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In this cloud roundup: Google discontinues the practice of charging customers for changing providers; Dell'Oro Group foresees a banner year for 800G deployments but a significant drop in the Ethernet data center switch market; and Google purchases 500 acres for data center development in Kansas City.
January 12, 2024
Google discontinues cloud switching fees
Google will no longer charge customers data transfer fees when they switch cloud providers. Google's discontinuation of the practice might light a fire under AWS and Microsoft Azure to mirror the practice, reported Bloomberg's Dina Bass.
Google Cloud GM and VP Amit Zavery wrote in a blog post that while eliminating the fees will make it easier for customers to change cloud providers, it won't solve the problem of "restrictive and unfair licensing practices" by some companies.
"Certain legacy providers leverage their on-premises software monopolies to create cloud monopolies, using restrictive licensing practices that lock in customers and warp competition," he explained.
Zavery told Bloomberg that switching fees aren't a big deterrent for customers looking to migrate to a new webscaler, with switching costs typically accounting for only about 2% of the total cost of migrating to a new provider. Training and other fees incurred as part of the process are a bigger concern for customers, he added.
Zavery also said he hopes this move will encourage regulators to address Microsoft's licensing restrictions that can make it expensive and challenging to run Microsoft programs in competitors' clouds.
Ethernet data center switch slowdown – Dell'Oro
The Ethernet data center switch market is forecast to grow at a rate of less than half that of 2023, according to Sameh Boujelbene with Dell'Oro Group. The research firm predicts 2024 sales will be impacted by factors such as sales backlogs and budget cuts based on either macroeconomic conditions or an increased focus on AI.
The increase in spending on AI would likely redirect funds usually earmarked for "traditional front-end networks used to connect general-purpose servers."
AI investments will boost the data center switch market over the next five years. Dell'Oro reported in July 2023 that "20 percent of Ethernet Data Center Switch ports will be connected to accelerated servers to support Artificial Intelligence (AI) workloads by 2027." The data center switch market is expected to surpass $100 billion in total sales by 2027, the firm added.
Dell'Oro also foresees an uptick in 800G deployments by large cloud providers, predicting 800G launches to "significantly accelerate in 2024."
Google grabs 500 acres for data center development
Google scooped up nearly 500 acres in Kansas City's Northland, Missouri data center hub, according to the Kansas City Business Journal. While the price of the sale wasn't disclosed, this purchase is located a few miles from a 315.3 acre data center campus Google secured in December 2023.
The initial 300-acre campus will be developed in four phases, with Google building 1,435 million square feet of floor space, reported Data Center Dynamics.
Senior Editor, Light Reading
Kelsey is a senior editor at Light Reading, co-host of the Light Reading podcast, and host of the "What's the story?" podcast.
Her interest in the telecom world started with a PR position at Connect2 Communications, which led to a communications role at the FREEDM Systems Center, a smart grid research lab at N.C. State University. There, she orchestrated their webinar program across college campuses and covered research projects such as the center's smart solid-state transformer.
Kelsey enjoys reading four (or 12) books at once, watching movies about space travel, crafting and (hoarding) houseplants.
Kelsey is based in Raleigh, N.C.
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