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The Return to On-Premises Data Centres: Navigating the Shift from Public Cloud Services

The Return to On-Premises Data Centres: Navigating the Shift from Public Cloud Services


11th April, 2024


Jonn-Paul Lambie

In recent years, a significant trend has emerged in the digital infrastructure landscape. Organisations worldwide are re-evaluating their reliance on public cloud offerings, with many opting to migrate back to on-premises data centres. This move is influenced by a multitude of factors, including cost considerations, the need for greater control over data, and the complexities of digital transformation. Particularly notable is the scenario where organisations initially transitioned to the public cloud under pressing circumstances, such as the expiration of a data centre contract, leading to a hasty "lift and shift" approach without the subsequent, and crucial, phase of transformation.

The Rush to the Cloud: A Retrospective

The initial migration to public cloud services was often driven by the allure of scalability, flexibility, and the promise of reduced operational costs. For many, the urgency to vacate existing contracts and data centre premises led to a direct lift and shift of existing digital assets to the cloud. This approach, however, bypassed the strategic phase of transformation that is necessary to fully leverage the benefits of cloud computing. Instead of re-architecting applications and infrastructure to be cloud-native, organisations found themselves running their existing legacy systems in a new environment, without reaping the cost efficiencies and performance improvements they anticipated.

The Reality of Public Cloud Costs

One of the most compelling reasons for the pivot back to on-premises solutions is the financial impact of public cloud services, especially under a strictly Infrastructure-as-a-Service (IaaS) model. Initially, the pay-as-you-go pricing model of public cloud services is attractive, offering what appears to be a cost-effective solution for organisations looking to scale their operations. However, as data volumes grow and new services are added, the costs can quickly escalate. This is particularly true for organisations that did not undergo transformation to optimise their applications for cloud environments. The lack of transformation means that applications may not be as efficient as possible, leading to higher consumption of resources and, consequently, higher costs.

The Control and Compliance Factor

Beyond the cost implications, the move back to on-premises data centres is also motivated by organisations' desire for greater control over their IT environments and data. Data sovereignty and compliance with regulatory requirements are easier to manage within the confines of a private data centre. In sectors where data privacy is paramount, such as healthcare and finance, the ability to physically control the storage and processing of data offers a level of assurance that is challenging to achieve with public cloud providers.

The Challenges of Integration and Performance

The initial migration to public clouds, if done hastily, can lead to long-term challenges in application performance and integration. Applications that were not designed for the cloud can suffer from latency issues, reduced performance, and increased complexity in integration with other cloud-native services. The effort and cost required to retrofit these applications for optimal cloud performance can be prohibitive, prompting organisations to reconsider the viability of maintaining them in a public cloud environment.

Looking Forward: A Balanced Approach

The shift back to on-premises data centres does not signify a rejection of cloud computing but rather a recalibration of how organisations approach their digital infrastructure. The experiences of the past few years have underscored the importance of a balanced, hybrid approach that leverages the best of both worlds. By maintaining critical data and applications on-premises and utilising public cloud services for scalable, flexible workloads, organisations can achieve a more cost-effective, secure, and performance-optimised IT environment.

In conclusion, the journey from on-premises to public cloud and back again has been a learning curve for many organisations. It highlights the need for thoughtful consideration of the unique requirements of each business, the importance of planning and transformation in cloud migration, and the evolving landscape of digital infrastructure. As we move forward, the focus will likely shift towards finding the right mix of on-premises, private cloud, and public cloud solutions to meet the dynamic needs of businesses in an increasingly digital world.