{"id":27886,"date":"2022-11-23T06:13:43","date_gmt":"2022-11-23T11:13:43","guid":{"rendered":"https:\/\/www.eginnovations.com\/blog\/?p=27886"},"modified":"2024-08-28T08:37:58","modified_gmt":"2024-08-28T12:37:58","slug":"on-premises-cloud-first-or-cloud-repatriation","status":"publish","type":"post","link":"https:\/\/www.eginnovations.com\/blog\/on-premises-cloud-first-or-cloud-repatriation\/","title":{"rendered":"On-premises, Cloud First or Cloud Repatriation – What’s the Trend? Which is Best?"},"content":{"rendered":"
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Should you leave the cloud? Is cloud migration reversing? Is cloud repatriation a growing trend? On-premises vs. Cloud \u2013 which is best?<\/a> How do you futureproof your IT and protect your business through recession or uncertainty, whether that\u2019s in Cloud or On-prem? Today\u2019s article is about keeping your options open within the context of recent economic and technological trends.<\/p>\n

Last updated March 2024: we’ve been keeping this article updated as the stories around this have evolved.<\/em><\/p>\n

<\/span>On-premises, Towards Cloud and Cloud Repatriation<\/span><\/h2>\n

The Cloud vs On-prem debate continues to evolve from the IBM Mainframes and dumb terminals models of 1960\/70s to on-prem PCs, workstations and servers in the 1990s\/2000s, to cloud and thin-clients via VDI<\/a>. The balance of costs, flexibility, security, risks, and ease of deployment and management fluctuates and evolves constantly in an ever-changing world.<\/p>\n

Whilst there is a continual push towards migration to the cloud, there is and has always been a steady (smaller) reverse flow of migration back to on-premises solutions, often called cloud repatriation. When a high-profile business takes steps to cloud repatriation it makes other organizations re-evaluate whether anything has changed and whether their own Cloud usage is still the most appropriate. Today I\u2019ll cover a few of the most recent data points against which people are evaluating cloud migration strategies and cover ways to future-proof your IT infrastructure to allow you to leverage on-premises or Cloud technologies interchangeably.<\/p>\n

CIO published a good article in the context of the pandemic rush to cloud that provides good context against which to consider recent debate, see: CIOs contend with rising cloud costs | CIO<\/a>.<\/p>\n

Update Feb 2024:<\/em> An article quoting figures showing significant levels of cloud repatriation in some geographies, see: Cloud repatriation: Why companies are leaving the cloud | InfoWorld<\/a>. Contains a very good point – “Cloud is a good fit for modern applications, but most enterprise workloads aren\u2019t exactly modern”.<\/p>\n

<\/span>Basecamp – \u201cWhy we\u2019re Leaving the Cloud!\u201d<\/span><\/h2>\n

\"\"The debate has kicked off again largely in part to a widely circulated blog titled \u201cWhy we\u2019re leaving the cloud!\u201d<\/a> posted by David Heinemeier Hansson about why Basecamp (hey.com) plan to leave public cloud and move back to on-premises IT infrastructure. A lot of the arguments around leaving cloud are around having a fairly stable business pipeline with steady slow growth and the costs of cloud. I can\u2019t help but feel the very public declaration of _intent_<\/em> to leave is a dig at their current cloud providers\u2019 pricing models \u2013 perhaps a data point in itself towards the value of a multi-cloud strategy and the use of cloud-independent tools. There is a fair bit of commentary around the Basecamp announcement – see Basecamp decamps from cloud: Renting computers a ‘bad deal’ \u2022 The Register<\/a> and Basecamp and Hey move off of the cloud – DCD (datacenterdynamics.com).<\/a><\/p>\n

\"\"<\/p>\n

Update 11th January 2023:<\/em> More information on Basecamp and Hey’s moving from the cloud journey has been released, SUSE and other vendors’ enterprise pricing is proving challenging, provoking more debate around and comparative data on Cloud vs. On-prem costs – see: The only thing worse than cloud pricing is the enterprisey alternatives (hey.com)<\/a>. Comments around this article on forums such as LinkedIn are very interesting, see: (1) Post | LinkedIn<\/a> and https:\/\/www.linkedin.com\/posts\/david-heinemeier-hansson-374b18221_the-only-thing-worse-than-cloud-pricing-is-activity-7018596175758938112-vpIt<\/a>. An easy to consume summary from The Register is now also available, see: Basecamp details $3.2 million bill that saw it quit cloud \u2022 The Register<\/a>.<\/p>\n

Update 21st Feb 2023:<\/em> Some more numbers \/ math from Basecamp – current estimations \/ calculations are they may save $7M over 5 years, details here: We stand to save $7m over five years from our cloud exit (hey.com)<\/a>. Update 22nd Feb 2023<\/em>: Another update covering values\/ethics driving the decision beyond and including costs: Five values guiding our cloud exit (hey.com)<\/a>.<\/p>\n

Update 2nd March 2023:<\/em> Meanwhile, Uber have been doing some number crunching and come to the conclusion going all in on cloud and ditching on-prem is for them: Uber Ditches On-Prem and Hooks Future to GCP and Oracle Cloud (datacenterknowledge.com)<\/a>, a interesting choice of multi-cloud strategy with a mix of Oracle and GCP, Google probably not surprising since I imagine their expertise in mapping is particularly relevant to Uber.<\/p>\n

Update Feb 2024:<\/em> Some really interesting financial figures on Basecamp’s repatriation were recently released – see: (2) Post | LinkedIn<\/a>\u00a0and The Big Cloud Exit FAQ (hey.com)<\/a>.<\/p>\n

<\/span>Huh? – Didn\u2019t Zynga Do This a While Back?<\/span><\/h2>\n

\"\"Veterans may remember Zynga very publicly implementing a cloud repatriation strategy back in 2009. Zynga were the folk behind Farmville, a game that exploded in popularity, growing with a then nascent Facebook. Leveraging AWS, they were able to grow exponentially in revenue, but they ended up with large Amazon bills<\/a>. At this point, they decided that on-premises would be a more cost-effective model.<\/p>\n

Anyway, a few years later, Zynga ditched the repatriation idea and went back to Cloud.<\/a> You can read about their journey in: The Return to the Cloud \u2013 Perspectives (mvdirona.com),<\/a> there were numerous factors involved especially the evolution of the gaming markets particularly on Facebook and in the mobile market that make this not exactly an enterprise textbook case study. Again, a lot of the arguments involved around Zynga\u2019s original decision to invest in on-premises hardware focus on cloud costs at scale.<\/p>\n

<\/span>Data on Cloud Usage Trends including Cloud Repatriation<\/span><\/h2>\n

A few well-socialized and slightly sensationalized headlines don\u2019t really tell the whole picture. The Zynga and Basecamp stories raise factors that are serious considerations but mostly demonstrate that it\u2019s the nuances and micro-details of each individual business that really dictate the optimal choice.<\/p>\n

In general, there is still an overriding sentiment and movement towards cloud (\u201cCloud First\u201d strategies). Particularly in geographies where skill shortages mean finding enough skilled staff to set up and run anything on-premises is very challenging. Although it is worth noting, those committing to a public cloud strategy are often becoming increasingly stringent on local region availability – in January 2023, insurance giant Zurich announced a strategy of migration to AWS centered around new Swiss regions, stating “We look forward to using the new AWS region in Switzerland to support our regulatory reporting requirements.\u201d (see: Zurich Insurance Group plots multiyear move to AWS public cloud | Computer Weekly<\/a>).<\/p>\n

eG Innovations regularly conducts surveys on cloud usage and our recent data still confirms an overall trend towards cloud services. These are large survey sets with typically 500+ or 1000+ that may help those making decisions present supporting data for strategies:<\/p>\n