Customers of the cloud providers Amazon Web Services, Microsoft’s Azure and Google Cloud Platform previously had to pay fees when switching to another service. Now Google is canceling the extra costs, but not without criticizing the business practices of Windows developer Microsoft.
• Criticism of high switching fees at Amazon, Microsoft and Google
• Google is willing to compromise
• Criticism of Microsoft’s approach
High switching fees at Amazon, Microsoft and Google
Cloud solutions are being used more and more not only in private contexts, but especially in the business sector. Amazon, Microsoft and Google, whose cloud services are among the largest and most widespread, have had this trend on their radar for a long time. Market leader Amazon secures a market share of 34 percent with its cloud subsidiary Amazon Web Services (AWS), as data from “KnowledgeHut” shows. In second place is Microsoft’s Azure with 22 percent, followed by Google Cloud Platform. However, as the news agency “Bloomberg” reported, business customers of the three cloud giants have long been criticizing the high fees that arise when switching to competitors.
No exchange fees: Google shows you how
On this point, Google gave in to the wishes of its users and completely eliminated cloud switching fees. “Starting today, Google Cloud customers who want to stop using Google Cloud and migrate their data to another cloud provider and/or on-premises can take advantage of free network data transfer to migrate their data from Google Cloud,” said Amit Zavery, Head of Platform at Google Cloud, in a blog post on January 12, 2024. The change affects all customers of Google’s cloud platform, regardless of which country they are in. This is intended to make it easier for users to take their changing business needs into account and switch to a provider that is more suitable for them.
Costs are usually relatively low
Zavery explained, according to Bloomberg, that switching fees when moving to a new cloud provider are typically only two percent of the total costs and that most customers have not been deterred by these in the past. Training and service fees are responsible for the lion’s share of moving costs. Nevertheless, with this step you want to signal that you approach your customers and approach their needs with understanding.
Competitors prevent interoperability
In the announcement, Google itself noted that while this move would help business customers, the real problem was something else: “restrictive and unfair licensing practices.” “Certain vendors are using their on-premises software monopolies to create cloud monopolies by adopting restrictive licensing practices that lock in customers and distort competition,” Zavery shot at Google’s competitors. This limits the choice of how and with which applications customers of cloud services can interact. Some providers charge around “five times the price if customers decide to use certain clouds from competitors,” said the platform boss. “These and other restrictions have no technical basis and can increase costs for customers by 300 percent.”
Microsoft should block the use of Windows and Office 365
Even if Zavery does not name the competitor in the announcement, according to Bloomberg it should be clear that it is Microsoft. It is more difficult, more expensive or even impossible to run Microsoft software such as Windows or the Office 365 suite in competitors’ clouds, as not only Google, but also Amazon and some customers of both services have been complaining for years. Microsoft itself has repeatedly stated in the past that it wants to remove such restrictions in the future. There have already been some such easings in 2022, but Google and Amazon have not benefited from them, according to Bloomberg.
Google calls authorities into action
For this reason, the European Union should now address the accusation of a lack of interoperability. As early as March 2023, Google called on EU representatives to take a closer look at Microsoft’s cloud practices, as the Reuters news agency reported. In June of the same year, the search engine company also filed a complaint with the US Federal Trade Commission (FTC), according to CNBC. “With overly complex agreements designed to lock customers into their ecosystem, companies like Microsoft and Oracle not only force their customers into a monolithic cloud model, but also limit choice, increase costs for customers, and disrupt growing and thriving digital ecosystems in the USA and around the world,” Google wrote in a letter to the US authorities.
It remains to be seen whether the authorities will take the complaints seriously and whether Google’s competitors Amazon and Microsoft will implement similar relaxations.
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