April 25, 2022 · 2 min read
In 2014, The Guardian wrote a starry-eyed piece on the "endless possibilities of cloud computing" for everyone. More recently, however, there's been a mass exodus from the cloud, with enterprises large and small alike ditching their cloud providers in favor of on-premises deployments.
There are many reasons for this shift, but chief among them is cost. Sky-high fees have made the cloud an increasingly unattractive option for many organizations.
In order to reduce the ongoing operational costs of maintaining a cloud deployment, some organizations have taken to simply shutting down their cloud infrastructure and moving all their data and applications back on-premises.
Ironically, leaving the cloud can be an expensive proposition as well. Beyond the egress fees, there are hidden costs associated with migrating off of a cloud platform. These costs can include a loss of operational efficiency, customer satisfaction, time to market, innovation, market share, testing out technology, and logic and analytical capabilities.
One of the biggest challenges with leaving the cloud is the loss of operational efficiencies that have been gained by leveraging the cloud platform. In many cases, enterprises have built their entire infrastructure and operations around the cloud platform, and moving back on-premises can be a major undertaking.
In addition, it can be difficult to replicate the same level of operational efficiencies on-premises that were achieved in the cloud. For example, many organizations leverage the auto scaling capabilities of the cloud to dynamically scale their infrastructure up or down based on demand. This can be a challenge to replicate on-premises, as it requires a significant investment in hardware and other infrastructure.
For instance, Google claims that shifting to GCP enables businesses to lower TCO by 26% to 34% with BigQuery, and cut analyst workloads by 70% using a centralized data model with Looker.
Among their case studies are Metro, who cut infrastructure costs by over 30%; Auto Trader, who improved resource utilization by 75%; and Routard, who reduced infrastructure costs by 60%.
Leaving the cloud can also have a negative impact on customer satisfaction. In many cases, customers have become accustomed to the speed and reliability of cloud-based applications and may not be willing to tolerate the slower performance and potential downtime of on-premises applications.
In addition, migrating off of a cloud platform can be disruptive to customers and may result in lost business. For example, if an organization is using a cloud-based CRM system and decides to migrate to an on-premises deployment, they may lose historical data and customer records. This can be extremely disruptive to the business and may cause customers to take their business elsewhere.
In an Accenture survey, 45% of respondents who moved to the public cloud saw benefits in customer satisfaction. Many of these benefits come down to speed. As the New York Times reported, even a blink of an eye can have an outsized impact on customer satisfaction. In one study, a 250-millisecond delay in response times resulted in a loss in conversions.
Chief among them is that the cloud provides resources when you need them, which can be critical when launching a new product or service. In addition, the cloud makes it easy to test and deploy new features and functionality without the need to provision and configure new hardware.
Further, by offloading routine infrastructure management tasks to the cloud provider, organizations can free up their own resources to focus on developing new products and features.
More broadly speaking, this improves employee mobility and helps to attract and retain top talent. For example, a recent study by PwC found that three-quarters of respondents said that access to technology makes them more effective at work.
Leaving the cloud means giving up all of these advantages and can significantly delay time to market for new products and features.
Leaving the cloud can also stifle innovation. The cloud provides organizations with the ability to experiment and try new things without the need for a large upfront investment. This has led to a proliferation of new cloud-native applications and services that would not have been possible without the cloud.
In fact, over a third of Accenture’s survey respondents report that moving to the cloud enables them to develop new and innovative products and services.
By moving back on-premises, organizations are giving up this ability to experiment and innovate. This can have a long-term impact on the organization, as it may be difficult to catch up to rivals who are able to take advantage of the latest cloud-based technologies.
The cloud provides organizations with the ability to quickly test out new technology without the need for a long and expensive proof of concept process. However, when leaving the cloud, organizations may find themselves locked into using outdated technology.
This can have a significant impact on the organization, as it may be difficult to keep up with the pace of innovation if they are unable to quickly test out new technology.
For instance, machine learning is quickly becoming a must-have tool for organizations across all industries. However, machine learning models can take a significant amount of computing power, on-top of high storage requirements. If an organization wants to keep up with the competition, they need to be able to quickly test out different machine learning models to see which one works best for their data.
However, if an organization leaves the cloud, they may find themselves unable to train and test machine learning models quickly and efficiently. This could put them at a significant disadvantage compared to their competitors.
One of the hidden costs of leaving the cloud is the loss of logic and analytical capabilities that have been gained by leveraging the cloud platform. In many cases, organizations have built their entire infrastructure and operations around the cloud platform, and moving back on-premises can be a major undertaking.
In addition, it can be difficult to replicate the same level of logic and analytical capabilities on-premises that were achieved in the cloud. For example, many organizations leverage the autoscaling capabilities of the cloud to dynamically scale their infrastructure up or down based on demand. This can be a challenge to replicate on-premises, as it requires a significant investment in hardware and other infrastructure.
The Bottom Line
The hidden costs of leaving the cloud can be significant and can have a negative impact on operational efficiency, customer satisfaction, time to market, innovation, market share, testing out technology, and logic and analytical capabilities. As a result, organizations should carefully consider the pros and cons of migrating off of a cloud platform before making a decision.
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