Now that businesses have deployed modern applications in the cloud they are starting to ask whether it might be more attractive to run these on-premises. This episode of the On-Premise IT podcast features Jason Benedicic, Camberley Bates, and Ian Sanderson discussing the pros and cons of cloud repatriation with Stephen Foskett. A recent blog post by 37 Signals got the Tech Field Day delegates talking about the reality of running modern applications in enterprise-owned clouds, whether in the datacenter or co-located. Certainly the hardware and software are available to move applications on-prem, and some workloads may be better served this way. Most of the necessary components to run modern web applications are available on-prem, from Kubernetes to Postgres to Kafka, but these can prove difficult to manage, which is one of the things as-a-service customers are paying for. Looking back to the debut of OpenStack, enterprises have wanted to run applications in-house but they found it too difficult to manage. OpenShift is much more attractive thanks to the support and integration of the platform, but many customers have financial and administrative reasons for as-a-service deployment. It might not be a mass exodus, but there are plenty of examples of repatriation of modern applications.

Why Companies Are Moving Off of the Public Cloud

A new trend coming out of the enterprise IT industry is cloud repatriation. The chatter picked up when 37signals, a SaaS project management company, publicly announced that it saved $1 million by pulling apps away from public cloud. According to CTO, David Heinemeier Hansson, repatriation has shrunken the company’s cloud spend by 60%, and is projected to save an estimated $10 million over the next five years.

And theirs’ is not an isolated case. Skyrocketing costs of data and storage in the cloud have caused a lot of companies to pull away and migrate back to on premise datacenters in the last few years. Seagate has built its own platform to deploy web applications that runs in their private datacenter on owned hardware. More recently, LinkedIn has called off plans to move workloads from on-site to Azure Cloud.

So are companies really abandoning their cloud computing dreams and hauling wares back to where they started? At the recent On-Premise IT Podcast, host Stephen Foskett addressed this question that’s lately been the talk of Silicon Valley.

Public Cloud Offerings Come at a Premium

When considering relocating technology, the reasonings fall into two main buckets – cost and control. “As we went into 2024, a lot of very large enterprises are concerned about costs. So there is this ongoing effort for cost management, and what is happening is a recalculation or reevaluation of where the workloads are to be placed and why. That workload rationalization has been going on for some time,” notes Camberley Bates, VP Practice Lead at The Futurum Group.

Enterprises’ rationale behind migrating to cloud was to reduce OpEx. The cloud offered an attractive answer to the surging cost problem in on-premise datacenters. The promise however soured as companies started to struggle with cost blowouts.