English 
Vietnamese After years of fervent adoption of cloud computing, some organisations are now bringing select workloads back on-premises or opting for hybrid approaches. This phenomenon, often referred to as "cloud repatriation," is driven by a complex interplay of factors, including cost, security, performance, regulatory compliance, and control.
This shift, while not a wholesale abandonment of cloud computing, represents a maturing perspective on IT infrastructure strategy. In this blog, we will explore the reasons behind this trend and its implications for IT leaders.
Table of Contents
I. What Is Cloud Repatriation & How Significant Is It?
II. Factors Driving Cloud Repatriation.
III. The Rise of Hybrid Approaches.
IV. Implications for IT Leaders.
What Is Cloud Repatriation & How Significant Is It?
Cloud repatriation, also known as 'reverse cloud migration', refers to the process of moving applications, data, or infrastructure from public cloud environments back to on-premises data centres or private clouds. This trend doesn't negate the cloud's importance but rather highlights a more nuanced approach to IT resource allocation.
To put this trend into perspective, consider these figures:
- According to a 2021 survey by IDC, 80% of organisations reported repatriating workloads or data from public cloud environments.
- A 2022 report by Andreessen Horowitz found that repatriation of cloud workloads could reduce cloud bills by 50% or more for some companies.
- Flexera's 2023 State of the Cloud Report revealed that 71% of enterprises are pursuing a hybrid cloud strategy, combining public cloud, private cloud, and on-premises infrastructure.
Factors Driving Cloud Repatriation
Several factors are contributing to this shift:
1. Cost Optimisation
While the cloud offers flexibility, organisations with predictable, high-volume workloads may find on-premises solutions more cost-effective in the long run.
The initial allure of cloud cost savings can sometimes give way to 'bill shock' as usage scales. A Gartner study predicts that through 2024, 60% of infrastructure and operations leaders will encounter public cloud cost overruns that negatively impact their on-premises budgets.
You can refer to our previous blog to find out why cloud systems may cost more than on-premises ones.
2. Data Sovereignty and Compliance
With regulations like GDPR in force, many organisations are compelled to keep certain data within specific geographic boundaries. On-premises or local private cloud solutions can ensure compliance more easily. The Data Protection Commission reported a 59% increase in GDPR complaints in 2022, underscoring the importance of data sovereignty.
Read more: Challenges in Safeguarding Hotel Data in the Post-GDPR World
3. Performance Requirements
Some applications, particularly those requiring ultra-low latency, may perform better on local hardware. This is especially true for data-intensive applications in fields like financial trading or scientific research. A study by the IEEE found that for certain AI workloads, on-premises GPU clusters outperformed cloud-based solutions by up to 30% in terms of performance per dollar.
4. Control and Customisation
On-premises infrastructure offers greater control over hardware and software configurations, allowing for tailored solutions that may not be possible in public cloud environments.
5. Security Considerations
While cloud providers have made significant strides in security, some organisations still prefer to keep their most sensitive data behind their own firewalls. A 2023 Thales Cloud Security Study found that 45% of businesses have experienced a cloud-based data breach or failed audit in the past 12 months, highlighting ongoing security concerns.
The recent massive global outage caused by cloud-based CrowdStrike software also raises concerns among IT executives about the need to diversify their cloud strategies. (Find out more!)
6. Edge Computing Needs
The proliferation of IoT devices and the need for edge computing have led some businesses to process data closer to the source, often necessitating on-premises infrastructure. IDC predicts that by 2025, there will be 55.7 billion connected devices worldwide, generating 73.1 ZB of data.
The Rise of Hybrid Approaches
Rather than a binary choice between cloud and on-premises, many organisations are finding that a hybrid approach offers the best of both worlds. This allows for:
- Keeping sensitive or high-performance workloads on-premises
- Leveraging cloud services for scalability and innovation
- Maintaining flexibility to adapt to changing business needs
The hybrid cloud market is expected to grow from $85.3 billion in 2022 to $262.4 billion by 2027, according to MarketsandMarkets research.
Implications for IT Leaders
For IT leaders, this trend underscores the need for a thoughtful, workload-centric approach to infrastructure decisions. Here are some key considerations:
1. Conduct thorough cost analyses
Look beyond initial savings and consider long-term total cost of ownership for different deployment models. Gartner estimates that through 2024, nearly all legacy applications migrated to public cloud IaaS will require optimization to become more cost-effective.
Read more: The TCO Dilemma: When Cloud May Actually Cost More than On-Premises
2. Assess workload characteristics
Evaluate each application's performance, security, and compliance requirements to determine the most suitable environment.
3. Invest in skills development
Ensure your team has the expertise to manage both cloud and on-premises environments effectively. The 2023 Global Knowledge IT Skills and Salary Report found that 76% of IT decision-makers are facing critical skills gaps in their departments.
4. Plan for data mobility
Implement strategies and tools that allow for seamless data movement between different environments.
5. Monitor and optimise continuously
Regularly review your infrastructure choices and be prepared to adjust as business needs or technologies evolve. Flexera's report shows that 82% of enterprises have a dedicated cloud team or cloud centre of excellence, highlighting the importance of ongoing cloud management.
Final Thoughts
Cloud repatriation doesn't spell the end of cloud computing; rather, it signals a more mature, balanced approach to IT infrastructure. While the cloud offers numerous benefits, on-premises solutions can provide advantages in terms of cost, security, performance, compliance, and control.
As technology leaders, your role is to navigate this complex landscape, making informed decisions that align with your organisation's unique needs and objectives, and ensuring your IT infrastructure is not just cost-effective and compliant, but also agile and future-ready.
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