# AWS's Hidden Cost-Cutting Networking Technology How the revolutionary approach in cloud networks impacts customers - **Source:** [www.theregister.com - Articles](https://brifing.si/source/2c34ea50-d341-4a10-925d-12c012a9ad10) - **Published:** 2026-08-29 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/9ca5d788-3c68-4026-954e-619ede3e3b37 ## Breaking Away from Traditional Network Architecture AWS built an entirely new networking stack on commodity hardware, eliminating dependence on traditional vendors. This flat, single-tier, near-randomly connected structure enhances resilience while significantly reducing operational costs. The new system achieves up to 40% better energy efficiency and has become standard in most new data centers. ## Historical Context: James Hamilton's Vision Seventeen years ago, Amazon SVP James Hamilton criticized network vendors' high profit margins reminiscent of mainframe era. This critique laid groundwork for AWS building its own infrastructure. The system operates at much lower costs than traditional solutions. Resilient Network Graph technology further amplified these savings. ## Do Cost Advantages Reach Customers? AWS openly admits retaining most network cost reductions rather than passing them to customers. However, unlike competitors, they haven't raised prices on existing SKUs. A 64GB RAM instance from 2020 costs the same today. Price stability despite inflation provides indirect savings. ## Pricing Policy Examples Upgrade from Graviton4 to Graviton5 carries just 9% price increase and isn't mandatory. Given component cost hikes, this increase remains remarkably low. EC2's hourly rate covers all components including CPU, RAM, security and networking infrastructure - a significant advantage bundling complex systems into single pricing. ## Intra-Availability Zone Data Transfer AWS's standout feature is free data transfer within Availability Zones (AZs), while cross-AZ transfers cost 2 cents per GB. Considering single AZs can span multiple data centers, this policy's savings become clearer. As AZs expand, AWS absorbs these growing costs. ## Multicloud Integration Innovation AWS Interconnect - multicloud switched from per-GB to hourly port charges. One 500Mbps port per provider is free, eliminating AWS-side costs for transfers to GCP, Oracle and soon Azure. Equivalent open internet transfers could cost ~$12,000 monthly. ## Pricing Strategy Shift AWS acknowledges customer dislike for unpredictable rate-based network charges, prompting fixed-fee models for new network products. This strategic shift could mark cloud economics turning point, especially for organizations with large data transfers facing uncertain costs. ## Competitive Analysis Unlike Microsoft Azure and Google Cloud, AWS maintains stable pricing for core services. Except GPU capacity blocks, existing SKU prices remain unchanged. While additional charges exist (like per-IPv4 address), overall picture stays competitive, enabled by AWS's infrastructure efficiency leadership. ## Industry Impact AWS's radical networking changes possess potential to reshape entire cloud industry. While threatening traditional vendors, they offer long-term customer cost benefits. Energy efficiency improvements also support sustainability goals. These innovations are expected to become standard. ## Future Projections AWS's networking advancements will shape cloud computing's future. Whether cost benefits reach customers more directly remains uncertain. However, infrastructure efficiency leadership provides competitive pricing advantage. For multicloud strategy organizations, AWS becomes increasingly attractive option. ## Sources covering this story - https://www.theregister.com/networks/2026/08/29/aws-mumbles-about-its-cost-busting-networking-tech-when-it-should-be-shouting/5293379 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._