Cloudflare challenges AWS with R2 storage and no exit fees

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Cloudflare recently announced R2 storage, an S3-compatible service for storing large amounts of data with no associated egress bandwidth charges. An automatic migration of objects from Amazon S3 to Cloudflare R2 will be offered to facilitate the transition or integration of existing AWS deployments.

Cloudflare claims they will eliminate egress fees, provide object storage at least 10% cheaper than S3, and make infrequent access free. In the announcement, Matthew Prince, co-founder and CEO of Cloudflare, explains:

Since AWS launched S3, cloud storage has attracted, and then blocked, developers with exorbitant exit fees. (…) Our goal is to make R2 storage the cheapest and most reliable option for storing data, with no egress costs.

Automatic migration from S3 to R2. Source: https://blog.cloudflare.com/introducing-r2-object-storage/

After promoting the Bandwidth Alliance, a group of cloud and networking companies pledged to lower data transfer charges, hoping that AWS would join, Cloudflare highlighted what Prince calls AWS Egregious Egress and “Hotel California Pricing” last summer:

Over the past decade, wholesale prices for mass transit in the industry have fallen by an average of 23% per year. Combined during this period, wholesale bandwidth is 93% cheaper than 10 years ago. However, AWS’s exit fee over the same period only dropped by 25%.

Analyzing “the compelling economics of Cloudflare R2,” Coney Quinn, cloud economist at The Duckbill Group, explains how the new service could be used by existing AWS customers:

Cloudflare offers a kind of “S3 proxy”; you can drop it in front of S3 or, frankly, any S3 compatible object store, which is actually all. And suddenly the fun begins.

In a popular discussion thread, Quinn add:

I’m really curious about what position AWS is going to take on Cloudflare’s free release: 1) It’s impossible, Cloudflare will go bankrupt doing this. 2) Yeah, you caught us, we’ve been ripping you off for years. Get a discount. 3) Complete silence.

The announcement was discussed and well received by the developers on Hacker News and Reddit. Claiming that Cloudflare is “eating the cloud from the outside in,” Shawn Wang, senior developer at Temporal.io, writes:

Cloudflare took a part of the cloud that nobody liked, offered an insanely good free offering, and quietly racked up an 80% market share. Meanwhile, when people think of AWS Tier 1 services, its Cloudflare counterpart, Amazon CloudFront, is rarely appreciated.

A few users question the name R2, Rapid and Reliable, with Taloflow providing a name generator for future object storage services. R2 is still under development with a waiting list for access. It is expected to cost $ 0.015 per GB per month, not charging for data output and offering zero-rate request fees until customers make double-digit requests per second.



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