Going backwards; the cost of Cloud is driving record repatriation

The biggest worry keeping cloud leaders up at night is cost. The cost of migrating their systems to the cloud can often outstrip expectations, and available budget. In recent months, I’ve seen a lot of businesses forced to backtrack on their cloud migration plans and ship everything back to data centers again, when the financial burden proved unsustainable.

This is what we call ‘cloud repatriation’. It’s been on the rise for a while. But recent research found that in 2024 a staggering 83% of CIOs plan to repatriate ‘at least some workloads’.

But how did we get here? I think there are at least three common problems that can lead to cloud migration running into trouble:

1. Failures to implement effective cost-saving exercises.
2. Lack of knowledge.
3. Disconnect between finance and procurement.

Cloud cost saving is better understood now

For those who don’t know, cloud migration is the process of moving a company’s systems and servers to third party cloud computing, such as Microsoft Azure, Amazon Web Services, or Google Cloud. Those systems would typically include applications, data, infrastructure, and cyber security software.

Moving over does take some work. Cloud vendors are typically open about the cost of cloud migration and management, and how to optimize it, but that still requires resource and understanding within your teams.

Cost management, however, was late to the market. By this I mean that expectations around cost were unrealistic, awareness was insufficient, and cost management considerations were not embedded into practices and roles in the same way as security, which was highly emphasized from the off. 

Many businesses at the outset of the cloud migration wave were not equipped to ensure cost efficiency, in large part because of siloed knowledge and working. ‘Cost people’, i.e. finance department or budget holders, need to understand where the financial burden is coming from, and whether it’s justified. They can’t do so without communicating with technical teams, to grasp the end result of the cloud migration and its ROI.

In turn, ‘cloud people’ can find efficiencies to reduce cost, such as right sizing, tagging, and effective reporting. But they can’t – or simply won’t – unless concerns over the existing costs of the cloud are communicated to them.

I’ve seen it so often – it’s often a communication problem. The people in charge of costs don’t always see or understand the benefits. The people running the programs don’t always see all the costs. And they don’t talk to each other.

Cloud remigration and ending the boomerang cycle

Cloud is changing pretty quickly. In the last 18 months, FinOps within cloud has become more prominent. There are more learnings, best practices, and frameworks to take advantage of. So, if you’re embarking on cloud migration in 2025, you’re well-positioned to get it right the first time.

But what if you’re one of the affected, who have been forced out of the cloud, or you’re facing that decision? If you’re in that 83% figure? I’d suggest giving your teams a chance to ‘save their cloud’ by making it run cheaper before axing it altogether.

First of all, you’re not alone. Enough companies have been caught in this same cycle that it has a name – the boomerang effect. (Or if you prefer, Cloud Oscillation).

Secondly – and I probably don’t have to tell you this – the cloud is a better place to be. If you’re already on cloud and thinking of repatriating to your own data center, it’s worth being aware of the costs. They include:

• Upfront costs – re-establishing on-premises infrastructure incurs high hardware, software and facilities costs.
• Operational complexity – which may otherwise be handled by a cloud provider.
• Inability to scale, or flex with fluctuation – on-premise facilities are not as ‘elastic’ as the cloud. It’s much harder to quickly scale or reduce compute power or storage as the need arises.
• Security and compliance demands – the responsibility for your cyber security now lies solely within the organization. And there are growing regulations to follow.

Every time you move to the Cloud and back again… and back again, it costs money.

So how can you end the cycle and make the cloud work for your business, for good? I’ve found that it’s about mapping your journey thoroughly from the start, so you don’t get lost. There are three things I recommend:

• Only migrate what you need to migrate to the cloud.
• Understand the likely costs and architect effectively for them.
• Ensure that awareness of cost and cost management is baked into everyone’s roles.

To get your next – and hopefully, final – cloud migration right, be aware of cost planning beforehand. Assess as a business, or engage a consultant to identify which workloads are suited to the cloud. Optimize for efficiency, and consider a hybrid or multi-cloud approach, which can be more flexible. Training and governance should also be priorities and not afterthoughts, helping you avoid getting hit with the boomerang… again.

Find out how to upskill your teams in effective cloud migration with our cloud training solutions.