Cloud Repatriation: Is it Happening or Not?
Cloud repatriation, the idea of bringing IT infrastructure and services back in-house from public cloud providers, has been a topic of discussion in the tech industry for years. While some sources claim that it is a growing trend, the data doesn’t indicate a significant shift yet. However, there are some anecdotal examples and potential impacts of AI that suggest the need for revisiting this trend soberly.
Many credible sources have published on the topic. IDC’s 2018 report projected that over the next two years, users expected 50% of public cloud applications to repatriate. This projection seemed extravagant, and it wasn’t sponsored by the organization. The work of Sarah Wang and Martin Casado of Andreessen Horowitz is another widely-referenced study that posits cloud expenses becoming an even more significant component of costs for cloud-native SaaS firms. The report suggested that the rising costs could force either repatriation or a concession in pricing from cloud providers. Dropbox’s $75 million savings via infrastructure repatriation with AWS backs the report’s findings.
Snowflake, meanwhile, renegotiated its contract with AWS in a way that shows that the platform has retired $732 million from its previous committed spend to get a considerable discount. This trend is seen in the broader customer base locking into longer terms with savings plans and committing to a specific spend amount.
According to Lori MacVittie, the relationship between site reliability engineering or SRE skills and cloud repatriation is the driving force behind repatriation. SRE skills make it easier for companies to operate on-premises infrastructure using a cloud operating system. This trend is illustrated by a significant jump from 2021 to 2022 in customers repatriating apps, as shown in the F5 report.
37signals provides an excellent case study for cloud repatriation. The co-founder, Hansson, argues that renting infrastructure for a mid-sized firm today is more expensive than when the company started with new products in the cloud. The company invests in its skills to run software in the cloud versus on-prem. However, 37signals’ skills and economic argument may not apply to most mid-sized companies that lack developer talent and would rather invest elsewhere.
In conclusion, cloud repatriation is a trend that has been under discussion for years. However, while there are some anecdotal cases and potential impacts of AI, the data does not show significant or broad shifts. Yet the trend is worth sober consultation due to AI’s impending influence and the emergence of cross-cloud and hybrid services.
Editor Notes:
The cloud repatriation index, published by Vega Cloud, has done a great job of tracking this phenomenon over the years. Visit the GPT News Room for more insightful articles about technology and its business influences.
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