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February 26, 2021updated 31 Mar 2023 9:15am

Cloud remorse: 72% of companies have moved workloads back on-premise

Repatriating services to on-premise or private servers is becoming common as companies reconsider strategies.

By Matthew Gooding

The gradual move of IT systems into the cloud now seems unstoppable: cloud accounted for 9.1% of global IT spend in 2020, according to market researcher IDC, and will grow to 14.1% by 2024. But the path towards cloud may not be a straight line, a new survey suggests, with the majority of IT professionals revealing that they have moved systems back on-premise after failed cloud deployments.

Out of 350 UK and US-based IT professionals surveyed by Arlington Research on behalf of cloud migration company Virtana, 95% say their organisations have migrated systems to the cloud, with 68% having shifted a quarter or more of their IT estate.

But 72% have ‘repatriated’ one or more services back on-premise after finding the reality of the public cloud services didn’t match their expectations. “It’s evident that these organisations are drastically misjudging the impact of migrating their applications and workloads to the public cloud environment,” the report says.

Why are businesses moving out of the public cloud?

The most common reason cited by respondents (41%) was that processes should never have moved in the first place. “The inference is that these organisations had insufficient information to make the right decisions about which applications to migrate and which should remain on-premises,” the authors suggest. Poor performance of public cloud servers was another key factor in repatriations.

Although they run counter to the prevailing move to the cloud, the findings match the experiences of Tom Christensen, CTO and customer advocacy for Northern EMEA at data infrastructure provider Hitachi Vantara.

“We had a big system integrator in the Nordic region that made it a strategy to move 80% of its workloads into the public cloud,” Christensen recalls. “They spent three years trying and they only managed to move 10%, and finally decided to shut down the project and keep running it on-premise instead. You see it a lot with complex workloads like databases. People try and move them to the cloud and it suddenly becomes very expensive, so they bounce back into the data centre.”

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Christensen says companies that end up ‘repatriating’ apps are often those that take a “lift and shift” approach to their migration, moving existing system into the cloud without making any changes. “This is what I would describe as the ‘rush to cloud’, and it costs a lot of money,” he says. “When these customers realise [the cost] they often bounce back.”

Cloud repatriation: private vs public cloud

The survey revealed another reason why IT leaders might encounter cloud remorse: fewer than half of survey respondents (47%) have full confidence that they know what is running on their public cloud servers. More respondents (60%) are ‘extremely’ confident that they know the contents of their private clouds.

Christensen works with clients moving to both the public and private clouds, and says it is common for organisations to choose public services for their initial digital transformation, then make the move to a private cloud when they realise they can potentially get better value and performance. “People are not moving back to the traditional ways they have done things,” he says. “The key theme is that they still want ‘everything as a service’. So they are moving to the private cloud because it’s all about optimisation and getting more for your money.”

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Factors to consider for a successful cloud migration

The Virtana-backed report concludes that although businesses are “all-in” when it comes to cloud migration, their “ability to truly understand what happens to their applications and workloads before, during, and after migration is at best limited”. It recommends carrying out detailed modelling of “the behaviours and costs of workloads in the public cloud before migrating them”.

Christiensen says it is important to consider a cloud exit strategy as part of any digital transformation. “When we talk to enterprise customers know that the digital transformation of a company is about understanding data and understanding their customers, so they know that they need cloud to do that,” he says. “So they have a cloud-first strategy to focus on getting up to cloud, but they don’t have a cloud exit strategy. You need to know what you’re going to do if you find out the workload you’re putting in is not really working or is too expensive.”

Home page photo by Dabarti CGI Shutterstock.

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