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Wasabi Technologies eliminates cloud storage egress fees

Startup Wasabi seeks to shake up pricing by eliminating egress fees major cloud storage providers AWS, Google and Microsoft charge to transfer data.

Wasabi Technologies hopes to spark greater enterprise cloud storage adoption with the elimination of its network egress fees. While Amazon Web Services, Microsoft Azure and Google Cloud make you pay bandwidth charges to get data off their public clouds, Wasabi now offers customers a flat pricing option.

Wasabi will charge a flat fee of $.0049 per gigabyte, per month, or $4.99 per terabyte, per month, inclusive of any API calls, such as PUT, GET and POST. Customers already using the vendor's cloud can stick with Wasabi's old pricing scheme of $3.99 per terabyte, per month, and 4 cents per gigabyte for data transfer, with no charge for API calls. But Wasabi Technologies CEO David Friend said the new free-egress pricing model is resonating with current users and drawing increased interest from potential new customers.

Friend said about 150 Wasabi customers asked to switch to the new pricing model within the first week, forcing the company to assign staffers to work full time to handle the requests. He said daily trials of Wasabi cloud storage spiked about 30% during that time, and 8,000 to 10,000 potential new customers contacted the company -- "way up from prior weeks."

Flat pricing success at Carbonite

David Friend, CEO, Wasabi TechnologiesDavid Friend

Interest has been so great that Friend questioned why he didn't come up with the free-egress idea sooner. He said unlimited backup at a flat price was popular at his former company, Carbonite, an early cloud storage provider with services tailored to consumers and small and medium-sized businesses (SMBs). "People just loved that plan, because they knew exactly how much" their storage would cost, he said.

Wasabi Technologies claims an enterprise hoping to move 1 PB of data stored in Amazon to another vendor would face up to $90,000 in egress fees to transfer the data.

"That's vendor lock-in -- and, boy, I heard that from I can't tell you how many people," Friend said. "That's the one that really irritates them."

Egress is hot customer topic

Morro Data, a startup based in Fremont, Calif., sells CloudNAS services that combine its on-premises cache appliances with cloud-based object storage from Amazon, Backblaze or Wasabi. COO Michael Clegg said the topic of egress comes up in nearly every discussion about pricing with the company's SMB customers.

"We see a lot of customers that want some predictability in their pricing. They more or less know how much data they have, and they can easily calculate the storage and service fee. But the unknown is always the egress issue," Clegg said. "The idea that 'I'm paying you to store my data, but then you're going to charge me to get it back,' has always been an odd conversation to have."

Clegg predicted Morro Data's SMB customers would start to select Wasabi Technologies over the other cloud storage options. He said free egress is a great move for the industry, but it would take a load of users moving their data to lower-cost services such as Wasabi and Backblaze to compel "the big guys" to react.

Amazon rolls on

Raj Bala, a Gartner research director, noted that complex cloud storage pricing has had little impact on Amazon, with its projected $20 billion run rate for this year. He said Wasabi Technologies might have a chance to shake up the public cloud storage market, but its lack of an application to feed the storage is a challenge. Amazon's object-based Simple Storage Service did not take off until the company's Elastic Compute Cloud became available, Bala said.

Bala pointed out that many enterprises use AWS or Microsoft Azure for compute services in addition to storage. According to Bala, analytics workloads are the top drivers for data in public clouds. He said Wasabi's free egress would only help enterprises that use the startup's cloud storage directly from their own data center network with read-intensive workloads.

"Most enterprises are not that worried about [egress charges]. It's more vendor FUD [fear, uncertainty and doubt] than anything else. We hear it mostly from vendors selling on-premises storage gear. In reality, the average charge for bandwidth doesn't amount to a significant percentage," Bala wrote in an email.

'Hidden costs of the cloud'

But Ellen Rubin, CEO and founder of Boston-based startup ClearSky Data, said she has seen growing awareness about the "hidden costs of the cloud" among the medium and large enterprises with which her company works. ClearSky sells flash appliances for hot data and can tier colder data to AWS and Dell Technologies' Virtustream and back up to Azure and Google.

"When things first started, there was more of a concern about, 'Is the cloud secure?' and, 'Is the cloud reliable?' and, 'Where’s my data going?' and all those issues," Rubin said. "Now, as people are more experienced and have had a chance to run more different types of applications, they're learning that different use cases have different access patterns, and you have to be sensitive in terms of spending."

The idea that 'I'm paying you to store my data, but then you're going to charge me to get it back,' has always been an odd conversation to have.
Michael CleggCOO, Morro Data

Friend said the big cloud storage opportunity for Wasabi Technologies lies not from businesses moving off Amazon, but with users that have a room full of storage arrays reaching end of life. Since last May's launch, Wasabi has collected about 1,500 paying customers spanning industries such as media and entertainment, genomics and healthcare, according to Friend.

Wasabi Technologies currently operates out of a colocation facility in Ashburn, Va., where it owns disk-based storage equipment for about 30 PB of capacity, according to Friend. He said, next month, Wasabi plans to open a second data center at a colocation facility in Hillsboro, Ore. The sweet spot for Wasabi customers is 10 TB to 100 TB of storage, and the largest customer is a media company with more than 5 PB of data, Friend said.

The startup's customer base also extends to service providers. Novus Insight, a subsidiary of Connecticut Center for Advanced Technology, hopes to offer new services to its government and education customers thanks to Wasabi's new free-egress pricing model.

Novus Insight CEO Dan Salazar said his company uses Wasabi cloud storage primarily to back up data that customers rarely need to access, such as video from municipal surveillance and police body cameras. He said Novus cancelled plans to buy additional in-house disk-based storage now that it can consider Wasabi cloud storage for additional purposes, such as document management.

"The big unknown of egress charges was what kept us from adopting it for other use cases," Salazar said. "We didn't want any surprises."

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