Companies are partially stepping back from the public cloud and running workloads on-prem again. Cost, performance, compliance and management are the main reasons.
In a blog, IDC talks about a growing trend in the IT landscape: repatriation. This term refers to repatriating workloads from the public cloud to on-prem or a private cloud. This trend is part of a broader movement in the industry toward hybrid multi-cloud IT strategies.
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Large organizations are leading this evolution. This is not illogical, as they have more resources, larger workloads and more complex IT environments.
Promise versus reality
Just a few years ago, the public cloud promised to be the Valhalla for all manner of IT workloads. Cloud was synonymous with scalability, flexibility and cost savings. Those promises have not materialized in reality. IDC identifies four promises where the public cloud has fallen short, which are also the four main reasons why organizations are moving away again.
At the top of the list is cost. That the public cloud is not always cheaper, anno 2024 every company seems to have realized by now. According to IDC figures, half of companies overspent on cloud technology in 2023 and nearly 60 percent expect to overspend in 2024. Although on-prem infrastructure also comes with costs, companies feel they can better manage costs.
Reason two in performance and latency. IDC states that certain workloads do not feel comfortable in the public cloud. Especially for workloads where latency can have a big impact, on-prem is usually the better solution. Other reasons for moving workloads out of the cloud include security and compliance, as well as reducing complexity in IT management.
No mass migration
Companies such as HPE and Nutanix are rubbing their hands when reading IDC’s analysis. The growing trend of repatriation, however, does not mean that companies are turning their backs on the public cloud en masse, according to IDC. Less than 10 percent would consider a complete repatriation from the cloud. The cloud giants’ quarterly figures show that AI, par excellence, is a reason to still invest heavily in public cloud infrastructure.
Still, repatriation could pose a threat to hyperscalers if the trend continues. Market leader AWS itself has already admitted as much to the British market regulator. Is the Golden Age of the public cloud gradually coming to an end?