Key Insights to Data Egress Fees
- Major public cloud providers are now under regulatory pressure in the EU, U.K., and U.S. to make data exits easier and cheaper.
- The EU Data Act (in force from January 2024) will ban most egress fees by 2027, requiring interoperability and transparency.
- Cloud Vendors like AWS, Microsoft Azure, and Google Cloud are changing their policies—but only partially.
- Many enterprises remain locked in due to outdated contracts, use of proprietary services, and poor exit planning.
- Organization must proactively negotiate egress terms, design for portability, and create an actionable exit strategy.
Why Egress Fees Are Under the Microscope
As more enterprises adopt multi-cloud, hybrid, and AI-specific architectures, and hidden costs of cloud computing are surfacing. Chief among them: data egress fees—charges incurred when moving data out of a cloud provider’s ecosystem.
These fees are not just inconvenient. In large-scale systems, they can make it cost-prohibitive to leave, effectively locking enterprises into cloud vendors long past the point of value.
What are Data Egress Fees?
Data egress fees refer to the charges imposed by cloud providers when data is transferred out of their infrastructure. This includes:
- Moving data from cloud to on-premises
- Transferring data to another cloud provider
- Delivering large datasets to users over the internet.
Example Egress Fee Rates
| Cloud Provider | First 1 GB | 1–10 TB / month | 10–50 TB / month |
|---|---|---|---|
|
AWS |
Free |
$0.09/GB |
$0.085/GB |
|
Azure |
Free |
$0.087/GB |
$0.083/GB |
|
Google Cloud |
Free |
$0.12/GB |
$0.11/GB |
The Business Impact of Cloud Egress Fees
Enterprises that build on proprietary cloud services (e.g., AWS DynamoDB, Google Big Query) can face huge cost to migrate data and services elsewhere.
2. Migration Projects Stall
Companies that want to optimize costs or adopt new tech (life AI-specific hardware elsewhere) often find that egress costs make it too expensive to move.
3. Budget Shock
Many organizations don’t fully estimate exit on data migration costs. These can run into six or seven figures fro petabyte-scale operations.
Why Regular Are Getting Involved
Concerns around anti-competitive practices and barriers to market fluidity have led governments and trade commissions to take action.
European Union: The EU Data Act
- Enforced since January 2024
- By January 2027, cloud providers will be prohibited from charging switching/egress fees
- Interim rules: Any fees charged must reflect only direct costs (no markup)
United Kingdom: Cloud Market Investigation
- The UK’s Competition and Markets Authority (CMA) and Ofcom are investigating AWS and Azure specifically
- Proposed remedies include mandatory transparency, open interfaces, and fair exit policies
United States: FTC Scrutiny
- The Federal Trade Commission (FTC) is using Section 6(b) authority to investigate cloud lock-in
- Probing practices like:
- Egress pricing
- Restrictive licensing
- Committed spend discounts
How Cloud Providers are Responding
Cloud vendors have made public moves to avoid being labeled as monopolistic.
Microsoft Azure
- March 2024: Ended egress fees for customers leaving Azure
- Applied globally with notification and migration plans
- Focused on regulatory compliance under EU law »Source
Google Cloud
- January 2024: Waived fees for full exits to other clouds or on-prem
- Launched Data Transfer Essentials in EU/UK to support multicloud transfers
- Still requires users to fill out exit request forms »Source
AWS
- Offers fee waivers under specific scenarios (e.g., full migration + 60-day notice)
- Has not committed to removing egress fees universally
- Actively involved in EU discussions »Source
Why Enterprises Still Get Locked In
Despite these changes, many enterprises are still trapped by:
1. Old Contracts — Signed years ago with harsh egress terms and no exit protections
2. Proprietary Services — Deep integration with native tools (e.g., Lambda, Redshift) makes migration difficult
3. Lack Of Planning — Exit strategy wasn’t part of the cloud journey
4. Short-Term Cost Aversion — Moving away may save money long-term, but immediate costs are unbudgeted
7 Actions to Avoid Cloud Lock-In
To protect your enterprise, consider these strategic steps:
1. Renegotiate Contracts
- Include low or zero egress fees for migrations
- Demand portability rights
- Define acceptable exit processes and costs
2. Design for Portability
- Use containerized workloads (e.g., Docker, Kubernetes)
- Store data in open formats (Parquet, JSON, CSV)
- Avoid deep dependence on proprietary APIs
3. Use Multi-Cloud by Default
- Distribute workloads across providers
- Ensure redundancy and pricing flexibility
- Use abstraction layers (e.g., Terraform, Pulumi)
4. Establish a Cloud Exit Plan
- Document data volumes and architecture dependencies
- Set thresholds for when exit becomes preferable
- Test migration drills annually
5. Monitor Regulatory Developments
- Stay informed on EU data Act milestones
- Watch CMA and FTC activity
- Use compliance pressure in negotiation
6. Create an “Exit-Ready” Landing Zone
- Keep a fallback on-prem environment or secondary cloud
- Ensure team skills span multiple platforms
- Pre-stage data where possible to reduce transfer loads
7. Track All Migration Costs
- Include:
- Consultant fees
- DevOps time
- Security validation
- User retraining
- Calculate true all-in costs, not just egress charges
Cloud Exit Checklist
Before you commit to a cloud provider, ask yourself a question:
- Do we have clear egress pricing in writing?
- Is there a clause for fee waiver if we exit?
- Can we export all data in portable formats?
- Are we building with open-source tools?
- Do we have a budget for exit scenarios?
If you answered “no” to more than one, it’s time to reassess.
Final Thoughts: Think Beyond Egress Fees
The egress fee conversation isn’t just about money—it’s about freedom of choice. Enterprises must ensure their cloud strategy doesn’t become a trap. That means thinking ahead—legally, technically, and operational.
The tools are evolving. The regulations are coming. The question is:
Are you ready to leave when you need to?
