Microsoft Azure removes exit fee as EU regulations kick in

“In this scenario, we’re facing more of a stick situation,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. “It’s an anticipation move, which I think is justifiable. You can’t expect self-regulation at all times. Vendors will naturally try to monetize every possible avenue, which is fair from their standpoint.”

While this move might reduce costs in select scenarios, this wouldn’t prompt customers to exit Azure or any other cloud service overnight. But there are some scenarios where it could make a difference.

“There won’t be a direct impact on operational costs,” Gogia said. “The status quo remains. The idea of exiting a cloud service like Azure is more notional than real. However, an interesting scenario would be when an application in one cloud service needs to communicate with data in another. This inter-cloud communication, especially in cases like a data lake, where significant data migration is required, is where the real costs come in.”

Exiting a cloud service entirely is a rare and complex process, according to Gogia. It involves years of transitioning, during which a company must negotiate, benchmark, deploy applications, and data, and then build a technical team to stabilize the new environment.

“So, realistically, full migrations are uncommon,” Gogia added. “The cost of migration might decrease, but that’s only relevant in rare cases where a total exit from a cloud service is necessary.”

Appeal to EU customers

Although there may not be a mass exodus of customers from any cloud service, removing these fees may allow Microsoft and others to increase their competitive edge and address some critical business concerns regarding cloud costs.