Amazon And Google Decide To Abolish Cloud Conversion Fees

As global giant cloud service companies (CSPs) such as Amazon and Google decide to abolish cloud conversion fees, attention is being paid to the impact it will have on the domestic market. The Big 3 CSPs, also called ‘hyperscalers’, are Amazon Web Services (AWS), Microsoft (MS), and Google Cloud. They have been paying a certain fee to customers moving to on-premises or competitors’ clouds in the name of data transmission costs. has been imposed However, AWS, which is protecting the throne of the cloud, announced on the 6th that it will no longer charge conversion fees to customers who move data from AWS servers to Microsoft Azure or Google Cloud.

Among the Big 3, it is the second to abolish its fee policy, following Google Cloud in January of this year. Previously, Google Cloud also abolished conversion fees, saying, “These fees only account for about 2% of the total cost of cloud conversion, but we are nonetheless ending the fees in response to concerns about (cloud dependency),” and added, “ We want to encourage other CSPs to do the same.” It was also revealed. Naturally, the remaining Microsofts are also likely to consider abolishing the fee policy.

In particular, the reason Amazon and Google eliminated fees is because of investigations by regulatory agencies in each country into their dominance in the cloud market, and it may be burdensome for MS to also maintain fees in that respect. The suspension of these CSP fees is expected to have a significant impact on the cloud market. This is because it will relieve some of the barriers for companies that have been considering switching to the cloud to other CSPs but were worried about cost issues.

Additionally, companies that were concerned about being dependent on a specific CSP will feel less burdened by moving to a multi-cloud environment using multiple CSPs. An official in the cloud industry said, “The larger the data, the greater the cost burden of changing the cloud infrastructure, but these hurdles are decreasing.” He added, “Some companies that were hesitant about switching to the cloud, or especially customers who want to use multi-cloud, are using AWS, “I think it will be helpful because some people have a need to use Google like this,” he said.

However, he said, “Moving to the cloud is not just about cost,” adding, “If you put it that way, Chinese clouds are attracting customers at almost a tenth of the price of the Big 3, and there is a cloud that is suitable for the company in terms of corporate environment and technology.

Therefore, we will not make a decision just because the fee will disappear,” he added. Other domestic CSPs and management service companies ( MSPs ) that support their cloud construction and maintenance are also watching the Big 3 movements. In the case of domestic CSPs , they are losing about 80% of the domestic cloud market share from the global Big 3. In particular, many have pointed out that market competition is limited due to difficulties in switching to competitors and using multi-cloud.

However, another industry official predicted, “Companies that use domestic CSPs usually have no other options than domestic companies such as public and financial companies,” and added, “It is unlikely that they will move to overseas CSPs instead of domestic CSPs due to the fee issue .” An MSP industry official said, “ I don’t think it would be positive for the Big 3 CSPs to abolish customer fees,” and added, “ CSPs may try to make up for the losses incurred by no longer receiving fees by reducing various supports for MSPs .” “I was concerned.

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