On September 26th 2018, Cloudflare announced the introduction of their new business venture named Bandwidth Alliance to share the benefits of Interconnected Networks with the mutual consumers of all the Cloud and CDN companies involved in the alliance. Essentially, the effect is to waive off all Egress charges for mutual consumers altogether.
According to Cloudflare,
The Bandwidth Alliance is a group of forward-thinking cloud and networking companies that are committed to providing the best and most cost-efficient experience for their mutual customers.
Normally, when a user uses a cloud provider, there is a overhead fee involved for Data Transfer Charges known as Egress Charges or at times, Bandwidth Charges.
When using a CDN like Cloudflare, however, these Bandwidth Charges come in addition to the charges of Content Delivery.
“In some cases, charging makes sense. If you’re hosted in a facility in Ashburn, Virginia and someone visits your service from Sydney, Australia there are real costs to moving traffic between the two places.” Cloudflare says in their blog.
Someone has to maintain the expensive infrastructure that hauls the traffic the 9,739 miles from Ashburn to Sydney. It makes sense for the cloud provider to charge a customer to cover the cost of that transit or their own backbone.
Cloudflare however, had been working on Private Network Interface to provide data to their end users. This PNI passes through all of Cloudflare’s internal hubs and does not require any middlemen.
Cloudflare realised that they could eliminate the need of middlemen if they formed an alliance with other Cloud and CDN companies, and hence take care of any excess charges levied to their customers.
Cloudflare had already been working along with Google for their CDN Interconnect program. Similarly, Microsoft Azure has been working on their own CDN Interconnect program.
First, Cloudflare, therefore, wanted to go beyond what Google and Microsoft were already doing. Then, they implemented a new smart routing system. Finally, they agreed with other Cloud providers to waive of Data Transfer Fees entirely for their mutual customers.
And hence, The Bandwidth Alliance was started with Cloudflare, Automatic, Backblaze, Digital Ocean, DreamHost, IBM Cloud, Linode, Microsoft Azure, Packet, Scaleway, and Vapor with the primary objective to provide mutual customers with efficient services at economical prices.
As a result, the first benefit of this interconnected network is that the customer no longer has to pay for any Egress fees levied on them.
Reportedly, customers can save up to $50 million per year in the name of discounted or waived Bandwidth fees.