David Heinemeier Hansson

January 11, 2024

Google Cloud cuts egress and promotes cloud exits

The absurd egress fees charged by major hyperscalers have been one of the biggest impediments for companies to leave the cloud. We’ve been preparing for our own departure from AWS S3 at 37signals, and the price for taking our data elsewhere is in the crazy-land region of $300,000-$400,000! So imagine my surprise seeing the announcement that Google is doing away with the extortionate egress fee entirely for GCP.

The change is effective immediately:

Starting today, Google Cloud customers who wish to stop using Google Cloud and migrate their data to another cloud provider and/or on premises, can take advantage of free network data transfer to migrate their data out of Google Cloud. This applies to all customers globally.

But as shocking as the fact that Google is dropping the egress racket is, I'm almost more stunned to see them recognizing its benefit for those leaving the cloud in addition to those moving between competitors. I wouldn’t have guessed that the cloud exit discourse, which only really gained steam in 2023, would already be influencing one of the three major hyperscalers!

Now I don’t know how many people will actually buy the idea that Google is just doing this out of the goodness of their heart. I have two other theories:

  1. The European Union has been looking at cloud egress fees as an anti-competitive practice, which they may well seek to regulate to improve competition in public clouds. Given how much other anti-trust scrutiny that Google is under, it makes sense for them to get ahead of regulations for once. Especially if it helps deflect attention from their search or ad monopolies.
  2. Google is a distant third in the cloud wars, and they stand to gain far more from goading competitors into following suit than they’ll lose on their end. For Google to win more cloud business, they probably realize they have to start stealing marketshare from Azure and AWS, and that’s just hard to do if egress fees spoil the pitches.

But who cares! I commend Google for doing this, regardless of whatever ulterior motives or self-interest is guiding it. Cutting the egress racket absolutely will improve competition in the cloud and make it easier for companies to leave it entirely. That’s good. Very good.

About David Heinemeier Hansson

Made Basecamp and HEY for the underdogs as co-owner and CTO of 37signals. Created Ruby on Rails. Wrote REWORK, It Doesn't Have to Be Crazy at Work, and REMOTE. Won at Le Mans as a racing driver. Fought the big tech monopolies as an antitrust advocate. Invested in Danish startups.