Many cloud transitions are falling back down to earth, according to a recent survey commissioned by cloud computing firm Citrix.
Citrix commissioned a poll of 350 business and IT leaders in the US, and found 94% had moved some of their workloads back from the cloud to on-premises facilities. The top reasons for such “cloud repatriations,” according to respondents, include unexpected security issues (41%), high project expectations (29%), and failure to meet or set expectations (23%).
Calvin Hsu, VP of product management at Citrix, told IT Brew the results likely reflect expiration of pandemic-era cloud contracts. With 70% of respondents expressing optimism about future cloud projects, Hsu said executives aren’t backing away from the cloud, but are reconsidering which workloads would be better handled locally.
“Now we’re hitting that point where people are looking at their renewal bills and their go-forward strategy after making some of the commitments that they [made] during the pandemic,” Hsu said.
Forecasting cloud expenditures is a perennial problem for enterprises, in part because cloud services tend to convey usage data in ways that are optimized for technical users rather than finance departments, IT Brew previously reported. According to Hsu, some firms may have found unpredictable, complicated, or sensitive workloads are more cost-effective to run on-prem.
Decisions about where to locate hardware, he said, can also be influenced by factors like how much physical space is available to house equipment, or in highly regulated industries, security and compliance risks.
Hsu said the convenience of on-demand infrastructure translates to premium prices for customers.
“That is definitely worth something, but every customer is going to have a different line where that’s drawn,” Hsu said.
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Cloud services are usually priced for their utility in building and rapidly scaling new technologies, Hsu said, so they can be a sub-optimal choice for day-to-day workloads with more consistent requirements. For example, a 2023 survey by software-as-a-service firm Vertice found finance executives often express concern that they lack visibility into how much cloud projects cost and why.
Nearly two-thirds (65%) of respondents to the Citrix survey said their cloud workloads were financially predictable, though 29% reported unanticipated expenses going to the cloud.
The decision to go back on-prem isn’t necessarily a reflection of dissatisfaction with a cloud provider, Hsu said, but rather an issue of workloads not being static. For example, a rapidly expanding company may see cloud as an attractive option to handle a surge in users. But it also might shift workload back to more predictable on-prem computing down the road, when the larger number of users has become business as usual.
“The duration of how long these things run, how long a burst scenario needs to last, is very critical” in determining whether a project is better suited for cloud or on-prem, Hsu added. “I think people are starting to look at the lifecycle of a workload.”
“Leave yourself some flexibility,” Hsu advised. “Don’t cut yourself off from one path or the other, and look for solutions that enable hybrid or enable multicloud and enable you to retain some of that control and flexibility over that time. Because you’re going to learn a lot.”