Razors are cheap; razor blades aren’t. For companies renting server space from cloud providers like Amazon Web Services (AWS), Google Cloud, or Microsoft Azure, the razor blades are something called “data transfer,” “bandwidth,” or “egress” charges. They all describe the fees companies charge for moving data between cloud companies—such as serving web pages through content delivery networks (CDNs) like Akamai or switching from, say, Microsoft to Amazon cloud hosting.
“The cloud is sort of the Hotel California,” says Matthew Prince, CEO of San Francisco-based Cloudflare. “You can move your data into the cloud, but taking it out costs money.”
Now Cloudfare is forging a deal with other companies—called the “Bandwidth Alliance”—to eliminate or radically reduce these data transfer fees for those who are Cloudflare customers. In the process, Prince is expanding the definition of Cloudflare beyond a CDN and security provider to a “fabric” that connects all types of cloud companies. (Given that these companies are often “co-located” with servers and routers next to each other in datacenters, the connections can be straightforward.)
Prince reckons that the fee cuts will save Cloudflare’s current customers a total of $50 million per year.
A who’s who of cloud providers is joining the alliance, with the notable exception of AWS–although Prince says he’s been trying to convince the company to join. He also says that rival CDNs, like Akamai or Fastly, are welcome–preventing the Alliance from being just an attempt to drum up more Cloudflare business.
Cutting data transfer fees isn’t a Cloudflare invention, Prince admits. Google pioneered the practice with its CDN Interconnect program, which radically slashes costs between it and content delivery networks. Microsoft Azure is developing a cost-cutting program similar to Google’s.
Google isn’t technically part of the Bandwidth Alliance, says CLoudflare, although it touted the already-low prices of its Google arrangement in announcing the Alliance (confusing many journalists). Other big members include WordPress owner Automattic, Backblaze, Digital Ocean, Dreamhost, IBM Cloud, and Microsoft. The full list can be found in Cloudflare’s blog post announcing the alliance.
Correction: An earlier version of this article incorrectly stated that Google is part of the Bandwidth Alliance. We apologize for the error.