Why Wasabi Said No to Cloud Storage Egress Fees

David Friend, CEO
Wasabi Technologies, Inc.
03/20/2018
Blog

All the leading object storage vendors charge for egress (retrieving data from storage). When we introduced Wasabi in May 2017, we charged for egress too. But it never sat right with me, so I want to explain what we are doing about it, which is to eliminate egress fees.

I hate getting nickeled and dimed, and I’m guessing that you do, too. It’s time to get rid of all the hidden and unpredictable charges in the cloud object storage business. Part of my decision to eliminate egress charges stems from my experience as CEO of Carbonite, the backup company. Carbonite turned the backup industry upside down in 2006 when we introduced the industry’s first “unlimited backup for a flat price.” Up to that point, backup had always been sold by the gigabyte. Nobody believed we could offer unlimited backup for $59 and still make money. Our competitors, including Iron Mountain, EMC, and HP opined that we would soon be out of business. Today Carbonite is one of the largest backup companies in the world and the other guys are out of the consumer backup business.

“People want to know what things are going to cost before they buy them. They want predictability for the simple reason that they have budgets and will be held accountable for them.”

Simple always win

The world is full of examples where  “all you can eat” pricing plans have won out. Ten years ago, it was common for car rental companies to charge by the mile. Today, everyone has gone to unlimited mileage. In 2012, all the major cell phone carriers had limited data plans. Then, T-Mobile introduced unlimited data plans and their subscriber base shot up by over 40 percent within six months–the only major shift in market share among the major carriers in a decade. They forced both AT&T and Verizon to follow suit.

Unlimited plans are simple, predictable, and just feel right

In the cloud storage industry, Amazon, Google, and Microsoft all make it free to upload data to their cloud storage, but if you want to get it back, you have to pay for every gigabyte. That smacks of vendor lock-in and it makes you feel like you’re being nickeled and dimed to death. Amazon charges 5 to 9 cents per gigabyte for egress over the Internet. If you have a petabyte of data stored in Amazon and you want to get it all back (say, to migrate to another vendor) it will cost you $54,000 in egress fees. And at Amazon’s speed, which is about 15 MBs per second, it will take you 11,574 days to download that petabyte.

You can speed up that download with Amazon’s “S3 Transfer Acceleration” product. But at $.04/GB, it will cost an additional $40,000 per petabyte, bringing your total egress costs to $94,000. And that’s not all: They also charge for every PUT, GET, POST, and LIST operation. Accessing a petabyte of data will require many of these API calls, depending on the average size of your objects, potentially adding thousands of additional dollars to your bill.

A cloud storage bill, in my opinion, should not have 10 or 15 line items. It should have one, like this:

Storage Amount: $4.99/TB per Mos. x 10  = $49.00

That’s it. One line. No other charges.

You can make your own cost comparisons with our Wasabi hot cloud storage calculator.

Cloud storage costs must be predictable

People know how much data they have. That’s easy. But for the most part, they have no idea how much egress they’re going to need. Nor do they know how many PUT, GET, LIST, and COPY operations they are going to use. All of these unpredictable fees have to go in order to make cloud storage a true utility.

It’s possible that we’ll lose a little money on a very small number of customers, but on average I think customers like unlimited pricing models and it’s what the market wants. Our decision to eliminate egress charges is not going to make the legacy vendors very happy because their business models are based on extracting money from you every time you use your stored data. I think our decision will reverberate through the industry and cause a lot of people to rethink the economics of cloud storage.

When we launched last year, I said that our vision was to make cloud storage a common utility like electricity and bandwidth. By removing egress fees, I think we’ve taken a major step in moving this vision toward reality.

A utility is simple, ubiquitous and inexpensive. At Wasabi, we now have the lowest cost, fastest and safest cloud storage in the industry. We’ve removed all the complex storage tiers, all the complicated access, PUT, GET, and LIST charges. And today, we’ve removed all the egress fees.

We’ve made saving your data simple, inexpensive, and predictable. This is the pricing model that customers have been asking for. Wasabi has been listening.