What is cloud repatriation, and is it right for your business?

July 4 2024, by Macquarie Data Centres | Category: Data Centres

The public cloud was once viewed as a heal-all remedy for businesses looking to save cash when storing and managing their data.

The opportunity for scalability without the steep costs of an on-site architecture seemed a perfect fit for a world increasingly inundated with data. Ambitions of ‘cloud native’ and ‘cloud-only’ organisations meant the death of colocation services seemed inevitable. But was this prediction premature?

Recently, we’ve seen several companies moving away from public cloud platforms to bring (at least some of) their data back in-house to on-premises servers, colocation facilities or private cloud environments.

This isn’t a niche concept, either. Just a year ago, the IDC discovered that 70%-80% of respondents expect to, either partially or fully, move their workloads from the public cloud back into a dedicated IT environment.

Many are calling 2024 ‘the year of cloud repatriation.’ But what does this mean? And, as a business leader, is de-clouding the answer?

As experts in all things data, we’ll detail everything you need to know about cloud repatriation. Why is it such a hot topic? Is it right for your organisation? And if so, how can you get started?

We’re dedicated to security and care about data privacy. There’s a reason the Australian Federal Government trusts us. We’ll cover all of that and more, but first, let’s take a deeper look at what cloud repatriation actually means.

What is cloud repatriation?

Broadly, cloud repatriation is the movement away from the cloud back to in-house infrastructure, such as private clouds, colocation data centres and on-premises servers. Depending on who you ask, you might also hear it referred to as reverse cloud migration or de-clouding.

Cloud repatriation is becoming increasingly popular, but this doesn’t necessarily mean organisations are packing their AWS and Azure bags and leaving for good.

While some organisations are de-clouding entirely in favour of colocation facilities, most businesses now look to adopt a private or hybrid cloud approach. The cloud isn’t going anywhere, but businesses view it less as ‘cloud-only’ and more as ‘cloud-plus’.

As per the IDC, 70% to 80% of companies intend to repatriate at least some of their data in the coming year. But why the sudden shift?

Why are companies leaving the cloud?

Why are companies growing disillusioned with the cloud? We might sum it up as expectation versus reality. The promised rewards of migrating to the cloud often mean businesses don’t anticipate the challenges that come with it.

Unforeseen cloud costs, a lack of preparatory training and security mishaps all lead to one thing—disappointment.

Let’s further explore this by breaking it down into four common reasons for repatriating: cost, security, control, and storage.

Cost savings.

Time was when cloud management seemed like the obvious choice for companies trying to control their data cost-effectively.

But nowadays, organisations deal with mountains of data siloed across hundreds of stores. Relying entirely on cloud providers to store large datasets and run everyday applications can result in higher costs than initially expected. Substandard configurations and variable data transfer worsen this problem, leading to unpredictable costs.

Cloud repatriation avoids the unforeseen bill shock of pay-as-you-go pricing, making costs more predictable for organisations.

Security measures.

Misconfigurations, like unrestricted ports and substandard internal policies, make it all too easy for determined cybercriminals to find points of entry.

And find those entry points they will. According to IBM’s Cost of a Data Breach Report, 82% of data breaches in 2023 involved data stored in the cloud infrastructure.

With cloud repatriation, businesses retain control over their data, letting them secure their assets and address security flaws directly.

Control.

Increasingly strict regulations regarding data sovereignty mean businesses must always maintain visibility and control over their sensitive data. This task becomes near-impossible with an ever-growing number of public cloud data stores.

Bringing operations in-house lets businesses maintain visibility over their data and, crucially, know it’s secure, assisting with audit chains and supporting compliance.

Storage needs.

Cloud storage is ideal for mid-sized businesses, but additional subscription fees can get increasingly costly for scaling organisations that need to store an enormous amount of data.

Cloud repatriation makes it easier to scale by eliminating rising subscription-based pricing. This makes it simpler for organisations to establish a long-term plan for growth.

Case studies: Who is doing cloud repatriation?

It’d be an overreach to suggest that all the big companies are de-clouding. However, for some large-scale businesses, moving away from public cloud infrastructures has been a beneficial, even necessary, decision.

Here are two cloud repatriation examples of organisations that have made the leap successfully.

Ahrefs.

Ahrefs is one of the more well-known real-world examples of a company that decided to house its data in a data centre. The company has a rented colocation centre in Singapore with a centralised structure.

With the 850 servers the organisation needs to run, AWS would cost Ahrefs US$14,923,154 per month or US$447,694,623 every 30 months.

In comparison, despite having higher-than-average electricity costs, US$39,519,025 is all it costs for Ahrefs to maintain its Singapore colocation data centre, meaning they save over US$400 million every two and a half years by housing data on-site.

37Signals.

37Signals made waves in 2023 when it announced it was moving its project management platform away from the cloud. The company spent US$3.2 million annually with AWS and Google Cloud.

To rectify this problem, 37Signals spent approximately US$600,000 on servers to migrate most of their data, saving the brand around 60% of its cloud spend. As a result, the business predicts their new on-premises storage will save them US$10 million in five years.

Eight considerations for cloud repatriation.

You now know why companies are leaving the cloud. But is repatriation the right move for you?

Moving from public cloud providers to an on-site, hybrid, or private environment is significant. Before kicking things into gear, you need to have all the groundwork in place.

To help with that, here are eight questions you should be asking.

1. Do I have the infrastructure to facilitate the transition?

Before considering cloud repatriation, you need to know you have the infrastructure to move data in-house.

Do you already have existing infrastructure, or will you need to purchase new hardware to make the switch feasible? Whichever route you choose, you need to have the finances to make repatriation seamless.

2. Have I accounted for scalability?

A major benefit of cloud repatriation is that it avoids the pay-as-you-go cost of cloud scaling. Still, you need to have a plan to ensure you can scale properly when the time comes. Fail to prepare, and you might inhibit your growth.

3. Do I have the in-house expertise to manage the change?

From our experience, one of the main things businesses overlook when bringing data in-house is the need for additional staff to manage it.

Consider whether you need to hire new employees or train existing teams to cope with the demands of maintaining data in-house. Alternatively, you can consider an external team with expertise in in-house data management.

4. Is my in-house security up to standard?

The potential for misconfigurations means public cloud environments have accumulated something of a bad rep for security. However, consider whether your organisation is in a position to deliver something more comprehensive.

Before you make the switch, implement a system of best practices, including authentication policies, data minimisation, encryption, threat detection systems, disaster recovery plans, and access controls — it’ll save you a lot of costly headaches later.

Are my staff trained to handle data securely?

Similarly, your staff needs to understand how to manage data. The number one cause of a data breach is human error. Your team should be trained in best practices and understand how to use and process data effectively.

Have I triple-checked compliance?

Certain industries are susceptible to compliance requirements that explain how businesses can store and use sensitive data. You should understand these legislations and how they apply to you, as they may impact your flexibility in changing your data storage processes.

Have I examined contracts and egress fees?

Don’t get hit by the door on your way out. Your cloud provider may have penalties or data egress fees that they can leverage from you as you exit. Read the small print and understand any required notice periods to ensure you aren’t caught unawares.

Am I prepared for a bit of downtime?

Cloud repatriation is a stage-by-stage migration process. It seldom occurs overnight. Be ready for some downtime, and consider how this will affect your business outcomes before committing to anything. If you decide to go ahead, make sure you let your stakeholders and customers know what to expect from the switch.

Careful planning for reverse migration.

Before you deploy your cloud repatriation strategy, you need to lay the foundation. Here are a few costs to plan for if you want a smooth transition.

Infrastructure costs: How much will this cost if you need to secure new infrastructure? Think about networking equipment, storage devices and, of course, servers.
Operational costs: Once your in-house system is running, you need to maintain it. Consider cooling, electricity, and potential repairs later on.
Security costs: Will you need new employees or training programs to inform existing staff about securing data? Or perhaps you’d benefit from hiring an external team. Either way, plan for the cost of securing your data in-house.
Time cost: Navigating a large-scale cloud repatriation takes time. While the benefits are often worth it, you need to consider potential delays and how to overcome them.

Cloud options after repatriation.

Repatriation doesn’t have to mean cloud-less. While some companies are transitioning entirely to on-premises data centres, this isn’t always an option. Instead, you may prefer to move to a private or hybrid cloud solution.

Private cloud.

With a hosted private cloud environment, you don’t need to share computing resources with other businesses. This usually comes with improved security and better performance monitoring. Plus, it still offers easy scalability.

However, like the public cloud, privately managed clouds can get expensive, so considering your reasons for cloud repatriation when exploring your options is worth considering.

Hybrid cloud.

This option combines on-premises infrastructure with public and private cloud architecture. It’s a solid choice because it allows you to leverage the benefits of each solution, keeping sensitive data and core tasks while using public clouds to access additional computing power when needed.

It’s worth keeping in mind hybrid environments require dedication to data governance. Security and data transfer processes can get messy if you aren’t wholly confident about where every data asset lies.

Introducing Macquarie Data Centres.

The advantages of cloud repatriation are well-documented but remember that migrating isn’t as simple as packing your bags and waving goodbye to AWS. It takes time and requires careful decision-making.

The rushed move to the cloud meant many businesses forgot to take stock of the road ahead. Plan diligently and assess costs to ensure you have a smooth transition.

Macquarie Data Centres has your back if you’d like support with cloud repatriation. We can help you migrate your assets to a high-performing on-site data centre tailored to your unique requirements.

Want to learn more about what we do? Learn more about us. Alternatively, book a tour today at one of our industry-leading data centres.

Summing Up.

Many business leaders see cloud repatriation as an admission of a mistake. An ‘oops, we were wrong, let’s turn back’ moment. But this observes the shift in the wrong way.

We see cloud repatriation less as a step back and more as an evolution with the times. Just as navigating the shift to cloud architecture was a necessary response to compete with the rapid growth of data, cloud repatriation is a response to the evolving need for data visibility and cost-efficiency.

And know that, despite the challenges companies face when managing cloud repatriation, it is still a worthwhile endeavour for most. Take the steps with confidence.

Want to find out more? Contact our expert team today. We’re ready to put your migration plan into action.