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HomeBlogsCloud ComputingWhy companies are leaving the cloud
by David Linthicum
Contributor
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WHY COMPANIES ARE LEAVING THE CLOUD

analysis
Feb 09, 20244 mins
CareersCloud ComputingTechnology Industry
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CLOUD IS A GOOD FIT FOR MODERN APPLICATIONS, BUT MOST ENTERPRISE WORKLOADS
AREN’T EXACTLY MODERN. SECURITY PROBLEMS AND UNMET EXPECTATIONS ARE SENDING
COMPANIES PACKING.



Credit: Thinkstock

Don’t look now, but 25% of organizations surveyed in the United Kingdom have
already moved half or more of their cloud-based workloads back to on-premises
infrastructures. This is according to a recent study by Citrix, a Cloud Software
Group business unit.

The survey questioned 350 IT leaders on their current approaches to cloud
computing. The survey also showed that 93% of respondents had been involved with
a cloud repatriation project in the past three years. That is a lot of
repatriation. Why?


COST, NOT CLOUD

Security issues and high project expectations were reported as the top
motivators (33%) for relocating some cloud-based workloads back to on-premises
infrastructures such as enterprise data centers, colocation providers, and
managed service providers (MSPs).



Another significant driver was the failure to meet internal expectations, at
24%. “Unmet expectations” describes most technology trends I’ve been involved
with, including client/server, enterprise application integration,
service-oriented architecture. and now cloud. Those surveyed also cited
unexpected costs, performance issues, compatibility problems, and service
downtime. 

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The most common motivator for repatriation I’ve been seeing is cost. In the
survey, more than 43% of IT leaders found that moving applications and data from
on-premises to the cloud was more expensive than expected. Although not a part
of the survey, the cost of operating applications and storing data on the cloud
has also been significantly more expensive than most enterprises expected. The
cost-benefit analysis of cloud versus on-premises infrastructure varies greatly
depending on the organization. 

None of this should be surprising. The cloud had no way of delivering on the
hype of 2010 to 2015 that gushed about lower costs, better agility, and better
innovation.  Well, two out of three is not bad, right?



The cost of the cloud is where things usually go off the rails. The cloud is
still the most convenient platform for building and deploying new systems, such
as generative AI, and it also has the latest and greatest of pretty much
everything. However, when enterprises run workloads and data sets using
traditional infrastructure patterns, such as business applications that process
and store data the same way they did when on-premises, there is a negative cost
impact to using a public cloud.

In other words, those who attempted to use the cloud as a simple host for their
workloads and took no steps to optimize those workloads for their new location
had much larger bills than expected. Moreover, they didn’t gain any real
advantage by leveraging a public cloud for those specific workloads.

The cloud is a good fit for modern applications that leverage a group of
services, such as serverless, containers, or clustering. However, that doesn’t
describe most enterprise applications.




DON’T FEEL SORRY FOR THE PUBLIC CLOUD PROVIDERS

The cloud providers may be losing workloads and data sets that never should have
been on a public cloud in the first place, but they will still enjoy explosive
growth. Thank the AI gods that shone down upon them the reality that they are
the most convenient place to build and host generative AI applications and data.

Any losses from repatriation will be quickly replaced by the vast amounts of
infrastructure needed to build and run AI-based systems. This includes new
applications as well as existing applications that will be
AI-enabled. Enterprises are also expanding their use of the cloud because AI
systems are processor and storage pigs and need state-of-the-art frameworks,
genAI ecosystems, and large language models that cloud providers are happy to
host. Cha-ching!

As I’ve said a few times here, cloud conferences have become genAI conferences,
which will continue for several years. The cloud providers understand where
their bread is going to be buttered.



This is all healthy if you ask me. I would be concerned if enterprises
understood that the cloud was draining money from IT without a return and kept
moving in that direction. Enterprises are course-correcting for some
applications and data sets that never should have moved to the cloud in the
first place. They didn’t bother to do the math before making the move. I did,
and now they have an expensive “I told you so” coming.


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by David Linthicum
Contributor
 * 

David S. Linthicum is an internationally recognized industry expert and thought
leader. Dave has authored 13 books on computing, the latest of which is An
Insider’s Guide to Cloud Computing. Dave’s industry experience includes tenures
as CTO and CEO of several successful software companies, and upper-level
management positions in Fortune 100 companies. He keynotes leading technology
conferences on cloud computing, SOA, enterprise application integration, and
enterprise architecture. Dave writes the Cloud Computing blog for InfoWorld. His
views are his own.


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