It’s Time to Rethink Your All-in Cloud Strategy

About 83 percent of CIOs are planning to move some workloads away from the public cloud this year, but fewer than 10 percent are migrating to a fully on-prem model. At the same time, public cloud spend is expected to grow 21.5 percent this year (Figure 1).

So what's going on?

After the force-feeding of public cloud services in the 2010s, capped off by the pandemic-spurred rush to the cloud in 2020, businesses are recognizing that the public cloud isn’t the right place for all their workloads. As they recalibrate, most are discovering that a hybrid cloud strategy better suits their current needs.

We call this move cloud repatriation.

In other words: businesses are increasingly discovering that a mix of public cloud, on-prem hosting, and private cloud is the most cost effective way to achieve their goals.

In many cases, the biggest immediate driver of cloud repatriation is cost. Maybe you’ve gotten a surprise cloud bill after experimenting with AI or forgetting to de-provision servers you turned on while you were testing a new workload.

But what's great about rethinking your all-in cloud strategy is that it has the potential to do more than save you money.

In this piece, you’ll discover where to start when considering cloud repatriation, how a hybrid-cloud setup can support your growth, and why broaching the topic of cloud repatriation is an essential component of strategic IT leadership in the late 2020s.

But first: what's wrong with the public cloud, anyway?

What's Wrong with the Public Cloud? Nothing! (But it’s Not Right for Every Workload)

It’s worth stating this a few times: there's nothing wrong with the public cloud. Remember: even as CIOs are migrating certain workloads away from the public cloud, overall spend is growing at a healthy rate.

The key is that the public cloud is not a great one-size-fits-all solution. So how did it get so popular in the first place?

If you’ve been doing this work for a while, you’ll remember that, in the 2010s, when public cloud infrastructure first became available, it offered major improvements over much of what was available from on-prem data centers: 

• More features
• More flexibility
• Costs that came from OpEx rather than CapEx
• Lightning-fast scalability
• Low barrier to setup
• … and more.

The cloud democratized IT: suddenly, you didn’t have to have a ton of hardware to spin up an app or even a business. A lot more became possible.

But in the years since, a few things happened to change the game:

1. Software maturity has improved so that it’s now possible to run cloud workloads (like Kubernetes clusters) locally as well as in the cloud, with similar performance.
2. Public cloud users have discovered how easily costs can scale with usage.
3. AI has launched on the scene, and with it the use of GPUs, which are far more expensive than traditional servers. This means it’s easier than ever to drive up huge public cloud bills.

But again: the public cloud is still a great resource for certain use cases. Here’s a breakdown of some common IT functions and where they tend to operate best:

Here’s a helpful analogy: think of the data centers of 20 years ago as akin to houses that people built, maintained, and furnished themselves – out of their hard-earned savings (aka CapEx).

The advent of the public cloud was a bit like having access to luxury, fully furnished apartments, with utilities included. Another benefit was that you could “rent” the public cloud, meaning funds came out of OpEx.

Part of what's driving repatriation now is that those “rents” – aka the cost of running all workloads in the public cloud – are too high. The HOA rules (contracts) are too complex and difficult to manage. And while every feature is state of the art, there aren’t many options to customize.

But we’re not returning to a build-it-all-yourself model. Instead, many of today’s repatriating organizations are finding success with a hybrid model that offers the best of both worlds: more control over which features you use and pay for, with the option to pay someone else to manage the building for you.

So. Where do you start if you’re considering a shift toward hybrid cloud?

Hybrid Cloud: Where to Start

Following the analogy above, if you’ve lived in a managed, fully furnished apartment for years – or if you’ve never owned a home – you likely don’t have the skill set to plan a move elsewhere.

Heck, you probably don’t even have the boxes.

That’s okay. Here’s a quick guide for starting the process of considering hybrid cloud:

1. Define your business goals. Cost savings is likely one of them, but what else do you want to achieve by rethinking your cloud setup? Fewer outages, integrations you want more control over, better data portability, etc.
2. Identify relevant capabilities of on-prem and hybrid cloud solutions. This doesn’t have to be a massive research project. The easiest way to do it is to talk with an experienced provider of these services. Chances are you’ll end up with a managed hybrid solution, so having these conversations will be a natural part of considering partners.
3. Evaluate workloads to determine the best location for each. In past migrations, hosting decisions were often made department by department. Today, it makes more sense to consider things workload by workload.
4. Collaborate on a plan to transfer workloads. In some cases, the full transfer may take years; in others, it may take just a few weeks or months. The timing depends on the specific workloads you’re looking to move and whether you’ll have to refactor them, how much they’re likely to disrupt your business, and so on.
5. Revisit your strategy as your business evolves. The best configuration for your organization today may not be best in a year or five years, so it’s smart to have a plan for reviewing your hybrid cloud setup at regular intervals to assess its fitness.

Remember: you’ll likely keep some workloads in the public cloud (unless you’re part of the eight to nine percent of organizations for whom it makes sense to go fully on prem). And this transition doesn’t mean you have to become a data center manager: thanks to managed service providers, you can still enjoy the more hands-off approach you’ve gotten used to with the public cloud.

This is why we call the hybrid cloud “the best of both worlds.”

How Hybrid Cloud Supports Business Growth

We’ve touched on how a hybrid cloud setup can save your organization money. But that’s not the extent of what it can offer. Getting workloads in the right environment can also deliver improvements in:

• Performance (latency, throughput, etc.)
• Security
• Compliance
• Uptime
• Agility
• Disaster preparedness

Those improvements, in turn, pave the way for businesses to grow. Let’s look at two real-world examples of how embracing hybrid cloud infrastructure empowered businesses to deliver better products and grow their bottom line.

Recruiting company case study: Increased processing power by 50% and reduced spend by 30% via hybrid cloud

A recruiting company found its AWS hosting costs became unsustainable as it matured. While AWS’s scalability had suited their needs in their early stages, they no longer required the full suite of public cloud features they were paying for.

What's more, the company planned to increase reliance on GPUs to fuel AI-powered features. If they stayed in the public cloud, that would drive up costs even further.

The company decided to move from AWS to our Infrastructure as a Service (IaaS) solution. As a result, they enjoyed…

• 30% lower costs compared with their AWS spend.
• 50% more processing power via our IaaS setup, compared with their AWS spend.

Not long after they migrated to a hybrid cloud setup, the company raised hundreds of millions of dollars, thanks in part to the successful platform. Now they’re able to build out the rest of their commercial business.

37Signals case study: $2m / year in cost savings and faster performance

37Signals (maker of project management platform Basecamp and email provider Hey) wanted to move out of the cloud to manage costs while remaining high uptime demands.

Over the course of six months, they moved seven applications from the cloud onto colocated servers across two locations.

When the project completed they saw the following improvements:

• Median query time fell by half.
• Median Basecamp request time fell from 67ms to 19ms.
• Mean request time fell from 138ms to 95ms.
• Costs fell by $2m per year (Figure 2).

These results aren’t outliers, either. Nearly every organization can benefit from considering a hybrid cloud strategy.

Why Hybrid Cloud Should Be a Core IT Strategy Decision Moving Forward

Let’s address a real concern that many IT leaders have around hybrid cloud: will it cost you your job? The short answer: no.

But it’s important to understand why.

First, we recognize that it’s natural to be skeptical of how hybrid cloud will impact your career if you’ve spent most or all of it managing applications in the public cloud. If you’ve never managed a hybrid setup before and you don’t have the skills to do so in house, it can be daunting to take the first steps toward cloud repatriation, even given the potential cost savings.

Or maybe it’s more political: perhaps an influential executive at your organization lobbied hard to move the business to the public cloud. How will they react to a suggestion that you reconsider that setup?

Here’s the reality that can help in either scenario: The situation has changed.

Your business has evolved in the last few years. The capabilities of data centers have evolved. Generative AI has blasted everything out of the water.

Remember: choosing the right platform isn’t just about saving money on cloud bills. It’s about future-proofing your organization by choosing the best technical infrastructure possible.

Whether this is the first time you’ve seriously considered the hybrid cloud or the hundredth, it shouldn’t be the last. Leading the conversation about cloud repatriation internally helps ensure your organization is considering its infrastructure as a dynamic component of the organization that can enable growth and competitiveness.

Even if the exercise of reconsidering your all-in cloud strategy leads you to conclude that your current setup is great, you now have the skills to evaluate your options. You’re better prepared to maintain the right setup as the organization evolves.

Still not sure how to broach the topic internally? Check out the webinar below to get a sense of how our revenue team thinks about cloud repatriation strategy.

Stay or Go, It’s Time to Own Your Cloud Journey

Going all-in on the public cloud made sense for many organizations a decade ago. In the years since, however, a lot has changed. Data centers and private clouds have far more capabilities than they did even five years ago. More businesses are experimenting with AI applications that require massive compute resources. And businesses at all stages have evolved.

The biggest takeaway for IT leaders: if you haven’t yet, now is the time to consider how your hosting infrastructure can best support your long-term goals. Whether the path forward is all-in on the public cloud, fully on prem, or (more likely) a hybrid setup, it’s in the best interest of your organization’s bottom line and your professional future to start the conversation and own the journey today.

Ready to talk about hybrid cloud? Let’s discuss how to build, manage, and optimize hybrid environments tailored to your business needs.

Aaron Biggs

Aaron Biggs is a tenured revenue leader with over 15 years in the trenches of sales, operations, and revenue management. He blends high-level strategy with practical, hands-on expertise, offering a balanced perspective valued by colleagues and clients alike.Aaron has served as Summit's Vice President of Revenue since 2022, where he's responsible for customer acquisition, growth, and solution design. Prior to Summit, Aaron honed his skills at tech powerhouses like Google, Lenovo, and Motorola. He combines thoughtful leadership with a data-driven mindset to maximize revenue growth and customer success in the cloud technology infrastructure space.