Breaking Down Cloud Repatriation: Why Are Firms Leaving Cloud?

Imagine this: you are an IT Director of a medium-sized company, and a few years ago, you decided to relocate most of your company’s data and applications to the cloud. In the beginning, everything ran smoothly, and you were thrilled about all the advantages the cloud has brought you, including lower infrastructure costs and flexibility to your employees, who could access data and applications anytime and anywhere.

Nevertheless, after some time, you started to notice particular challenges. Your costs of data storage multiplied and continued to rise exponentially; unexpected problems with the performance of some of the applications occurred, and data security became a focal point. 

Suddenly, you realized the cloud wasn’t the silver bullet you had hoped it would be. That’s why you decided to move some of your data and applications back on-premises in a process known as ‘cloud repatriation.’

In this blog post, we will examine the growing trend of cloud repatriation and explain the reasons behind why still more and more organizations are leaving the cloud.

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What is Cloud Repatriation?

Cloud repatriation, also called ‘reverse migration’ or ‘unclouding’, is the process of migrating applications and data hosted in the public cloud back to on-premises infrastructure or a private cloud environment hosted by a data center provider.

In all cases, cloud repatriation involves transferring computing resources and storage close to a company’s physical location, thanks to which the company retrieves control over its infrastructure. This allows addressing emerging challenges more effectively and leveraging the benefits, such as enhanced data sovereignty, improved security, increased performance, and better cost optimization.

As organizations, which have moved their data and applications to cloud, gain a deeper understanding of the advantages of maintaining workloads on their own premises, many decide to reverse their decision. Recent findings from a survey of over 100 IT professionals show that nearly 40% of companies with prior experience in the public cloud have migrated their systems back to in-house data centers.

5 Reasons to Leave the Cloud

The main reasons for cloud repatriation are cost considerations, a need for visibility and control, performance optimization needs, data security concerns, or regulatory compliance requirements.

1. Cost considerations: Out of all these possible drivers of cloud repatriation, the cost seems to be the predominant factor in most cases. As the utilization of cloud services increases, the associated operational expenses also rise, posing a potential threat to IT budgets and even impacting profits. The most well-known cloud providers, such as AWS and Azure, offer pricing structures that are often subject to change, and they also charge the so-called egress fees that are calculated per megabyte of data, which is why cost increases with the rising amount of data. All in all, these pricing structures cause organizations to pay more for cloud services instead of what was initially expected.

2. Need for visibility and control: Another prominent reason for cloud repatriation is the lack of control organizations have over their data in cloud environments, especially when it comes to determining the hosting location of their application workloads or the storage location of their data. Companies often face limitations imposed by their providers and rarely possess complete control over data management. In contrast, internal IT teams have complete ownership and control over their data within an on-premises setting, allowing them to retain all information and choose hardware and software that best suits their objectives.

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3. Performance optimization needs: Some companies even experienced problems with performance due to some cloud providers not offering adequate capacity and functionality to meet the needs of their customers. Besides, keeping applications in public clouds can, in certain regions, result in decreased performance due to limited bandwidth and significant latency issues.

4. Data security concerns: Almost half of the data breaches in 2022 were primarily attributed to misconfigurations in the cloud. Although robust cybersecurity solutions are accessible to safeguard company cloud infrastructures, the cost of implementing them surpasses the security budgets of most companies. That is why many companies return to on-premises data centers, which with their private and secure nature, provide improved data privacy and security for businesses.

5. Regulatory compliance requirements: The cloud is also governed by different regulations. Each business is responsible for implementing security controls and compliance with these regulations. However, managing complex regulatory frameworks in the cloud presents more significant difficulties as organizations lack complete control over the cloud infrastructure. As companies are still impacted by data protection regulations and contractual obligations, they might be inclined to bring their workloads back on-premises.

Many companies have already undergone cloud repatriation, and even more might in the future begin to migrate applications and data back to traditional data centers. Like any technology, cloud computing is more suitable for certain purposes than others. Based on what organizations believe is most effective for their business operations, they decide whether to remain in the public cloud or bring their operations back on-premises.

In case you are one of the companies that have chosen to move back on-premises, we can help you with the maintenance and spare parts for your data center. In case of any inquiries about our TPM or refurbished data center hardware, do not hesitate to email us at sales@nordiccomputer.com or by filling out the contact form below.



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Image sources:

Photo by Ian Battaglia on Unsplash

Photo by Taylor Vick on Unsplash