Is it really marching back to on-prem from the public cloud?

It turns out that using the cloud is costly, and that the more workloads you move there, the more it will cost. Oh, right.

Between 2021 and 2022, when we were in the “growth at all costs” phase, it was simple to downplay or ignore the expenses related to using the cloud. But when businesses began scrutinizing each expense in the technology budget, it became pretty obvious that the cloud costs were high and steadily rising, and perhaps we should look for ways to reduce that impact on the budget.

Saying “let’s just move back on-prem!” would be the most forceful course of action. However, there are significant issues with this strategy. Why did you initially switch to the cloud? Perhaps you believed there would be a cost savings. However, even if you were mistaken, the public cloud’s primary selling point has always been its agility.

Consider the bad old days of on-prem, when capacity planning was necessary. You were essentially stuck if your business expanded more quickly than you had anticipated, which left it in a very vulnerable position. Corporate procurement has always been a laborious, time-consuming bureaucratic nightmare. Prior to purchasing servers, you must plan how you will rack and stack them. Do you still have the personnel with that skill set, even if you want to do that? It’s likely that you have been hiring for a cloud DevOps environment.

While some workloads can be moved more easily than others, earlier this month, Ofcom, a U.K. communications watchdog, released a report criticizing the leading cloud infrastructure players for making it too difficult to move workloads between clouds — and presumably back on-prem, if that was the desired outcome. How does it make sense for businesses to do that if it is really that expensive and difficult?

I made the decision to find out if businesses really wanted to go back on-premise. It appears that the cloud repatriation idea is being greatly exaggerated, despite the fact that I asked a group of industry experts about it and received a decidedly mixed set of responses.

The market for cloud infrastructure is enormous and expanding.
Let’s start with the size of the cloud infrastructure market, which is enormous despite the fact that it is slowing down due to the generalized economic unpredictability. In 2022, the market had grown to over $200 billion. According to Synergy Research, the fourth quarter saw a 21% increase to $61 billion. Even though it was less than the previous year, when the market expanded by 36%, it was still a sizable market by any standard.

According to the numbers, the cloud market is still expanding quickly; in 2022, global spending on cloud infrastructure services increased by 26% from 2021, despite issues in China and a significantly stronger U.S. dollar, while enterprise on-premises infrastructure investment is still declining, according to John Dinsdale, chief analyst and research director at Synergy Research. “Servers delivered to businesses increased by 3% in 2022. We will continue to predict that the cloud market will grow rapidly and on-premise infrastructure will grow slowly in the future.