High Cloud Egress Costs: Why Businesses Are Moving Data On-Premise

Public cloud services promise scalability, flexibility, and cost-efficiency. But many businesses discover hidden costs after deploying data-heavy applications in the cloud—particularly when it comes to accessing or moving their own data. These hidden charges are known as cloud egress fees, and they’re becoming a financial burden for organizations across industries.

The Problem: Unexpected and Recurring Egress Fees

Companies often assume that storing data in the cloud is straightforward—pay for what you store and access it freely. But that’s rarely the case. Every time data is moved out of the cloud to another location—another cloud, an on-premise server, a customer device, or even just across regions—it racks up charges. These costs can be especially painful for data-intensive use cases like video rendering, machine learning, backups, and multi-cloud analytics.

Many organizations underestimate how often they need to access or transfer large data sets. Over time, the repeated egress activity turns into a costly line item on monthly cloud bills. These fees are not only expensive—they’re unpredictable. That unpredictability makes it harder to forecast budgets and plan long-term data strategies.

Why Businesses Are Moving On-Premise

To stop the financial bleed, more companies are migrating data back to private infrastructure. With S3 Object Storage on Premise, they avoid ongoing egress charges altogether. Businesses regain complete control over their data pipelines and network usage. No middlemen. No recurring fees for using their own data.

On-premise storage also improves data governance. Since data stays inside the company’s physical or logically private infrastructure, compliance management, access auditing, and retention policies are easier to enforce.

How Cloud Egress Fees Add Up

Let’s break down where the egress costs come from and how they quietly snowball:

1. Frequent External Access

Every time a file is accessed from outside the cloud—by users, partners, or remote applications—it counts as egress. That means video streaming, API calls, dashboards, or even customers downloading documents all generate fees.

2. Multi-Cloud Architectures

In multi-cloud environments, data often moves between clouds. These transfers are subject to outbound transfer charges. Multiply this by every microservice or automated job, and the bill escalates quickly.

3. Backup and Disaster Recovery

Companies that back up data from the cloud to another location for redundancy pay every time a copy is made and sent off-site. Over time, these costs rival or even exceed the cost of storing the original data.

4. Data Replication

Applications with high availability setups often replicate data across regions or zones. Every replication event generates egress fees. For globally distributed services, this becomes a regular and expensive pattern.

On-Premise Advantage: No More Egress Surprises

Full Control Over Data Flow

With data hosted on in-house infrastructure, companies control who accesses the data and how often. This visibility leads to smarter optimization decisions, helping IT teams reduce unnecessary access and streamline performance.

Predictable Cost Structure

There’s no per-gigabyte egress fee. Hardware, electricity, and maintenance costs are predictable and budgetable. This simplifies accounting and prevents surprise overages.

Higher Performance with Local Access

Applications that run near their storage benefit from reduced latency. When compute and storage live on the same network, workflows like video editing, analytics, or machine learning execute faster without hitting the bandwidth limits of public cloud providers.

Use Cases That Benefit Most

Not all organizations need to bring data in-house—but several use cases see immediate returns by doing so.

1. Media and Entertainment

Post-production studios working with high-resolution video files often move petabytes of content between workstations and storage. Doing that over a public cloud gets expensive. Local storage eliminates that barrier.

2. Healthcare and Life Sciences

Hospitals and research labs dealing with genomic data, MRI scans, and medical records require constant data access and strict compliance. Hosting this sensitive data locally reduces exposure while avoiding egress fees.

3. AI and Machine Learning

Training large models requires repeated access to vast datasets. If that data lives in the cloud, egress charges pile up quickly. Local storage solutions remove this bottleneck and accelerate model development.

4. Manufacturing and IoT

Factories generating telemetry, logs, and sensor data in real-time need quick and constant access to historical data for optimization and forecasting. That’s difficult to sustain if the data sits in a fee-based cloud tier.

What to Consider Before Moving Off the Cloud

Shifting from cloud to on-premise is not plug-and-play. There are a few considerations:

Hardware and Infrastructure Planning

Businesses need physical or virtual infrastructure to support the same level of scalability and durability they experienced in the Cloud. That includes rack space, networking, power, cooling, and backup systems.

Data Migration Strategy

Large-scale data migration takes planning. Moving petabytes of data out of the cloud must be done efficiently. Companies can use bulk data transfer appliances or secure physical drives to lower initial costs.

Maintenance and Staffing

Running on-premise infrastructure means internal or outsourced teams must manage uptime, security patches, and storage upgrades. While this comes with operational overhead, the long-term savings on egress can justify the cost.

Security and Compliance Benefits

Public cloud platforms often require extra layers of configuration to meet industry-specific compliance rules. By hosting data locally, businesses can build environments that precisely match their regulatory requirements—HIPAA, GDPR, CCPA, and more.

Local access controls, physical security, and air-gapped options also provide a higher degree of assurance for sensitive workloads.

Cost Comparison: Cloud vs. On-Premise

Let’s simplify the math with a basic example:

• A company stores 500 TB of data in the cloud and accesses 50 TB per month.
• At a typical egress rate of $0.09 per GB, that’s $4,500/month or $54,000/year just in egress fees.

Compare that to deploying a mid-range on-premise storage system:

• Initial hardware investment: ~$100,000
• Annual maintenance: ~$10,000
• Total 3-year cost: ~$130,000

Over three years, the cloud egress fees alone would reach $162,000—without accounting for storage or compute costs. That’s a $30,000 saving with on-premise infrastructure, plus more predictable budgeting.

Moving Toward a Hybrid Model

Some businesses aren’t ready to go fully on-premise, and that’s fine. A hybrid model gives them the best of both worlds: use cloud storage for infrequent access and on-premise for high-demand workloads. This model also supports edge computing environments where data needs to stay close to where it’s generated.

Conclusion

Cloud egress fees can silently consume IT budgets, turning low-cost storage into an expensive liability. For businesses with data-heavy workflows, these charges add up fast and hurt long-term scalability. By switching to S3 Object Storage on Premise, companies eliminate egress fees, regain control, and unlock better cost visibility. It’s not just a technical decision—it’s a financial one.

FAQs

1. What are cloud egress fees?

Egress fees are charges incurred when data is moved out of a public cloud environment to another location. This includes downloads, transfers to other clouds, or external access.

2. How do I know if my company is paying too much in egress fees?

Look at your monthly cloud bill for “data transfer out” or “egress” line items. If you’re consistently transferring large volumes or see unpredictable spikes, you’re likely overpaying.

3. Does switching to on-premise storage eliminate all cloud costs?

No, but it removes recurring egress fees. You’ll still have costs like hardware, maintenance, and electricity—but these are typically easier to forecast and control.

4. Is on-premise storage harder to scale than cloud storage?

It can be, but modern systems support modular expansion. Start small and scale horizontally as needed, especially if you work with vendors that support object-based architectures.

5. Can I use both cloud and on-premise storage together?

Yes. A hybrid model lets you optimize for both cost and performance. Store cold data in the cloud and keep hot or frequently accessed data on-premise.