>The second, less known, reason is that between compute, storage and network, network is actually the hardest part to scale for cloud providers. Thus they need to find a way to incentive their customers to optimize their network usage by themselves. And what better motivation to optimize something than taking a huge chunk of your profits?
This doesn't really make sense as an explanation.
Cloud networking has two components:
1. The network connecting the datacentres to the internet (the datacentre edge infrastructure).
2. The network connecting the servers and virtual machines to that edge.
1 is a solved problem and the variable costs are going to be based on any transit connections used. What cloud providers charge for bandwidth here is out of proportion to that, and they don't bill for ingress anyway, so this makes no sense.
2 is a technically more complex area, except it's very clear that getting people to use this infrastructure less is not the motivation because cloud providers don't charge for intra-DC traffic. You can ferry data around between servers in the same AZ as much as you like and not pay anything. The same is true of transferring data to and from e.g. S3 and EC2.
In other words, the more technically complex and sophisticated network component is the one which isn't billed at all. Meanwhile, boring internet connectivity is billed at an exorbitant rate, but only in one direction.
It's really quite obvious at this point that the motivation is vendor lock-in. You are penalised if you take data out of a big cloud provider but not to put data in. This means as soon as you put anything in AWS you are suddenly motivated to do as much in AWS as possible.
This is fundamentally anti-competitive. If AWS starts offering some infrastructure service, it can offer free bandwidth to that service for its own customers, but some third party providing a comparable service can't, at least unless it also starts using AWS.
But that's not even the best of it. If you want even better proof that these charges are BS, just look at Snowball. This is a service where you can transfer data to S3 by having AWS mail you a hard drive. Amazingly, they have the gall to charge per GB for this in addition to the fixed fee you pay... but only for exporting data.
In other words, I can pay $150 and get loaned a SSD, fill it up with 14TB of data and import that data to S3. If I pay $300 to get data out of S3, I also pay $0.03/GB. Internet transit is not even involved here!
It is pure anti-competitive lock-in. It's also really against the principles of the internet, in that the internet couldn't have developed as it did if we accepted different billing for communicating with different IPs (can you imagine "I don't want to send traffic to a foreign IP, I'll pay international rates!"). Yet cloud providers work on this principle. If you think about it it is effectively a net neutrality violation, just not on the part of residential ISPs - they charge you less to communicate with their own services than with others (zero-rating).
This doesn't really make sense as an explanation.
Cloud networking has two components:
1. The network connecting the datacentres to the internet (the datacentre edge infrastructure).
2. The network connecting the servers and virtual machines to that edge.
1 is a solved problem and the variable costs are going to be based on any transit connections used. What cloud providers charge for bandwidth here is out of proportion to that, and they don't bill for ingress anyway, so this makes no sense.
2 is a technically more complex area, except it's very clear that getting people to use this infrastructure less is not the motivation because cloud providers don't charge for intra-DC traffic. You can ferry data around between servers in the same AZ as much as you like and not pay anything. The same is true of transferring data to and from e.g. S3 and EC2.
In other words, the more technically complex and sophisticated network component is the one which isn't billed at all. Meanwhile, boring internet connectivity is billed at an exorbitant rate, but only in one direction.
It's really quite obvious at this point that the motivation is vendor lock-in. You are penalised if you take data out of a big cloud provider but not to put data in. This means as soon as you put anything in AWS you are suddenly motivated to do as much in AWS as possible.
This is fundamentally anti-competitive. If AWS starts offering some infrastructure service, it can offer free bandwidth to that service for its own customers, but some third party providing a comparable service can't, at least unless it also starts using AWS.
But that's not even the best of it. If you want even better proof that these charges are BS, just look at Snowball. This is a service where you can transfer data to S3 by having AWS mail you a hard drive. Amazingly, they have the gall to charge per GB for this in addition to the fixed fee you pay... but only for exporting data.
In other words, I can pay $150 and get loaned a SSD, fill it up with 14TB of data and import that data to S3. If I pay $300 to get data out of S3, I also pay $0.03/GB. Internet transit is not even involved here!
It is pure anti-competitive lock-in. It's also really against the principles of the internet, in that the internet couldn't have developed as it did if we accepted different billing for communicating with different IPs (can you imagine "I don't want to send traffic to a foreign IP, I'll pay international rates!"). Yet cloud providers work on this principle. If you think about it it is effectively a net neutrality violation, just not on the part of residential ISPs - they charge you less to communicate with their own services than with others (zero-rating).