Last year brought attention to cloud departures and the trend looks for be ongoing this year. Basecamp CTO David Heinemeier Hansson gave a detailed interview on why he left the cloud. Lower hardware costs deliver a better return after migrating to on-premise rather than continuing to pay the same or more for comparable cloud services. When cloud services were launched by Amazon, Microsoft and Google in the early 2000's the average cost of storage was $2590/TB. Fast forward to today and that average cost has dropped to $14.30/TB. However, cloud services have not reduced prices since their launch over 20 years ago. Why is this? Rolled up into each TB of cloud storage is the overhead of multitudes of cloud application layers and skills needed to allocate physical resources to many customers. A pinch of record profits for cloud providers is holding prices on an upward trend. However, cloud customers are running the numbers and the numbers show significant savings in returning to on-prem, colo/data center models. What about all the managed services offered in the cloud? Many companies are realizing they have skill sets that overlap cloud and on premise deployments. Moving from the cloud to physical hardware is on the horizon for many organizations because the savings opportunity is hard to ignore.
Can cloud customers get better value from their current services? No doubt cloud offers a lot of benefits natively. However, some investment is required. Applications in particular can benefit from cloud native modernization. Application modernization is a common argument to justify the cost of cloud services. On a dollar level cloud native security, data governance and other capabilities may justify investment into application modernization, but that investment would come in the form of increased staffing and training and more importantly an even longer term commitment to cloud contracts. As a result, a Cloud Native approach can be challenging to get into a budget and requires more commitment to even longer term high cloud costs.
What is the general trend? Organizations that need Enterprise solutions with many different ecosystems will continued to see benefit from cloud services. Organizations that have mature products and consistent deployment patterns may see great value in leaving the cloud. My prediction is that as the economy struggles companies will focus more on revenue and less on ecosystems and we will see more cloud departures.
All I am saying is that my AWS bill has gone up 20% since last year. If the cloud providers are thinking about finding lost revenue in the pockets of small operators then back to colo I shall go. I do miss the days of the eye scanners. Kinda makes you feel important.
