What are data transfer costs

AWS (and all other cloud providers) meter the data you send over wire to the last byte. They also categorise this transferred data on the basis of source and destination location/services/etc. Each category appears as separate line item in your invoice and is billed at different applicable rates. The units are usually $x/GB. There are some free limits (which fall under the free tier limits) after which tiered pricing applies.

Why should I care about it?

  1. As per some rough estimates, AWS potentially earns billions in revenue from data transfer costs alone. As a customer, you might be paying decent amount towards it.
  2. It is pretty easy to get these under control without making significant changes to your code. So, it is worth your time to read about it and how you can optimise this cost.

Why does AWS charge for data transfer?

There are a lots of technically valid as well as profit-oriented reasons for this. I share a few to give a gist.

  1. AWS runs on razor-thin margins and data transfer is one of the major profit drivers on their balance sheet. So, it is not going away any time soon.
  2. They do incur some costs in maintaining the network over which your data moves. They invest money on cables, routers and other network equipments.
  3. A fee on data transfer encourages better network architectures by the customers. This automatically reduces network congestion.

My Take

AWS has never reduced data transfer costs ever since it was first introduced. These pricing models are a relic of the past when bandwidth was much more expensive than it is today. I feel AWS should lead and reduce the data transfer pricing. However, AWS has no incentive in reducing this.

Next to Read

Regions, AZ and data transfer costs

How to optimise?

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