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<p>After years of fervent <a href="../../../com/trginternational/blog/evaluate-your-cloud-migration-options.html">adoption of cloud computing</a>, some organisations are now bringing select workloads <a href="../../../com/trginternational/blog/5-questions-cios-following-crowdstrike.html">back on-premises</a> or opting for hybrid approaches. This phenomenon, often referred to as &#8220;cloud repatriation,&#8221; is driven by a complex interplay of factors, including cost, security, performance, regulatory compliance, and control.</p>
<p>This shift, while not a wholesale abandonment of cloud computing, represents a maturing perspective on <a href="../../../com/trginternational/blog/blueprints-enterprises-cloud-strategy.html">IT infrastructure strategy</a>. In this blog, we will explore the reasons behind this trend and its implications for IT leaders.</p>
<p><strong>Table of Contents</strong></p>
<p><a href="../../../com/trginternational/blog/index.html">I. What Is Cloud Repatriation &amp; How Significant Is It?</a></p>
<p><a href="../../../com/trginternational/blog/index.html">II. Factors Driving Cloud Repatriation<span style="color: windowtext;text-decoration: none">. </span></a></p>
<p><a href="../../../com/trginternational/blog/index.html">III. The Rise of Hybrid Approaches<span style="color: windowtext;text-decoration: none">. </span></a></p>
<p><a href="../../../com/trginternational/blog/index.html">IV. Implications for IT Leaders<span style="color: windowtext;text-decoration: none">. </span></a></p>
<h2>What Is Cloud Repatriation &amp; How Significant Is It?</h2>
<p>Cloud repatriation, also known as &#8216;reverse cloud migration&#8217;, refers to the process of moving applications, data, or infrastructure from public cloud environments back to on-premises data centres or <a href="../../../com/trginternational/blog/10-factors-to-consider-when-choosing-your-cloud-deployment-option.html">private clouds</a>. This trend doesn&#8217;t negate the cloud&#8217;s importance but rather highlights a more nuanced approach to IT resource allocation.</p>
<p>To put this trend into perspective, consider <span style="font-weight: bold">these figures</span>:</p>
<ul>
<li>According to a 2021 survey by IDC, 80% of organisations reported repatriating workloads or data from public cloud environments.</li>
<li>A 2022 report by Andreessen Horowitz found that repatriation of cloud workloads could reduce cloud bills by 50% or more for some companies.</li>
<li>Flexera&#8217;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.</li>
</ul>
<h2 style="text-align: center"><img decoding="async" src="https://blog.trginternational.com/hs-fs/hubfs/images/cloud-computing-infor-aws.jpg?width=800&amp;height=400&amp;name=cloud-computing-infor-aws.jpg" width="800" height="400" loading="lazy" alt="Cloud Repatriation: Why Businesses Are Moving Back to On-Premises Systems" style="height: auto;max-width: 100%;width: 800px"></h2>
<h2>Factors Driving Cloud Repatriation</h2>
<p>Several factors are contributing to this shift:</p>
<h3>1. Cost Optimisation</h3>
<p>While the cloud offers flexibility, organisations with predictable, high-volume workloads may find on-premises solutions <a href="../../../com/trginternational/blog/cloud-on-premises-tco.html">more cost-effective in the long run</a>.</p>
<p>The initial allure of cloud cost savings can sometimes give way to &#8216;bill shock&#8217; 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.</p>
<p>You can refer to <a href="../../../com/trginternational/blog/cloud-on-premises-tco.html">our previous blog to find out</a> why cloud systems may cost more than on-premises ones.</p>
<h3>2. Data Sovereignty and Compliance</h3>
<p>With regulations like GDPR in force, many organisations are compelled to keep certain data within <span style="font-weight: bold">specific geographic boundaries</span>. 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.</p>
<p><strong>Read more:</strong> <a href="../../../com/trginternational/blog/unique-challenges-in-safeguarding-hotel-data-post-gdpr-world.html">Challenges in Safeguarding Hotel Data in the Post-GDPR World</a></p>
<h3>3. Performance Requirements</h3>
<p>Some applications, particularly those requiring <span style="font-weight: bold">ultra-low latency</span>, 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.</p>
<h3>4. Control and Customisation</h3>
<p>On-premises infrastructure offers greater control over hardware and software configurations, allowing for tailored solutions that may not be possible in public cloud environments.</p>
<h3>5. Security Considerations</h3>
<p>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.</p>
<p>The recent massive global outage <a href="../../../com/trginternational/blog/5-questions-cios-following-crowdstrike.html">caused by cloud-based CrowdStrike</a> software also raises concerns among IT executives about the need to diversify their cloud strategies. (<a href="../../../com/trginternational/blog/5-questions-cios-following-crowdstrike.html">Find out more!</a>)</p>
<h3>6. Edge Computing Needs</h3>
<p>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.</p>
<h2>The Rise of Hybrid Approaches</h2>
<p>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:</p>
<ul>
<li>Keeping sensitive or high-performance workloads on-premises</li>
<li>Leveraging cloud services for scalability and innovation</li>
<li>Maintaining flexibility to adapt to changing business needs</li>
</ul>
<p>The hybrid cloud market is expected to grow from $85.3 billion in 2022 to $262.4 billion by 2027, according to MarketsandMarkets research.</p>
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<h2>Implications for IT Leaders</h2>
<p>For IT leaders, this trend underscores the need for a thoughtful, workload-centric approach to infrastructure decisions. Here are some key considerations:</p>
<h3>1. Conduct thorough cost analyses</h3>
<p>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.</p>
<p><strong>Read more:</strong> <a href="https://blog.trginternational.com/total-cost-ownership-cloud-cost-more-on-premises">The TCO Dilemma: When Cloud May Actually Cost More than On-Premises</a></p>
<h3>2. Assess workload characteristics</h3>
<p>Evaluate each application&#8217;s performance, security, and compliance requirements to determine the most suitable environment.</p>
<h3>3. Invest in skills development</h3>
<p>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.</p>
<h3>4. Plan for data mobility</h3>
<p>Implement strategies and tools that allow for seamless data movement between different environments.</p>
<h3>5. Monitor and optimise continuously</h3>
<p>Regularly review your infrastructure choices and be prepared to adjust as business needs or technologies evolve. Flexera&#8217;s report shows that 82% of enterprises have a dedicated cloud team or cloud centre of excellence, highlighting the importance of ongoing cloud management.</p>
<h2>Final Thoughts</h2>
<p>Cloud repatriation doesn&#8217;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.</p>
<p>As technology leaders, your role is to navigate this complex landscape, making informed decisions that align with your organisation&#8217;s unique needs and objectives, and ensuring your IT infrastructure is not just cost-effective and compliant, but also agile and future-ready.</p>
<p><strong>Still struggling to build the most suitable cloud strategy for your organisation? Download our white paper and get started on the right path.</strong></p>
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Cloud Repatriation: Why Businesses Are Returning to On-Premises Systems

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