Cloud Repatriation

Making the Right Cloud Choices

Cloud computing has enabled companies to scale their operations quickly and efficiently without the need for large upfront investments in physical infrastructure. It has also allowed companies to expand their operations without heavy investments in physical infrastructure. Companies have also seen a reduction in IT maintenance costs, as cloud providers manage software updates and hardware. Research has indicated that companies have reduced up to 40% of Total Cost of Ownership (TCO) by migrating some of their business operations to the cloud 1 .

Cloud adoption has helped companies save not just discretionary costs but also full operational costs. While it certainly reduces discretionary spending, such as the need for on-premise servers and infrastructure, its impact extends to core operational expenses. This pay-as-you-go model offered by public cloud companies has benefited not just large corporations but smaller companies and start-ups too. They can get access to high end infrastructure and optimise costs in a VUCA-prone 2 world.

The Public Cloud Conundrum

As of today, over 90% of companies across the world use the cloud. Over the past few years, with the rapid adoption of cloud, companies faced a lot of pressure to optimise support costs and or discretionary costs. However, with wider adoption of the cloud, a significant portion of the operational costs could also be aligned to the revenue increases. While the public cloud offers a pay-as-you-go model, which can be cost-effective for short- term needs, many companies now find that long-term usage results in unforeseen costs. Cloud spending can escalate rapidly due to data egress fees, over-provisioning, or under- utilisation of resources. In addition, with businesses that have seasonal or geographic fluctuation, accurate estimation of cloud spending becomes a challenge.

While public cloud environments proffer significant benefits to companies, there are also challenges. In multi-cloud environments, it can be difficult to maintain visibility and control over data, which can increase the risk of cyberattacks and data breaches. Another concern is data sovereignty. Given that most public cloud providers are based in the US, companies in other regions, such as India, face the challenge of maintaining the integrity of their data. Escalating geopolitical tensions worldwide, coupled with increasingly stringent data privacy regulations in various countries, are further driving the need to move away from public cloud solutions.

Cloud Repatriation Addresses Concerns Around Public Cloud

Cloud repatriation refers to the process where businesses move their workloads, applications, or data from a public cloud infrastructure back to on-premises systems or private data centres. The decision to repatriate cloud workloads is driven by several factors, including cost management, enhanced security, performance requirements, and regulatory compliance. A research among 350 IT leaders in the US indicated that 42% were considering moving to on premise infrastructure, with many citing security concerns and misaligned project expectations as the key reasons 3 .

1.https://www.accenture.com/nl-en/blogs/insights/cloud-trends

2.Volatility, Uncertainty, Complexity, and Ambiguity

Cloud repatriation offers four key benefits:

Data sovereignty: Cloud repatriation allows businesses to regain control over their data by moving workloads from public clouds to on-premises or private data centres, addressing concerns around data sovereignty. This ensures that sensitive data remains within specific geographic or legal boundaries, helping companies comply with local regulations. It provides greater control over where and how data is stored and accessed, reducing reliance on foreign cloud providers.
Cost savings: Many companies recognise that maintaining predictable, non-elastic workloads on-premises or in private data centres can be more cost-effective. With cloud repatriation, businesses eliminate ongoing public cloud operational costs and regain the ability to optimise hardware investments over time. For Indian companies, the constant fluctuation in the value of the rupee against the US dollar can result in unpredictable cloud costs, since most major cloud providers such as AWS, Azure, and Google Cloud price services in dollars.
Improved control: Running infrastructure in-house or in a hybrid environment or in- country provides organisations with full control over their environment, from hardware selection to data storage policies. This autonomy is critical for enterprises with specific performance, security, or compliance requirements that cannot be met by a public cloud provider. They can implement stricter security measures that suit their own needs.
Enhanced data security: For companies handling highly sensitive or confidential information or government related, repatriating workloads allows for better control over security protocols and data access.

The concept of cloud repatriation has been around for a few years, with success stories highlighting carefully planned strategies rather than rushed decisions made for the wrong reasons. For instance, file hosting company, Dropbox invested over $50 million 4 to move their data to private infrastructure. Over a period of 2 years, the company reportedly saved $75 in their infrastructure costs by moving data off a public cloud 5 . Another example is Basecamp, a project management platform company that left the cloud. The company reportedly spent $3.2 million on the cloud in 2022. Over the subsequent five years, they expected to save over $7 million 6 .

Is Cloud Repatriation the Right Move?

Cloud repatriation is not a quick fix or a one-size-fits-all solution. While some organisations are moving away from the public cloud due to cost, performance, and security concerns, others continue to find value in the scalability and innovation offered by cloud providers. The answer may not lie in moving to on-premise infrastructure which can wash away the cost, scalability, and flexibility that public clouds offer. On-premise infrastructure can also add significantly to the cost and resource management burden.

3. https://www.citrix.com/news/announcements/feb-2024/research-finds-it-leaders-are-choosing-hybrid- cloud-strategies-due-to-flexibility-costeffectiveness-and-security.html

4. https://virtuslab.com/blog/business-insights/what-is-cloud-repatriation/

5. https://www.techtarget.com/searchaws/blog/AWS-Cloud-Cover/Dropbox-is-likely-an-outlier-with-its- successful-cloud-data-migration-off-AWS

6. https://basecamp.com/cloud-exit

The future likely lies in a hybrid approach, allowing businesses to choose the right environment for each workload based on specific requirements. Whether a company opts for cloud repatriation or remains committed to the public cloud, the key is to evaluate workloads, cost structures, and performance needs carefully. Businesses should remain agile, prepared to adjust their strategies as technology evolves and as the demands of their industries change.

Elevating digital frontiers with a promise to enhance your business agility, security, and innovation.

Contact Us

105, Dr. B. Ambedkar Road, Lalbaug, Mumbai – 400 033, India

1800 209 0210