Cloud repatriation and optimizing cloud costs – Why a hybrid model makes sense.

Despite the recent hype around cloud repatriation and companies moving back to private data centers, the reality is that cloud is here to stay and still growing fast. What the recent interest in cloud repatriation does show is that companies are starting to figure out that not all data should be in the cloud, and optimizing cloud costs requires a carefully planned strategy that involves both public and private clouds.  

 Let’s explore why companies are moving some workloads back to their private data centers, the pros and cons of repatriation, and how to best approach cloud repatriation. 

Increasing cloud costs is the main reason for cloud repatriation 

While there are many reasons for cloud repatriation, in a recent Dell survey of 96% of respondents (out of 136 decision makers) cited cost efficiency as the main driver in choosing to repatriate at least some of their data from the cloud. With public cloud costs in 2023 poised to increase by almost 33% in Europe and 20% in the US there doesn’t seem to be any relief in sight. 

So, why is public cloud so expensive? 

Public cloud isn’t necessarily more expensive than on-prem, especially early in a company’s cloud journey. It can provide immediate infrastructure and a lower barrier to entry. However, as a company grows and as the infrastructure becomes more complex, certain inefficiencies can get out of control very quickly.  

• Unaccounted for cloud spend – As a company’s cloud infrastructure grows, they often end up with numerous different clouds, run by numerous dev teams, each with their own preferred tools/applications to help them automate and manage their data, processes, and applications. With so many clouds, teams, and tools, it becomes extremely complex and time-consuming to track all cloud spend, and proper cost allocation/optimization can become almost impossible when done manually. Furthermore, the cost of having teams of experts managing and rationalizing all the cloud costs and activities becomes untenable. 
• Opaque, complex, and unpredictable billing – Public cloud billing is famously complex. To optimize costs, companies have to consider how much data is stored, the number of resources used, the number of operations taken, and how often it is accessed. There’s also no standardization across different providers, making it difficult to shop around for optimal pricing. For a medium-sized enterprise, a single public cloud bill can sometimes be 50 pages long. Multiply that by the number of different public clouds that are utilized and it’s no wonder why companies are overspending on cloud. 
• Lack of planning – Migrating to the cloud as fast as possible (aka lift and shift) without proper planning or modifications to make the best use of cloud optimization tools leads to cloud costs that are needlessly inflated. Instead of a simple migration, it’s often more cost-efficient to keep the resource in the private cloud.  
• Native Tools – Native tools are especially useful at the early stages of the cloud journey. But when cloud initiatives begin to scale, and you move to more than one cloud provider, the management tools offered are not enough.  In this case, business owners may start considering repatriating some of their applications back to on-prem to reduce the costs of resources needed to manage multi-cloud deployments. 

Challenges of repatriation 

Repatriation does come with its own share of challenges that companies will have to address: 

• Cloud lock-in – Once you’ve properly configured your processes and applications to work within a specific cloud and its native tools, it can be a daunting process to reconfigure that in a different cloud, private or public. Not to mention the expertise that your dev team has built up utilizing said cloud that will have to be relearned on another platform.  
• Lack of a user interface – Public clouds have user interfaces that consumers of IT can use to order and manage their resources. Data centers, on the other hand, often lack a simple interface or self-service capabilities, and if you need a VM, network, or storage from your company’s data center you’ll have to enter a ticket with your IT team and wait for them to manually build it out. 

The right way to approach repatriation 

Companies obviously aren’t moving everything from their public cloud providers to a rack-mounted server in their basement. Public cloud offers amazing benefits and for most companies, public cloud will remain a powerful tool that should be balanced with a private cloud infrastructure depending on the company’s needs.  

Managing numerous public clouds on top of a private data center, however, can be a daunting process, especially as a company scales. From keeping track of resource usage, to all the tools and expertise necessary to keep all the instances and VMs running can be a challenge for IT teams of any size. 

For approaching a complex multi-cloud and hybrid-cloud environment, a Cloud Management Platform that sits above all cloud resources and acts as a “manager of managers” should be considered. A good tool should help you with: 

• Optimizing public cloud costs – Ensure that you get the visibility, actionable insights, and cost optimization features (setting quotas on users and groups, threshold-based approvals, enforcing power schedules on resources, etc.) across all your clouds. This can sometimes be a first step in reducing the need for a time-consuming repatriation effort or at least help you evaluate where the most potential savings are.  
• Ease of migration – A good tool can help you easily migrate your resources across different public clouds or to a private cloud while easily optimizing for where its deployed, ideally in an automated process. As public cloud costs fluctuate, easily migrating between resources will be key in avoiding cloud lock-in and optimizing for unpredictable cloud costs. 
• A single place to manage both private and public clouds with self-service – A single place for consumers of IT resources to see, order, and manage their resources both for public and private clouds is crucial in ensuring a successful repatriation effort. Allowing consumers to get what they need when they want it without a long, drawn-out process with the IT team will ensure that consumers don’t lose the functionality they expect from public clouds.  

Ready to see how you can optimize your cloud costs? Book your demo and see how CloudBolt can help you gain complete cloud control in 30 days or less.