Cloud repatriation officially a trend... for specific workloads

It's not a mass exodus, say analysts, but biz bods are bringing things down to earth

The reality of the cloud market is that many organizations find it doesn't live up to their expectations, leading to a growing trend of workloads being repatriated back on-premises or to private cloud environments.

This is according to IDC, which notes that one of the major drivers for cloud adoption was the promise of cost savings, yet many businesses have found themselves spending more on cloud resources than they anticipated.

The market watcher quotes its own survey stats which indicate about half of cloud buyers spent more on cloud than they expected in 2023, with 59 percent of users predicting there will be similar cost overruns during 2024.

Part of the issue here is the complexity of cloud environments, coupled with unforeseen factors that can make it challenging to accurately forecast costs.

This is something The Register has noted before, pointing out that cloud is not necessarily easier to manage than looking after your own infrastructure, and presents a different set of management challenges. This can result in over-provisioning of resources and idle or underutilized assets such as server instances that are still being metered even if they aren't being used.

IDC vice president of Consulting and Research Daniel Saroff, lists some of the reasons why organizations might opt to bring their cloud workloads back to their own infrastructure. 

These include the cost overruns already mentioned, but performance and latency issues are also common complaints, especially for applications that require real-time processing, with technical and AI-related workloads often hitting performance bottlenecks in public cloud environments.

Another area is security and compliance concerns, particularly for sectors such as finance and healthcare, where data privacy is paramount. Production data and backup/disaster recovery processes are among the most repatriated elements of workloads, Saroff says.

Then there is the greater operational control that having workloads on your own infrastructure allows, where organizations are able to tailor their systems to specific needs and optimize how they use resources.

Saroff claims that while repatriation is a growing trend, it is not a wholesale mass migration away from the public cloud platforms. Only 8 to 9 percent of companies plan a total workload repatriation, with the typical picture being that organizations repatriate specific elements of their workloads, such as production data, backup processes, and compute resources.

That didn't stop cloud giant AWS from citing repatriation as a threat its business faces when giving evidence to Brit watchdog the Competition and Markets Authority (CMA), as part of the latter's ongoing investigation into whether the big players engage in practices that may limit customer choice.

Meanwhile, one example of a company that publicly decided to bring everything back from the cloud is web software biz 37signals, developer of project management platform Basecamp.

The company recently disclosed that it has saved almost $2 million in its first "clean year" after allowing various contract commitments with AWS to expire. The announcement it had decided to quit the cloud and repatriate everything followed a cloud bill for $3,201,564 back in 2022.

However, IDC says that larger organizations are typically the ones more active in repatriating workloads, compared to smaller businesses. This is due to their greater resources, while comprehensive workload strategies also play a part. ®