Cloud Repatriation: Are Companies Moving Away From the Public Cloud?

Cloud Repatriation: Are Companies Moving Away From the Public Cloud?

Cloud repatriation is a fancy term for a simple trend: a firm’s decision to move its workloads away from the public cloud. Recently, this has been a topic of much controversy in the technology industry, with many questioning whether or not it is in fact a trend.

Some industry leaders claim that a company’s move out of the public cloud is indicative of a declining interest In public clouds, perhaps signaling troubling times ahead for the large cloud service providers behind them.

Others, however, claim that this is a misguided approach – the move to somewhere else is not due to dissatisfaction, but rather a testament to how flexible the industry has become. For those people, cloud repatriation is just misguided nomenclature for another industry phenomenon: ‘workload mobility.’

So, is cloud repatriation an actual problem for the industry? Could it signal the beginning of the end for the public cloud?

Not so fast – the answer to these questions requires further examination into why companies are choosing another venue.

Going home: why enterprises choose alternatives

The decision to return certain workloads to on-premises datacenters or private clouds is reflective of a larger industry trend known as hybrid IT. Hybrid IT is essentially a company’s strategy to address its IT needs using a combination (or hybrid) of technologies. In the case of hybrid cloud, companies opt for private or public cloud not as general solutions to all of their needs, but rather looking at which one is most suitable to each workload or application they run.

The interest in moving an application out of the public cloud is simply reflective of the times we live in. Generally speaking, cloud is still a new technology – it emerged recently in the grand scheme of things. As public cloud gradually gained momentum, many enterprises decided to make use of it simply because of the novelty and convenience of putting workloads in the hands of public cloud suppliers.

However, as the years went by, many enterprises became more skilled with the technology, and they are now better positioned to determine the best execution venue – public/off-premises or private/on-premises – for each workload.

Cloud Maturity Brings Organizational IT Change

The public view of repatriation

The industry has still not reached a consensus on repatriation. One’s stance on the issue might depend on what side of the industry one is in. For instance, hyperscalers – the large public cloud providers – might downplay the trend by emphasizing their product’s benefits, such as flexibility and agility.

On the opposite side, datacenter vendors might play up the interest in traditional infrastructure and highlight the possible gains in security and operational control that moving back can bring.

However, data on repatriation is repeatedly taken out of context. Ever since the inception of public cloud services, the industry has asked itself which cloud alternative is superior.

The answer? Well, it depends.

What we see now is that there is no clear-cut best choice, there is only the better choice for an enterprise’s specific needs. Cloud repatriation is indeed happening, but it is not about putting hyperscalers out of business. Rather, it is simply a consequence of hybrid IT practices being adopted by companies seeking more flexibility to address their technology needs.

What the numbers show

In the 451 Alliance Datacenters 2021 survey, 48% of over 600 respondents indicated that they had moved a workload away from the public cloud to another venue in the past 12 months. This might seem like an alarmingly high number at first glance, but it only reflects whether enterprises have had some type of back-to-on-premises experience in the past year. In fact, in a similar survey conducted in 2016, that number was even higher, at 68%.

For the 2021 survey results, 87% of the respondents who had moved a workload opted for some type of self-managed infrastructure, and 85% of those chose their own datacenter. Shadow IT – the unsanctioned use of public cloud – was the top factor behind moving workloads/applications away from hyperscaler public clouds over the next 12 months (25% of datacenter/colocation respondents are planning such a shift). Information security concerns represented the second-most common reason (23% of those surveyed). Application lifecycle considerations (i.e., different IT environments for test/dev and production) emerged as the third-most common (22%), followed by regulatory/governance requirements (18%) and data locality or sovereignty (16%).

Another one of our surveys showed a different story. In a 451 Alliance Cloud survey this year, only 6% of companies surveyed said that they had “repatriated” applications or data from the public cloud in 2020, with 14% planning to do so in 2021. Still, the survey corroborates the fact that a decrease in repatriation has been seen over the years – in the 2016-17 timeframe, 34% of respondents claimed to have moved some workloads away from the public cloud.

The future for repatriation

The term ‘cloud repatriation’ holds a certain negative connotation, indicating that public cloud is somehow inferior and that providers are moving back – permanently – to some other venue. Although both of those statements are inaccurate, cloud repatriation as a phenomenon is likely not going away anytime soon. Companies will continue to move workloads around, not due to disdain for public cloud, but for their own reasons.

This is not the end for public cloud, nor is it a rebirth of sorts for private, on-premises IT. Both alternatives will continue to coexist as the industry grows and our understanding of the technology develops. The preference for hybrid IT reflects new priorities from providers’ point of view, namely flexibility and customization, as enterprises now seek cloud services that will adapt to their needs – and not the opposite.

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