From Cloud-First to Cloud-Smart to Repatriation
VMware Explore 2024 happened this week in Las Vegas. I think many people were curious about what Hock Tan, CEO of Broadcom, had to say during the general session. He delivered interesting statements and let everyone in the audience know that “the future of enterprise is private – private cloud, private AI, fueled by your own private data“. On social media, the following slide about “repatriation” made quite some noise:
The information on this slide came from Barcley’s CIO Survey in April 2024 and it says that 8 out of 10 CIOs today are planning to move workloads from the public cloud back to their on-premises data centers. It is interesting, and in some cases even funny, that other vendors in the hardware and virtualization business are chasing this ambulance now. Cloud migrations are dead, let us do reverse cloud migrations now. Hybrid cloud is dead, let us do hybrid multi-clouds now and provide workload mobility. My social media walls are full of such postings now. It seems Hock Tan presented the Holy Grail to the world.
Where is this change of mind from? Why did only 43% during COVID-19 plan a reverse cloud migration and now “suddenly” more than 80%?
I could tell you the story now about cloud-first not being cool anymore, that organizations started to follow a smarter cloud approach, and then concluded that cloud migrations are still not happening based on their expectations (e.g., costs and complexity). And that it is time now to bring workloads back on-premises. It is not that simple.
I looked at Barclay’s CIO survey and the chart (figure 20 in the survey) that served as a source for Hock Tan’s slide:
We must be very careful with our interpretation of the results. Just because someone is “planning” a reverse cloud migration, does it mean they are executing? And if they execute such an exercise, is this going to be correctly reflected in a future survey?
And which are the workloads and services that are brought back to an enterprise’s data center? Are we talking about complete applications? Or is it more about load balancers, security appliances, databases and storage, and specific virtual machines? And if we understand the workloads, what are the real reasons to bring them back? Figure 22 of the survey shows “Workloads that Respondents Intend to Move Back to Private Cloud / On-Premise from Public Cloud”:
Okay, we have a little bit more context now. Just because some workloads are potentially migrated back to private clouds, what does it mean for public cloud vs. private cloud spend? Question #11 of the survey “What percentage of your workloads and what percentage of your total IT spend are going towards the public cloud, and how have those evolved over time?” focuses on this matter.
My interpretation? Just because one slide or illustration talks about repatriation does not mean, that the entire world is just doing reverse migrations now. Cloud migrations and reverse cloud migrations can happen at the same time. You could bring one application or some databases back on-premises but decide to move all your virtual desktops to the public cloud in parallel. We could still bring workloads back to our data center and increase public cloud spend.
Sounds like cloud-smart again, doesn’t it? Maybe I am an organization that realized that the applications A, B, C, and D shouldn’t run in Azure, AWS, Google, and Oracle anymore, but the applications W, X, Y, and Z are better suited for these hyperscalers.
What else?
I am writing about my views and my opinions here. There is more to share. During the pandemic, everything had to happen very quickly, and everyone suddenly had money to speed up migrations and application modernization projects. After that, I think it is a natural thing that everything was slowing down a bit after this difficult and exhausting phase.
Some of the IT teams are probably still documenting all their changes and new deployments on an internal wiki, and their bosses started to hire FinOps specialists to analyze their cloud spend. It is no shocking surprise to me that some of the financial goals haven’t been met and result in a reverse cloud migration a few years later.
But that is not all. Try to think about the past years. What else happened?
Yes, we almost forgot about Artificial Intelligence (AI) and Sovereign Clouds.
Before 2020, not many of us were thinking about sovereign clouds, data privacy, and AI.
Most enterprises are still hosting their data on-premises behind their own firewall. And some of this data is used to train or finetune models. We see (internal) chatbots popping up using Retrieval Augmented Generation (RAG), which delivers answers based on actual data and proprietary information.
Okay. What else?
Yep, there is more. There are new technologies and offerings available that were not here before. We just covered AI and ML (machine learning) workloads that became a potential cost or compliance concern.
The concept of sovereign clouds has gained traction due to increasing concerns about data sovereignty and compliance with local regulations.
The adoption of hybrid and hybrid multi-cloud strategies has been a significant trend from 2020 to 2024. Think about VMware’s Cloud Foundation approach with Azure, Google, Oracle etc., AWS Outposts, Azure Stack, Oracle’s DRCC, or Nutanix’s.
Enterprises started to upskill and train their people to deliver their own Kubernetes platforms.
Edge computing has emerged as a crucial technology, particularly for industries like manufacturing, telecommunications, and healthcare, where real-time data processing is critical.
Conclusion
Reverse cloud migrations are happening for many different reasons like cost management, performance optimization, data security and compliance, automation and operations, or because of lock-in concerns.
Yes, (cloud) repatriation became prominent, but I think this is just a reflection of the maturing cloud market – and not an ambulance.
And no, it is not a better moment to position your hybrid multi-cloud solutions, unless you understand the services and workloads that need to be migrated from one cloud to another. Just because some CIOs plan to bring back some workloads on-premises, does it mean/imply that they will do it? What about the sunk cost fallacy?
Perhaps IT leaders are going to be more careful in the future and are trying to find other ways for potential cost savings and strategic benefits to achieve their business outcomes – and keep their workloads in the cloud versus repatriating them.
Businesses are adopting a more nuanced workload-centric strategy.
What’s your opinion?
