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This is exactly the type of intervention that crippled Europe's tech ecosystem. The cloud market is one of the most competitive in tech, with numerous strong an

This is exactly the type of intervention that crippled Europe's tech ecosystem. The cloud market is one of the most competitive in tech, with numerous strong and emerging players. In addition to established giants such as AWS, Azure, and GCP, there are also healthy second-tier players such as Cloudflare, Akamai, and Digital Ocean. I can also list more than a dozen new startups in the space that got money thrown at them. Furthermore, it's important to recognise that cloud companies struggle to lock in because of the competitive dynamics at play. You have 2 levers to pull, money and tech lock-in. You can't go far with money without quickly reaching diminishing returns. At the core you have compute, databases and object storage. All off these have been abstracted to a point where its very tricky to create lock-in without creating strong adverse reactions from customers. As someone who has been closely observing the industry for almost a decade, I have noticed a strong trend towards reduced lock-in.

amluto 4y ago
I’ll quote directly from the article: > High fees for transferring data out, committed spend discounts and technical restrictions are making it difficult for business customers to switch cloud provider or use multiple providers The technical restrictions are, as you say, not clearly creating lock-in. The committed spend discounts seem like a gray area. But the egress fees are no joke, and I consider them extremely anti-competitive.
- quesomaster9000 4y ago
  I don't see how committed spend discounts are different from contractual B2B pricing in every other industry. I can also see why egress bandwidth can be expensive for e.g. server farms, the contention ratio is (usually) significantly higher than it is for ingress. How would you propose PAYG/SaaS bandwidth pricing is altered to be more competitive, or for example Amazon Glacier retrieval is heinously expensive for retrieval but it's transparent and IMO has a fair reflection of the underlying costs involved.
  - amluto 4y ago
    I won’t argue with Glacier retrieval costs, although I don’t really believe they reflect actual costs. But I will argue with egress. AWS and its friends charge absolutely outrageous amounts for egress: https://blog.cloudflare.com/aws-egregious-egress/ https://blog.cloudflare.com/aws-egregious-egress/ And the fact that they have made no move to reduce pricing to compete with R2 suggests that they are not actually motivated by making a profit on egress. I strongly suspect that they are motivated by lock-in: AWS wants you to minimize egress costs my moving more services into AWS. And this includes third-party services. In a competitive market, services like Crunchy Data, Pinecone, and Snowflake would ordinarily be hosted in their own datacenters or in colocation facilities, and customers would pay a hefty premium to use an AWS, Google or Azure version. But, since egress fees mean that a non-big-cloud variant can’t possibly be cost-effective for customers, these services don’t bother to offer. (And they can’t even be usefully competitive across clouds. If Azure wants to attract companies like Snowflake, reducing the amount they charge for storage and compute is entirely useless.) I don’t know how to regulate this properly, but a price cap at some low (and ever-falling) figure wouldn’t be so horrible. Or requiring that egress be billed at the same rate as local traffic. (Although 100Gbps of same-rack traffic is cheap, whereas 100Gbps of egress is genuinely fairly expensive.) As an aside: having recently priced Glacier vs commodity hardware, Glacier is reasonably priced for monthly storage but not particularly cheap. I suspect it exists in part to make customers feel better about moving large amounts of data into the cloud. AWS could likely still make a profit on it if the retrieval fee were decreased by a factor of 10. If I wanted to store a few hundred TB and access it a couple times a year, especially if that access is from outside AWS, then storing an on-prem copy is less expensive, and the best option may be an on-prem copy plus an archive in Glacier for disaster recovery.
- Closi 4y ago
  The technical restrictions point is more on IaaS services which may generate lock-in. i.e. If a company builds a lot of their infrastructure on Azure Cosmos can they easily move across to a smaller cloud provider?
- pc_edwin 4y ago
  At best you can say, its an unnecessary burden which is artificially created with the purpose of dissuading customers from leaving. Only a small group of cloud customers would find this "burden" meaningful enough in monetary terms to even generate a report. In my view, this does not rise to the level of severity, scale, or type that would warrant regulatory intervention. I believe the difference of opinion is political in nature, I'm fundamentally opposed to the government taking a kingmaker/referee role in the free market. This is why I abhor the three letter agencies in America, especially the financial ones. These regulators especially in Europe are given immense power to arbitrarily decide whats right/wrong.
pc_edwin 4y ago
Regarding the political aspect, I strongly disagree with the notion of attacking these companies just for the sake of being actually really good (and big). The EU alternatives are notably inferior, they constantly find themselves playing catch-up, which could be attributed to a weaker anti-tech ecosystem. The tech giants in America are able to innovate at a rapid pace due to a robust ecosystem that encourages experimentation and dogfooding. Google, for example, developed MapReduce and Kubernetes out of necessity, while Amazon and Microsoft also heavily rely on their in-house innovations. You can make a similar argument with Cloudflare and Akamai, these offerings were not only welcomed, they needed to exist in the American tech ecosystem. You see similar ecosystem dynamics at play in China with hardware.
InCityDreams 4y ago
>This is exactly the type of intervention that crippled Europe's tech ecosystem. ...could be read as the "UK is in Europe." It's not, of course. Ofcom means nothing to us over here. Though I'm sure it'll be watched, and learned from.

amluto 4y ago

I’ll quote directly from the article: > High fees for transferring data out, committed spend discounts and technical restrictions are making it difficult for business customers to switch cloud provider or use multiple providers The technical restrictions are, as you say, not clearly creating lock-in. The committed spend discounts seem like a gray area. But the egress fees are no joke, and I consider them extremely anti-competitive.

quesomaster9000 4y ago
I don't see how committed spend discounts are different from contractual B2B pricing in every other industry. I can also see why egress bandwidth can be expensive for e.g. server farms, the contention ratio is (usually) significantly higher than it is for ingress. How would you propose PAYG/SaaS bandwidth pricing is altered to be more competitive, or for example Amazon Glacier retrieval is heinously expensive for retrieval but it's transparent and IMO has a fair reflection of the underlying costs involved.
- amluto 4y ago
  I won’t argue with Glacier retrieval costs, although I don’t really believe they reflect actual costs. But I will argue with egress. AWS and its friends charge absolutely outrageous amounts for egress: https://blog.cloudflare.com/aws-egregious-egress/ https://blog.cloudflare.com/aws-egregious-egress/ And the fact that they have made no move to reduce pricing to compete with R2 suggests that they are not actually motivated by making a profit on egress. I strongly suspect that they are motivated by lock-in: AWS wants you to minimize egress costs my moving more services into AWS. And this includes third-party services. In a competitive market, services like Crunchy Data, Pinecone, and Snowflake would ordinarily be hosted in their own datacenters or in colocation facilities, and customers would pay a hefty premium to use an AWS, Google or Azure version. But, since egress fees mean that a non-big-cloud variant can’t possibly be cost-effective for customers, these services don’t bother to offer. (And they can’t even be usefully competitive across clouds. If Azure wants to attract companies like Snowflake, reducing the amount they charge for storage and compute is entirely useless.) I don’t know how to regulate this properly, but a price cap at some low (and ever-falling) figure wouldn’t be so horrible. Or requiring that egress be billed at the same rate as local traffic. (Although 100Gbps of same-rack traffic is cheap, whereas 100Gbps of egress is genuinely fairly expensive.) As an aside: having recently priced Glacier vs commodity hardware, Glacier is reasonably priced for monthly storage but not particularly cheap. I suspect it exists in part to make customers feel better about moving large amounts of data into the cloud. AWS could likely still make a profit on it if the retrieval fee were decreased by a factor of 10. If I wanted to store a few hundred TB and access it a couple times a year, especially if that access is from outside AWS, then storing an on-prem copy is less expensive, and the best option may be an on-prem copy plus an archive in Glacier for disaster recovery.
Closi 4y ago
The technical restrictions point is more on IaaS services which may generate lock-in. i.e. If a company builds a lot of their infrastructure on Azure Cosmos can they easily move across to a smaller cloud provider?
pc_edwin 4y ago
At best you can say, its an unnecessary burden which is artificially created with the purpose of dissuading customers from leaving. Only a small group of cloud customers would find this "burden" meaningful enough in monetary terms to even generate a report. In my view, this does not rise to the level of severity, scale, or type that would warrant regulatory intervention. I believe the difference of opinion is political in nature, I'm fundamentally opposed to the government taking a kingmaker/referee role in the free market. This is why I abhor the three letter agencies in America, especially the financial ones. These regulators especially in Europe are given immense power to arbitrarily decide whats right/wrong.

pc_edwin 4y ago

Regarding the political aspect, I strongly disagree with the notion of attacking these companies just for the sake of being actually really good (and big). The EU alternatives are notably inferior, they constantly find themselves playing catch-up, which could be attributed to a weaker anti-tech ecosystem. The tech giants in America are able to innovate at a rapid pace due to a robust ecosystem that encourages experimentation and dogfooding. Google, for example, developed MapReduce and Kubernetes out of necessity, while Amazon and Microsoft also heavily rely on their in-house innovations. You can make a similar argument with Cloudflare and Akamai, these offerings were not only welcomed, they needed to exist in the American tech ecosystem. You see similar ecosystem dynamics at play in China with hardware.

InCityDreams 4y ago

>This is exactly the type of intervention that crippled Europe's tech ecosystem. ...could be read as the "UK is in Europe." It's not, of course. Ofcom means nothing to us over here. Though I'm sure it'll be watched, and learned from.