The Phenomenon of “Cloud Repatriation”

The trend of “moving to the cloud” has significantly impacted the IT industry since 2010, and its influence has expanded to nearly every sector. Today, almost every company has some component of their business in the cloud, whether a single application or their most crucial workloads. 

However, the public cloud is not perfect. Recently, many enterprises have begun to realize that many aspects of the cloud architecture do not meet their needs, and the cloud adoption process is not as smooth as expected. This has prompted more enterprises to shift away from the cloud and back to on-premise infrastructure, a phenomenon that can be called “Cloud Repatriation”.

The phenomenon of Cloud Repatriation has gradually grown in the past few years as different enterprises continue to adjust and optimize their cloud strategies. Rather than outsourcing to a public cloud service provider, some businesses think they should manage their own private cloud. We believe that the two major factors of such a move are cost and innovation.

The public cloud requires additional costs for bandwidth, storage capacity, and data transfer. Even though public clouds are convenient for businesses by allowing them to instantly scale cloud infrastructure on-demand, everything has a price: that means the costs can escalate rapidly as a result. It is not uncommon for companies to feel shocked when they receive bills for cloud services. A well-known social platform once received a high bill after the peak holiday season in the United States. It turns out that people frequently use the digital clipboard feature during the holidays, forcing companies to purchase additional cloud space to meet the sudden surge in storage needs. The company spent $190 million on cloud storage that year, $20 million more than expected. 

While companies are gradually gaining a better understanding of their size and needs, they can assess their own IT requirements more correctly and choose appropriate configurations.

The advantage of using an on-premises architecture with full autonomy is the ability to customize different systems for different departments, workloads, and performances. In addition, large-scale enterprises can achieve economies of scale through private clouds. They have the flexibility to manage sudden aggregate demand; they can also use a multi-cloud architecture when demand peaks, running their core computing needs on an infrastructure optimized for cost and performance. For most environments and workloads, it is estimated that building a local private cloud can save about 30-50% of the cost compared to a public cloud.

Innovation is the second-factor driving cloud repatriation. When a new server, storage, networking or infrastructure components come out, they can deliver more performance per watt for specific applications, allowing businesses to improve performance while saving money. The enterprise can configure the appropriate hardware combination according to the specific task if a private cloud is built in an on-premises data center. For example, they can choose the best-performing CPU for certain tasks, while using a previous-generation CPU for other tasks that are less demanding. This strategy also applies to the allocation of server memory, networking, and storage. Choosing the right CPU, RAM, and local storage capacity for the server helps the companies to save money as well as satisfy the demands of employees and customers.

Going forward, companies around the world will conduct more thorough studies when evaluating cloud strategies. While these enterprises choose the most ideal hosting solutions according to their respective workloads and environments, they will be able to better appreciate and reap the benefits of cloud computing. The stakes are high, but the potential cost savings and spurred innovation are immense in today’s competitive market.

Dataplugs provides dedicated servers and colocation services in tier 3+ data center in Hong Kong, with a 99.9% network uptime guarantee. Feel free to contact us at email sales@dataplugs.com if you are interested to build your own private cloud at our data center.