- AWS' multicloud interconnect goes GA, with Oracle as a new partner
- The service shifts the pricing model after customers complained about data transfer fees
- AWS is looking for more than just cloud partners – it’s also eyeing telcos
The cost to move data between clouds is painful for enterprise customers worldwide. But it seems like AWS’ efforts to streamline multi-cloud interconnections could completely upend the traditional model around egress fees.
To understand why, you have to know two things. First, while the major hyperscalers ditched egress fees for those completely leaving their environments years ago, pay-as-you-go fees remained for data customers transferred back and forth on a daily basis.
Second, you need to know what AWS Interconnect – Multicloud is. Introduced at AWS re:Invent in December 2025, Interconnect is a fully managed service that streamlines provisioning network bandwidth between clouds. AWS is removing the manual work of provisioning – worrying about location, security and physical elements like ports – to provide customers a click-to-connect product.
AWS initially launched in preview with connectivity to five Google Cloud regions, and the hyperscaler announced general availability this week.
Rob Kennedy, AWS VP for Network Services, told Fierce it’s planning to launch a handful of zones with Microsoft and at least one with Oracle this year. AWS has also invited neoclouds and smaller cloud providers to come aboard, though all participants have to meet strict benchmarks around API functionality, security, location and link redundancy to participate.
Ultimately, “our intention is to get every single region globally covered,” Kennedy said.
The egress equalizer
So, what does this have to do with egress fees? Well, Kennedy noted that the launch of Interconnect – Multicloud provided “an opportunity for us to rethink how we have priced things.”
“There’s been a lot of chatter about data transfer and costs…At the end of the day customers wanted simpler pricing models,” he explained. While the pay-as-you-go model has been “transformative” for a lot of folks, customers want a flat-rate charge model, he said.
“We basically took it and said ‘Okay, you pay by bandwidth.’ So you can transfer as much data as you want back and forth within the bandwidth that you pay for,” Kennedy said. “Within that bandwidth limit, you are free to transfer whatever you want and there will be no extra charges.”
Given AWS’ ambitions to deploy its multi-cloud interconnect service globally, you can see how this could completely change the model around data transfer, particularly as more AI workloads are deployed and agentic AI kicks in.
How it works
While AWS is removing the manual labor customers have traditionally had to do for interconnects, that doesn’t mean that work isn’t being done. It just means AWS and its partners are doing the work themselves, ahead of time.
But at least for AWS, there’s not much of a CapEx lift involved, Kennedy said. That’s because AWS has always deployed a lot of forward-looking capacity.
“These places that we’re interconnecting are the same physical locations that Direct Connect exists today. So we’re taking capacity we would already have available and converting it to this new model,” he said. “We’re reusing capabilities we’ve already built across the world.”
Since AWS has already implemented the Interconnect specification, there’s also not much of a time delay on its end either. The holdup is waiting for partners to both implement the Interconnect APIs and deploy both hardware and capacity.
While Kennedy reiterated that all are welcome to join the Interconnect circle, companies who can meet the spec requirements won’t be allowed.
“It should be open [to all] but you have to do it the right way," he said. "It’s too important to our customers."
Broader ambitions
AWS’ network ambitions actually extend beyond enabling better multi-cloud connectivity. The hyperscaler just announced general availability of its Interconnect - Last Mile service in partnership with Lumen, and Kennedy said AT&T, Amazon Leo and Megaport are also coming aboard.
“We want to shift the paradigm on all connectivity, no matter where it is,” Kennedy said. “Whether it’s the last mile, whether it’s to another cloud…the satellite activity will come in as well. All around the world we want to go do this revolution.”