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The clouds pay-as-you-go model offers flexibility and an easy way to expand data storage.

But, although most cloud providers allow free data uploads to their infrastructure, downloading or even moving data from cloud storage comes at a cost.

Those fees, or egress charges, are one of the hidden costs of cloud computing, and can quickly mount up. In the most extreme cases, egress charge bill shock can make a cloud project so expensive that its no longer viable.

Cloud egress charges are a fee for network usage. They are any costs associated with moving data out of the cloud storage platform where the data is normally held, says Tony Lock at analyst Freeform Dynamics.

As such, egress charges are more than just a fee for downloads. Service providers can levy fees whenever data moves from a cloud storage platform, including to another cloud provider, to another region or availability zone, or even between applications.

One example is where a business moves data from archives to an analytics application. The CSP that hosts the archives will charge egress fees because the data leaves its storage, even though uploads to the analysis package are free.

And, warns Lock, some providers will levy egress charges to move data from storage into memory for example, for searches. In some circumstances, software-as-a-service (SaaS) applications will add their egress charges for downloading data.

The charges are also asymmetrical. Cloud providers rarely charge for uploading data or data ingress. Any costs they incur to bring data into their networks is wrapped up in subscription or other fees.

Rather like a supermarket that offers discounted goods as a loss leader, the cloud provider needs to offer cheap or free ingress to encourage customers to use their cloud.

Egress charges work the other way, by discouraging firms from transferring data out, either to other cloud providers, or to on-premise systems.

Theyve made the commercial decision that ingress should be effectively absorbed within the consolidated cost of service represented in the unit prices of cloud components, but egress charges are separated out, says Adrian Bradley, head of cloud transformation at consulting firm KPMG. At the heart of that, it is a real cost. The more a client consumes of it, the more it costs the cloud providers.

Firms have seen egress charges rise as they look to do more with their data, such as mining archives for business intelligence purposes, or to train artificial intelligence (AI) engines. Data transfers can also increase where organisations have a formalised hybrid or multi-cloud strategy.

Either theres a need to do a lot more data egress, or perhaps theres just simply the positive use of cloud to develop new products and services that intrinsically use more data, says Bradley.

The result is that firms are moving more data from cloud storage, and are being hit by increasing costs. Research by Aptum Technologies, a managed service provider, found that moving to the cloud resulted in higher-than-expected costs for 73% of firms, with 65% saying they had wasted money through inefficiencies in the cloud.

For chief information officers (CIOs), the risk from cloud egress fees is less the actual cost than their unpredictable and potentially uncontrollable nature.

Research by IDC estimates that planned and unplanned egress charges account for an average 6% of organisations cloud storage costs, itself a relatively small percentage. But that could still be enough to undermine the viability of a cloud storage project. And within that average, some firms will be paying more.

Data egress costs matter because, unlike subscriptions, they are not fixed and usually not negotiated in advance. Organisations can find that egress costs rack up because the business has changed its IT strategy, made an acquisition, entered a new market or come under regulations that force it to relocate data.

Even measures that bring efficiencies elsewhere such as improved forecasting or machine learning can push up egress cloud costs. In some cases, they can tip the balance between cloud or on-premise deployments.

Egress charges can also stand in the way of making cloud deployments more resilient because they add to the running costs of hybrid and multi-cloud architectures. And, as its a consumption-based charge, the more successful the cloud deployment, the higher the egress charges can be.

These costs typically cant be covered by a customers spend commitment. Theyre on top, which makes them even more unwelcome, says Patrick Smith, field chief technology officer for EMEA at storage supplier Pure.

This is made worse by a lack of transparency around egress fees. Although the charges are by no means new, their complexity makes them hard to predict and model. At KPMG, Bradley points to firms that suffer bill shock because they failed to carry out a detailed enough analysis of workloads before moving to the cloud.

But the second kind of bill shock comes from where patterns of consumption in a cloud environment evolve quite quickly, he says.

And there is a further risk. Firms that face unexpected egress charges might shy away from making full use of cloud-based data and lose competitive advantage as a result.

Strategies to reduce egress charges can be technical and architectural, or contractual. IT departments can try demand management, to limit cloud storage and data transfers. However, to micromanage usage in a dynamic cloud environment is itself costly. And putting hard limits on data downloads, for example, risks breaking business processes further downstream.

Instead, it is better to choose workloads carefully and design cloud architectures to maximise efficiencies. Examples include reducing inter-regional data transfers, deploying data deduplication and compression and rewriting data-intensive applications so they make fewer calls on cloud storage such as by only downloading data differences or deltas.

But contractual measures are as important.

Firms can negotiate to include egress, or some egress, into their subscription costs or try to reduce regional transfer charges. And it can pay to pay more for some services. Moving archived data to a tier suited to more frequent access can cost less than paying additional fees to retrieve it from cold storage.

Make sure you know exactly what data you have stored in each cloud service, especially cold systems where egress charges might mount up quickly, if the original assumption was that the data would not be recovered except in emergency, says Lock.

As more organisations look to use historical data in routine operational analytics, it might be time to consider just how cold most data really is. These factors all highlight the growing importance of holding much more detailed metadata than we have ever done before.

However, there is no industry standard formula to calculate when egress charges mean its no longer economical to store data in the cloud. This depends on the use case and the value of data. Repatriating data to on-premise systems brings its own costs.

And, although cloud management tools are improving and firms are becoming better at understanding their data flows, this analysis is still not easy.

Nonetheless, KPMGs Bradley advises that CIOs can take three steps to control egress fees.

One, really do the detailed analysis before you move, he says. Two, be bold in looking at your architecture and rethinking at least some elements, whether moving workloads to a different place, a content delivery network, or caching, as thats what makes a structural difference. Third, make sure you have good visibility, so you know what youre spending on that egress and managing it tightly.

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Cloud egress costs: What they are and how to dodge them

The days when every service was managed from a single server or location are long gone. When organizations build software and services, they have a variety of options depending on their budget, infrastructure, and security needs. Now teams can build software across a broad network of machines and software managed either by their own staff or external services.

What tools to use is a complex question and there is no one-size-fits-all for every organization.

Today, weve put together some analysis of the various pros and cons of some common cloud and on-premise options. Understanding the options for your team can help you make the right choice and save money and time in the long term.

With on-premise software, the software is usually located and operated within the organization's computing hardware.On-premise deployments are set up and maintained by the organization on its own network.

Security: By keeping everything in-house and cutting exposure to the outside world, organizations can retain all their data. Which is especially important if they are in a regulated industry. Teams can implement their own security policies to remain compliant and keep their data protected. And on-premise deployment allows them to establish a perimeter, which is inherently more secure than cloud hosting

User Control: In a more regulated industry, its important to maintain greater control of the environment and assets. Ideal for organizations that want to keep full control of their uptime, infrastructure, and prefer to maintain the software themselves.

Initial Cost: Depending on the size of deployment, an on-premise solution can be cheaper than a private cloud solution, especially in the short term.

If on-premise is already in use: While cloud is the most sleek and modern deployment model, it can actually cause problems if a company is already hosting a variety of other software on-premise and then choose to host one tool in the cloud. Organizations with a robust DevOps infrastructure that are used to deploying in-house will find it easier to continue adding on-premise solutions. Deploying to the cloud carries benefits but isn't a cure-all. It requires careful consideration for each unique environment.

Human Capital Requirements: On-premise solutions require dedicated IT support year-round to ensure the software is running properly.

Mobility: Unlike cloud-hosting, an on-premise deployment is not travel friendly - if members of the team are expected to be out-of-the-office or out of the approved field of use, an on-premise system may not be flexible enough to continue working while on the go.

Hidden Spend: Sometimes there can be hidden expenses associated with an on-premise solution. Anything from server space, to upgrades, maintenance, patches, and even natural disasters. This can end up costing an organization in labor and budget.

Infrastructure and Maintenance: From server space, deployment, downtimes, backups, and updates, an on-premise solution requires a lot of upkeep on the organization's end to keep it running like a well-oiled machine.

Scalability: On-premise means the need to know the approximate size and provisioning needs of an operation. This is where it pays off to be forward-thinking and estimate a business's potential growth far into the future. An on-premise system cannot scale as quickly and easily as a cloud solution, which has the potential to hinder a teams speed of growth. Choosing on-premise means knowing the organization's needs before its too late.

Cloud deployments consist of a remote network of servers that are connected togetherand used to store, process, and manage data remotely. Unlike an on-premise or disconnected deployment, these are often managed by a third party.

Cost savings: Because cloud providers typically offer a pay-as-you-scale model, organizations can save money on hardware, maintenance, and other upfront costs.

Scalability: Cloud systems are highly scalable, which means that organizations can easily increase or decrease their usage as needed. This can be especially useful for those that experience fluctuating demand for their services.

Accessibility: With a cloud system, users can access their data and applications from any device with an internet connection. This can be especially useful for remote teams or organizations with employees in different locations.

Reliability: Cloud providers typically have robust infrastructure and backup systems in place to ensure that their services are always available. This can provide peace of mind for organizations that rely on their systems to run their business.

Security: Many cloud providers offer advanced security measures to protect their customers' data, which can be more secure than maintaining these measures on-premises. If its not a highly regulated industry, cloud solutions are plenty secure for the majority of teams.

Externally Managed: Because cloud providers are responsible for maintaining and updating their systems, organizations that use the cloud can take advantage of new features and innovations without having to invest time or resources. Cloud allows teams to put more dollars and hours towards innovation.

Limited control: When multiple customers share the same instance of the software, there is often less control over it. This lessens the room for customization thats found in a single-tenant system. This can be a problem for organizations with very specific requirements or unique needs.

Shared resources: In a multi-tenant system, the resources of the software (such as processing power, memory, and storage) are shared among all of the customers. This means that if one customer experiences a high level of usage, it could potentially impact the performance of the software for other customers.

Security concerns: Some organizations may have concerns about the security of a multi-tenant system, as they are sharing the same instance of the software with other customers. While a security breach is unlikely, it is still less secure than an on-premise or disconnected deployment. Choosing the right provider and service can ensure a more secure cloud.

Misconfiguration - Just as with on-premise service, effective policy and administration is important. However, because of the ease of access and high availability, mistakes in the cloud can quickly spiral into disasters. After all, turning on sharing for a file or server enables it for the whole world.

Integration - Although this is constantly improving, cloud services often dont have the same connections that on-premise servers have. This is especially true for some compliance standards and legacy systems.

Cloud computing is the current wave of software delivery, and many services today are offered through varying cloud service models. One of the primary divisions is whether an organization draws from a collective resource pool or gets a specific service commitment (private vs. public).

In a private cloud service model, also known as a single-tenant cloud service, each customer has their own dedicated instance of the software, This means the customer has complete control over their instance of the software, including the ability to customize it to their specific needs and requirements.

On the other hand, in a public cloud service model, businesses deliver a multi-tenant cloud service where multiple customers share the same instance of the software. You may see this as SaaS, Software as a Service. This means that the software provider is responsible for maintaining and managing the software, which can be more efficient and cost-effective for the customers.

However, it also means that the customers do not have as much control over the software and may not be able to customize it as much as they would in a single-tenant system. There are some concerns that a multi-tenant solution is less secure; if customers choose a multi-tenant solution from an organization with good security policies, it can be just as secure as a single-tenant deployment.

Overall, the choice between single and multi-tenant cloud software options depends on the specific needs and priorities of the customer:

A disconnected deployment is exactly what it sounds like. These on-premise deployments are cut off from the public internet for security and compliance reasons.

These are also referred to as air gapped, meaning a clear physical separation to create a private network. This isolation may avoid connections even from networks within the same organization.

Security: Disconnected environments are hands down the most secure deployment model. In a highly regulated industry, organizations can benefit from the iron walls a disconnected deployment has around data or intellectual property. This helps address both known attacks and theoretical threats.

Compliance Requirements: Disconnected deployments are the only model compatible with air-gapped developer environments.

Cost: A disconnected solution will cost teams the most. Due to the additional infrastructure resources required, disconnected deployments are not the most cost-effective.

Data Lag: While any disconnected deployments worth their salt will ensure daily data updates, some updates may take longer. For the majority of teams, this is not a major concern, but if real-time data is a priority for an organization, disconnected deployments may be too slow for their needs.

Infrastructure and Maintenance: Ensure the right infrastructure is in place before buying a disconnected solution. From server space to compute and administrative resources, there is an additional cost to running a disconnected deployment.

No deployment model is perfect, and all come with their challenges. An organization needs to know which capabilities will best suit its specific needs. A general understanding of which direction to proceed can save time and research.

To sum up what weve discussed so far:

More questions about deployment models? Were always happy to chat. Schedule a demo with one of our experts to learn more.

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A Guide to Deployment Models: On-Premise, Cloud, and Disconnected