In the IT world, repatriation is when companies return their services, applications or data from the public cloud to the internal cloud, whether to the private cloud or on-premise. After years of utilizing the offerings of major cloud computing service providers such as AWS and Azure, the evidence – both anecdotal and research – suggests that the tide has turned and companies are looking to regain full control.
For example, the Barclays CIO Survey found that the “share of respondents planning repatriation rose from 49% in the first half of 2021 to 69% in the second half.” In the first half of 24 this had risen to 83%, which is “the highest value since the survey was conducted”. Interestingly, storage and databases were the most likely assets to be moved back to the private cloud or on-premise.
But why are companies choosing to repatriate now? And how difficult is it to do this effectively?
Product Manager at Cloudhouse.
A costly service without electricity?
One of the main reasons for the move to repatriation is of course cloud cost management. Reducing fees paid to service providers has become a necessary step, especially in an uncertain economic landscape. Yet this is not the only factor. The hype around the cloud grew so much that it is also starting to level off naturally. Why be tied to the cloud with managed services or serverless offerings when you can now run them on your own hardware and have complete ownership?
The continued evolution of cloud services and the methods cloud providers use to extend their services are adding even more costs to customers. This constant change in services to suit what customers may want and need also means that organizations need to change the way their own services work to get the most out of the new features – but crucially, without wondering how much this will to their monthly cloud subscription. account. The fear of falling behind by not adopting new products inevitably results in higher cost structures, even if the new services may not be needed.
But as public cloud usage begins to run out, what do organizations need to effectively achieve repatriation?
A step that requires careful consideration
Here too, costs – and capital investments – are the first item on the agenda. Very simple: do you have sufficient investments available and are you ready? Cloud costs generally fall under operational expenses. However, building or redeploying an on-premise cloud will likely be capitalized and therefore need to be budgeted appropriately.
Additionally, organizations must take a proactive approach to training, learning and skills enhancement. In today’s businesses, on-premise clouds are evolving at the same pace as public clouds – requiring a similar level of skills, cloud management and tools to operate them. CIOs must therefore honestly assess whether they can make the investment in people and skills to do this internally. If this is not the case, repatriation itself may not be the best course of action.
An assessment of these areas must take place before any repatriation begins, not only to ensure that CIOs have support from the senior level, but also to mitigate any potential risks – and this is something that needs to be seriously considered.
Before companies retire from the cloud, they must decide whether they want to run solely on the mainframe or whether they are still looking for the benefits of the cloud. If the latter, careful consideration needs to be given to identifying how IT can still deliver these benefits, including facilitating virtualization, containers and internal adoption of these technologies.
Is the future hybrid?
With the vast majority of CIOs looking to repatriate, how will this trend evolve in the coming 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 phenomenon may be playing out between cloud and on-premise solutions. From cost to safety to flexibility, customers are taking these factors into account and are finding that owning the base metal and taking an on-site approach is not necessarily a bad strategy.
When it comes to the cloud, it’s all about the ‘right’ approach. If it makes sense and gives the business the flexibility and scalability it needs, use it – and the same goes for on-premise. In this light, having one or the other is not always a necessary solution. That’s why many are choosing hybrid approaches because, like working patterns, it suits them best and gives them the benefits of both worlds.
The right approach
Rising costs and declining hype around the cloud are major reasons driving the growing trend towards repatriation. Companies want to regain control and manage their services internally, both on private clouds and on-premises. However, CIOs must think carefully to honestly assess whether a repatriation is both possible and beneficial. If they don’t have the budget or skills, it could mean more risk than good.
As more CIOs look to repatriate, a hybrid approach is emerging, where self-ownership is not seen as a bad thing, but the benefits of both cloud and on-premise are explored and integrated into business operations. As with any decision, it is wise to make it if it is well thought out, fits well and suits you best.
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