Cloud repatriation is gathering momentum – but is it a wise choice?

In the IT world, repatriation is when businesses bring back their services, applications or data from public clouds to in-house, be it to private cloud or on-premise. After years of companies leveraging offerings from large cloud computing service providers like AWS and Azure, the evidence – both anecdotal and research – suggests the tide has turned and companies are wanting to regain full control.

The Barclays CIO Survey, for example, revealed that the “proportion of respondents planning repatriation rose from 49% in 1H21 to 69% in 2H2”. By 1H24 it had increased to 83%, which is “the highest reading since the survey has been conducted”. Interestingly, storage and databases were the most likely assets to be moved back to private cloud or on-prem.

But why now are companies choosing to repatriate? And how hard is it to do effectively?

A costly service running out of power?

One of the key reasons for the move to repatriation is, naturally, cloud cost management. Cutting back on fees paid to service providers has become a necessary step, especially in an uncertain economic landscape. Yet this isn’t the only factor. The hype around the cloud was building so greatly that it too is naturally starting to level off. Why be tied to the cloud with managed services or serverless offerings when you can now run it on your own hardware and have full ownership?

The continuing evolution of cloud services and the methods cloud providers use to expand their services are generating even more costs for customers. This ongoing change to services to match what customers might want and need also means organizations are having to alter how their own services work to make the most of the new provisions – but crucially, without interrogating just how much this will add to their monthly cloud subscription bill. The fear of falling behind by not adopting new products inevitably results in higher cost structures, even when the new services might not be necessary.

But, if using the public cloud is starting to run out of power, what do organizations need to achieve repatriation effectively?

A move requiring careful considerations

Again, cost – and capital investment – is the first item on the agenda. Quite simply, do you have enough investment accessible and ready to go? Cloud costs generally fall under operational expenditure. However, building or re-implementing on-premise cloud is likely to be capitalized and therefore needs to be budgeted for appropriately.

What’s more, organizations need to adopt a proactive approach to training, learning and skills enhancement. In today’s businesses, on-premise clouds are evolving at the same rate as the public ones – they necessitate a similar level of skill sets, cloud management and tools to operate them. CIOs therefore need to frankly assess whether they can provide the investment in people and skills to do this in-house. If this isn’t the case, repatriating by themselves might not be the best course of action.

An assessment of these areas must take place before embarking on any repatriation, not only to ensure CIOs have buy-in from senior level but also to mitigate any risks – and this is something requiring serious consideration.

Before withdrawing from the cloud, companies need to decide if they will just run on the mainframe or if they are still after the benefits of cloud. If the latter is the case, then careful thought is required to map out how IT will still deliver these benefits, including facilitating virtualization, containers and adopting these technologies in house.

Is the future hybrid?

With the vast majority of CIOs now looking to repatriate, how will this trend evolve over the next few years and what will a typical structure look like?

Just as remote working was followed by many companies settling for hybrid, flexible arrangements, a similar occurrence may occur between cloud and on-prem solutions. From costs to security to flexibility, customers are considering these factors and concluding that self-ownership of the base metal and adopting on-prem approaches isn’t necessarily a bad strategy.

When it comes to cloud, it’s all about having the ‘right fit’ approach. If it makes sense and gives the company the agility and scalability required, use it – and the same applies to on-prem. In this light, having all of one or the other isn’t always a necessary solution. That is why many are opting for hybrid approaches because, just like with work patterns, it suits them best and gives them the benefits from both worlds.

The right fit approach

Increasing costs and falling hype around the cloud are key reasons driving the growing trend to repatriation. Companies are looking to regain control and manage their services in-house, be it on private clouds or on-premise. However, careful consideration is required by CIOs to honestly assess whether a repatriation is both possible and beneficial. If they don’t have the budget or skills, it can bring more risk than good.

As more CIOs look to repatriate, what is emerging is a hybrid approach, where self-ownership isn’t seen as a bad thing but the benefits of both cloud and on-prem are explored and integrated into operations. Like with any decision, it’s wise to do it if it's well thought through, the right fit and suits you best.

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