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Cloudflare slams AWS egress fees to convince web giant to join its discount data club • The Register

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Cloudflare on Friday accused competitor Amazon Web Services of massive markups and hindering customer data portability, even as it invited the cloud services giant to join its discount data initiative known as the Bandwidth Alliance.

“AWS’s bandwidth pricing is bonkers,” said CEO Matthew Prince, via Twitter. “And they stand alone in the industry not discounting when their customers send traffic to peered networks.”

Prince and Nitin Rao, SVP of global infrastructure at Cloudflare, elaborated on that claim in a blog post that argues AWS is charging customers orders of magnitude more than its costs and makes a mockery of its parent company’s mission statement that Amazon strives “to offer our customers the lowest possible prices…”

In particular, Prince and Rao take issue with cloud giant’s egress data transfer, or bandwidth, pricing – what it charges to send data to external networks.

“During the last ten years, industry wholesale transit prices have fallen an average of 23 per cent annually,” explain Prince and Rao. “Compounded over that time, wholesale bandwidth is 93 per cent less expensive than 10 years ago. However, AWS’s egress fees over that same period have fallen by only 25 per cent.”

They further note that since 2018, the egress fees AWS charges in North America and Europe have remained unchanged while wholesale prices in those markets have gone down by more than half.

AWS is able to charge excessive rates, they suggest, because customers pay for delivered data volume while AWS pays for bandwidth based on the capacity of its pipes. This difference – charging customers using a “stocks” model while incurring costs under a “flow” model – leaves lots of room for AWS to profit based on effective utilization of its resources.

The pair made various estimates for AWS’s data transfer profit margin, using the AWS Simple Monthly Calculator – ironically named, they contend, in reference to AWS’s famously difficult-to-understand pricing scheme. They project, for example, that AWS charges customers in the US, Canada, and Europe 80 times more than its operational cost.

What’s more, they argue, the effective markup is likely to be higher still because when AWS exchanges data with a network like Cloudflare using a direct, settlement-free peered connection though a private network interface, incremental costs are negligible. And there are also rebates that Amazon collects from colocation providers who charge cross connection fees to customers to consider.

Welcome to the Hotel California

Only AWS, however, is in a position to provide data on its actual costs but the company has not done so – most businesses keep such details to themselves.

Prince and Rao also suggest there’s an anti-competitive aspect of AWS’s decision to charge a premium for data leaving its ecosystem (egress) but not for data entering its ecosystem (ingress).

They liken this to “Hotel California pricing,” a reference to a line from The Eagle’s 1976 song of the same name that describes a place where you can never leave. The implication is this pricing model deters companies dependent on AWS from choosing to move their data and business elsewhere, even though Google and Microsoft also charge for data egress.

“The only rationale we can reasonably come up with for AWS’s egress pricing: locking customers into their cloud, and making it prohibitively expensive to get customer data back out,” they said. “So much for being customer-first.”

Some AWS users have come to this conclusion too.

However, the pricing for data egress from Google Cloud Platform (~$0.11) and Microsoft Azure (~$0.0875 per GB) for 10 TB doesn’t appear to be vastly different from AWS (~$0.09 per GB), at least on paper.

What makes Cloudflare single out AWS is that Microsoft Azure and Google Cloud, while neither participate in the Bandwidth Alliance, “will substantially discount egress charges for their mutual Cloudflare customers.”

In short, Cloudflare is sticking it to AWS in the hope the cloud service giant will play ball and play nice.

The Bandwidth Alliance, Cloudflare said in a separate post, can save customers between 7.5 per cent and 27 per cent on egress data transfer charges. Presently the group consists of: Alibaba, Automattic, Backblaze, Cherry Servers, Dataspace, DNS Networks, DreamHost, HEFICED, Kingsoft Cloud, Liquid Web, Scaleway, Tencent, Vapor, Vultr, Wasabi, and Zenlayer.

The Register asked Amazon for a response. The web titan expressed its intention to so do though its reply did not arrive by our deadline. We will update this story once we hear back.

If we had to guess, we’d predict that Cloudflare’s negotiation via social media won’t make AWS abandon its cloud-based printing press for cash. And while the Attorney General of Washington DC recently filed an antitrust lawsuit against Amazon over alleged retail market abuses, its AWS subsidiary remains for the moment unthreatened by regulatory intervention. ®

Full disclosure: The Register is a customer of Cloudflare.



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Irish payroll tech company BrightPay merges with UK’s Relate

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The two companies will get funding from investor Hg to hire more employees and innovate new technologies across Ireland and the UK.

Irish payroll management tech company BrightPay has announced a merger with London-based accounting software company Relate Software in a bid to integrate services for SMEs across the two islands.

Based in Co Meath, BrightPay has been operating in Ireland for more than 25 years and employs more than 70 people in the country. It provides payroll software services to more than 330,000 employers in Ireland and the UK.

Upon merging, BrightPay CEO Paul Byrne and Relate co-founder and CEO Ray Rogers will remain investors and become co-CEOs of the new entity. The other co-founders of each company will also continue to invest in the new business and develop products.

Byrne said that Relate’s track record in the sector will help them become the leading service for many businesses and accountancy firms.

Private equity investor Hg, which focuses on software and service businesses in Europe and North America, will become the majority investor in the combined business. “Their deep sector knowledge has proven invaluable to us and will be instrumental in fuelling the further growth of BrightPay/Relate,” Byrne added.

New hires and technologies

The merger will benefit from the combination of BrightPay’s expertise in payroll software with Relate’s experience in accountancy management tech. Together with Hg, the new business will invest in new technologies such as cloud and automation to improve their services.

Rogers, founder and CEO of Relate, said: “Combining products from both businesses will provide a compelling offering for our customers, with the scope and backing for further innovation and development.

“I’m looking forward to working with Paul and am also excited to welcome Hg, a leading software investor with a track record of supporting growth in Irish software businesses.”

While details of the transactions have not been disclosed, the combined business will have more than 190 employees with plans to hire more people across Ireland and the UK.

“Both BrightPay and Relate are very highly regarded businesses and champions in their field,” said Jonathan Boyes, Hector Guinness and Thomas Martin of Hg in a joint statement. “The two companies bring together core operational strengths whilst also unlocking a high-quality, complementary suite of products to a newly combined customer base.”

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New UK broadband rules will make it easier to switch supplier | Broadband

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The UK media regulator, Ofcom, has introduced a new service to make it easier for customers to switch broadband supplier to get a better deal.

Ofcom hopes the new process, One Touch Switch, will encourage people to seek out better deals after research found that more than two-fifths of people were put off switching broadband suppliers because of the hassle.

People can already switch between providers that use Openreach’s broadband network – such as BT, Sky and TalkTalk – through a process requiring a customer to only contact their new supplier.

However, until now customers looking to change networks or technologies – such as between Virgin Media’s network and a provider on Openreach or other smaller networks such as Hyperoptic or CityFibre – had to deal with both the new and old supplier simultaneously.

Ofcom research found that a quarter of customers making such a switch faced attempts by their provider to stop them. The One Touch Switch process aims to eliminate these issues, including customers having to sort out the end and start dates of their old and new services.

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“Household finances are strained at the moment, so switching broadband provider could help keep your bills down,” said Lindsey Fussell, the network and communications group director at Ofcom. “We’re making it as easy as possible for you to break up with your broadband provider and take advantage of the deals on offer.”

Ofcom said the new rules will also mean that suppliers will have to compensate customers if they are left without internet for more than one working day during a switch. All suppliers must introduce Ofcom’s new simplified switching process by April 2023.

The regulator has introduced a range of measures in recent years to make sure customers have access to the best deals. These include cracking down on the so-called “loyalty penalty” by which customers who stick with their broadband, mobile or pay-TV supplier are not offered the same discount deals as new customers.

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India, Japan flex cyber-defence muscles as China seethes • The Register

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India and Japan have each flexed their cyber-defence muscles in ways that China can’t miss.

Japan’s flex was the Monday launch of a national cyber-security policy that for the first time names China, Russia, and North Korea as sources of heightened threat. The policy also calls for Japan’s Self Defence Force to increase its digital capabilities.

The new plan was released as expected under Japan’s policy of refreshing its defensive plans every three years. The theme for the policy is “Cybersecurity for all” and chief cabinet secretary Katsunobu Kato said its aim is to ensure that no part of Japanese society goes without the protections it needs.

Kato said the plan was also developed because Japan’s government “recognised a threat” and therefore a need to strengthen its online defences. The policy documents list many recent infosec incidents – such as the attack on SolarWinds and Microsoft’s Exchange flaw – as the sort of thing Japan needs to counter.

India’s flex came from vice-president M. Venkaiah Naidu, who on Monday visited a military museum and remarked that India’s security forces should “prepare themselves to dominate not only in a conventional war but also establish their superiority in the new and emerging areas of conflict such as information and cyber warfare along with the increasing use of robotics and drones in the battlefield”.

“The nation is assured that any misadventure by an adversary will be given a befitting reply by the Indian Army,” Naidu said.

While the position of vice-president is largely ceremonial – the officeholder is backup to the head of state, but actual power resides with Parliament – Naidu’s words have weight. Doubly so as he stated India faces “both symmetric and asymmetric threats from outside and within” and then asserted India’s sovereignty over Jammu & Kashmir and argued that previous arrangements that gave the territory autonomy were temporary.

Mentioning Jammu & Kashmir is significant, as the disputed India/China border is in the territory. The territory is also the subject of a dispute with Pakistan.

Kashmiri separatists, which India labels Pakistan-supported terrorists, and China, will all have noticed the veep urging India to arm itself in the kinetic and digital realms.

China has certainly noticed last week’s meeting of “The Quad” – the grouping of Australia, the USA, Japan, and India – and its announcement of plans to develop infosec standards it hopes the world will follow.

China’s foreign ministry has labelled The Quad a “closed and exclusive clique” informed by “outdated Cold War zero-sum mentality and ideological bias”.

Spokesperson Hua Chunying addressed the issue at a press conference in response to a question from Russian news agency TASS. “For some time, these countries have been keen on insinuating China with the so-called ‘rules-based order’, playing up and inciting the so-called ‘China threat’ theory, and driving a wedge between regional countries and China.”

Te actions of Japan and India actions suggest the wedge is working. ®

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