Cloudflare accuses AWS of massive markups on egress bandwidth fees per region, estimating North American and European customers pay 80x the operational costs
Loading... When web hosting services first emerged in the mid-1990s, you paid for everything on a separate meter: bandwidth, storage, CPU, and memory.
Context & Ripple Effects
The 80x markup estimate is the sharpest salvo yet in a campaign Cloudflare has run since it organized the Bandwidth Alliance with Microsoft, Google, Automattic, and Backblaze in 2018 to push down cloud networking costs. The accusation also sets up what came next on Cloudflare's own roadmap: two months later it launched R2 object storage with no egress fees at all, turning the critique into product.
For AWS, this landed alongside earlier pricing concessions — it had already moved EC2 to per-second billing in 2017 rather than hourly — but egress was the fee structure it defended longest, until [[a:850069|regulatory pressure around vendor lock-in forced it to follow Google in dropping egress fees in 2024]]. Azure held out longer.
First-order effects
- Cloudflare hands North American and European customers an explicit cost benchmark — 80x operational cost per region — that procurement teams can use directly in renewal negotiations with AWS.
- AWS faces a public pricing attack from a rival whose own network costs are the basis of the comparison, sharpening the contrast with Cloudflare's edge services like Workers, which had already priced compute at $0.50 per million tasks instead of metered infrastructure.
Second-order effects
- Bandwidth Alliance signatories gain cover to cut or restructure their own networking fees, since the alliance's premise — that egress pricing exceeds real transit costs — now has a quantified public case attached to it.
- Egress fees stop being a defensible lock-in mechanism for any hyperscaler: once one major provider prices data exit at zero (as Cloudflare did with R2), every competitor's egress bill becomes a churn risk its sales team has to defend.
Third-order effects
- If the pattern holds, bandwidth stops being a profit center across cloud hosting entirely, echoing the 1990s shift the article opens with — from separate meters for bandwidth, storage, CPU, and memory toward bundled capacity pricing.
- Regulators treating egress fees as a vendor lock-in instrument points toward cloud portability becoming a compliance issue rather than a marketing one, with pricing structures audited against underlying transit costs.
The trend: Cloud economics is moving away from metered egress as a margin engine and toward zero-exit-fee platforms, pushed by challengers like Cloudflare and pulled by regulators targeting lock-in.