growing.

ikiris 6y ago

You're free to go build your own cloud and sell it for cheaper. I'll wait.