Here, There, Somewhere in Between, or Back and Forth? Public, Private, Hybrid Cloud, or Repatriation

Today, the cloud is the go-to platform for hosting digital and traditional workloads for enterprises in every industry. According to a leading analyst firm, global spending on public cloud services will go from US$ 396 billion in 2021 to US$ 482 billion in 2022 and account for 45 percent of total enterprise IT spending by 2026. At the same time, there is increasing talk of organizations moving workloads beyond a certain scale back to a private cloud or on-premise environments, because the cost of public cloud had become untenable.

A reality check, however, shows that the number of companies doing this is tiny – only 4 percent, as per the aforementioned analyst. This is totally understandable since the public cloud is what makes digital transformation possible and is the only viable way for enterprises to scale quickly.

So why are some enterprises looking to leave?

Often, the problem is not the public cloud itself, but unrealistic expectations of savings from cloud migration. Enterprises fail to realize, or are unaware, that the gains from affordable compute and storage tail off at a point, beyond which growth slows down and unit costs rise, diminishing near-term efficiency. Choosing the wrong workloads to migrate, and poor planning – for instance, hoping to simply “lift and shift” from on-premise to public cloud – are also causes of disappointment.

The most suitable approach is to use a hybrid of public and private cloud, timed just right, considering factors such as cloud maturity, scale, and stage in the business lifecycle. From there, the organization can lean more towards the public or private cloud, based on its context. For example, if the organization is already cloud-mature, it may consider taking some workloads from public to private cloud, for the following reasons:

Cost reduction: True cloud efficiency lies in full automation of operations over the above the compute and storage advantages it promises. But most businesses don’t go that far, contenting themselves with cloud’s minimal CAPEX and pay-per-use style OPEX; they are in for a rude shock once they reach a size where the cloud costs start to mount. But what choice do they have when a public cloud is the only way they can scale?

None really. However, once they’re past ‘critical scale’, these enterprises can look at repatriating some workloads to the private cloud to bring down their costs. One company that has done this is Dropbox, which, after growing to 500 petabytes on public cloud, took its data back to three owned data centers in 2016. In the first year itself, the company saved almost USD 75 million. Seagate, while choosing to run business apps on AWS, also repatriated a big data ecosystem to the private cloud to earn savings of nearly 25 percent. The public cloud also brings with it the opportunity to harness a wealth of data beyond one’s enterprise data. Explorations to bring the best of public cloud services to the private cloud are now ongoing at scale. This will enable businesses to gain the cloud experience and value benefits while retaining control of their data to meet data governance and residency regulations.

Latency minimization: Hyperscalers, AWS, Google Cloud, MS Azure, and IBM Cloud, all promise uptimes between 99.50 and 99.99 percent. A few minutes of downtime per month may be acceptable as long as things are normal. But in a crisis, they can wreak havoc – imagine emergency support services going down for mining staff on the job in the mines. Unfortunately, enterprises relying solely on the public cloud can do nothing during an outage; this is where a private cloud option becomes a critical advantage since it offers some degree of control. Another problem that public clouds – with their massive geographic and user footprint – pose is latency, which can be a deal-breaker for businesses, such as OTT media service providers.

Security considerations: Public cloud security is highly automated and very solid. It gives many enterprises a level of protection they could never afford to create on their own. The downside is that public cloud security is pre-configured, which may not work for companies requiring an alternative security setup. This, and other constraints – typically regulatory requirements – may drive enterprises towards the private cloud.

Public or private, that is not the question

That being said, public cloud is still the pre-eminent infrastructure solution for organizations across the board, the majority of whom may never need to look elsewhere. Rather than getting into the public versus private debate, enterprises should ensure that they have the right workload on the right cloud at any given time, which often means going down the hybrid cloud route. However, if at some stage of scale or cloud maturity, a private cloud makes more sense for a workload housed on public cloud, then repatriation can be an option.