Why Businesses Are Exiting the Public Cloud

The Great Cloud Exodus

When I first started hearing about companies that were born in the public cloud and are now leaving, I sensed an era coming to an end, or at least turning a corner. As a trend, public cloud launched many enterprises into the virtual IT realm, quickly and suddenly. Now, I wondered how prevalent this migration back was becoming.

According to an article in Forbes published last year, a study conducted by 451 Research found that 20% of cloud users had moved one or more of their workloads from the public cloud to a private cloud. They even have a name for this migration – cloud repatriation.

The study also found that an additional 10% of public cloud users were planning to do the same thing in the future — move some workloads from public to private cloud. In total, those who were embarking on cloud repatriation planned to do so with 40% of their current public cloud workloads.

Meg Whitman, president and CEO of Hewlett Packard Enterprise, is quoted as saying, “According to IDC, 53% of enterprises have or are considering bringing their workloads back on-premises, and I am willing to bet that percentage is going to increase.”[[1] These stats point to a dramatic shift in thinking from believing that public cloud is the “be all and end all” to “hmmm, maybe we need to slow down and consider developing a hybrid IT strategy, placing applications where they fit best.”

Public to private cloud — what’s behind the move?

What is causing this repatriation or migration from public to private clouds? The Forbes article I mentioned above quotes Andrew Reichman, cloud research director at the 451 Group, as saying, “Although security is one of the main drivers, greater control, cost, availability, and IT centralization are all a part of the repatriation of applications into the private cloud.”

I agree, the public cloud has strengths. Yet, as I’ve shown in previous articles, it is far from perfect for all apps.

Both big and small companies are leaving the public cloud

The biggest name in the cloud repatriation story is Dropbox. Although Dropbox was actually born in the cloud — originally started on AWS — it has since moved more than 600 petabytes of data from Amazon’s cloud to its own data centers. Dropbox says that the move has given them faster performance and lower costs.

Another well-known company that has left the public cloud and now enjoys a hybrid IT approach is TapJoy. Although TapJoy still boasts a large AWS footprint, they seem to have found a better balance of flexibility and control with a hybrid IT environment, placing some workloads in a private cloud and some in a public cloud.

The latest business that is moving out of the public cloud is Facebook’s WhatsApp. According to news reports, Facebook plans to leave IBM’s public cloud to bring their service into their own data center.

What about other companies — public, private, or hybrid IT?

CRN.com documents several sources recounting stories of businesses leaving the public cloud in search of a better, hybrid approach. “We started the company on a public cloud infrastructure, but over time as we grew we needed to move towards a private cloud solution,” said LiquidSky CEO, Ian McLoughlin.

In the same CRN.com article, CB Technologies President Jason Mendenhall said, “These big companies have been in public cloud, they are seeing the challenges and now they are looking at coming back. We’re also seeing lots of opportunities from late adopters who are now thinking they don’t need to go to public cloud. It’s not the end of public cloud. Let’s be very clear about that. It is not an either/or story. It is hybrid.”

In my role as chief technologist for Hewlett Packard Enterprise’s Software-Defined and Cloud Group, I have had the opportunity to speak with many customers about their challenges. At our June HPE Discover 2017 event in Las Vegas, I met with one customer who mentioned that his company had just started to test a public cloud by developing an app there. After only one month, he was shocked to see a bill of several hundred thousand dollars! He commented that for that price, they could have quickly funded an on-premises cloud.

Composable infrastructure leads the way to a hybrid IT environment

Private cloud options are now better than ever due to the introduction of composable infrastructure, which automatically composes resources as needed for any application. Because composable infrastructure gives you the flexibility and economics of the cloud combined with the control and security you get within your own data center, this new technology is quickly becoming the top choice for a hybrid IT environment.

Project New Hybrid IT Stack is a new HPE innovation that is helping customers simplify hybrid IT deployments. The vision of Project New Hybrid IT Stack is to deliver a comprehensive hybrid IT software platform that allows customers to seamlessly compose, operate, and optimize workloads across on-premises, private, hosted, and public clouds.

As businesses evaluate the best IT infrastructure for their workloads, hybrid IT with a mix of public cloud, private cloud and on-premises solutions will become the norm.

[1] IDC (‘Pay-per-Use Models in IaaS Survey,’ July 2016)

About Gary Thome

Gary Thome is the Vice President and Chief Technologist for the Software-Defined and Cloud Group at Hewlett Packard Enterprise. He is responsible for the technical and architectural directions of converged datacenter products and technologies including HPE Synergy. To learn how composable infrastructure can help you achieve a hybrid IT environment in your data center, download the free HPE Synergy for Dummies eBook.

To read more articles from Gary, check out the HPE Converged Data Center Infrastructure blog.