Over the last few years, we’ve seen a steady increase in public cloud adoption in the enterprise. In 2016, 17 percent of enterprises had over 1,000 VMs in the public cloud. That number is up from 13 percent the year before. To many, the idea of public cloud was an attractive way to build out their existing business models and experiment with new ones, and this worked well for a while, but was eventually oversold and often under performed. In 2018, I predict we’ll see a retreat away from the public cloud, especially for the storage of highly critical applications, and a return to on-site solutions for various reasons.
First, public cloud still requires an army of people to manage it. While many public cloud companies provide the cloud platform, they don’t provide the people or resources to manage the software running on that platform. This means the company utilizing the platform has to provide the manpower and time required to maintain it, both of which cost money. For anything other than short-term requirements, these costs eventually add up and actually make public cloud more expensive than traditional on-premises solutions. The problem is particularly acute with data storage, where the payback for on-premises versus public cloud can be as little as a few months.
Additionally, in 2017 the durability and availability of the public cloud was touted, but alas the reality was somewhat different. In February, Amazon’s S3 service experienced an outage after an employee accidentally typed the wrong command in the system. Platforms such as Slack and Quora were down for four hours as a result. Other public cloud giants including IBM and Microsoft Azure experienced significant outages in 2017 as well. All of this called to light the risks associated with companies using public cloud to store critical or sensitive data, and has emphasized the importance of companies keeping greater control over said data. This, in turn, will lead companies to rethink their storage strategies moving forward.
Finally, as alluded to above, many organizations are realizing that – at least when being used for long-term storage – public cloud often ends up being more expensive than on-premises solutions of the same thing. To start, the advertised price of the public cloud often demonstrates the initial cost of use, but as companies are tied into paying recurring monthly fees, and as they gather higher and higher amounts of data and deploy more extensions, that cost continually goes up quarter after quarter. Some public cloud platforms also charge per user, so although public cloud promotes unlimited scalability, this can come with a heavy price tag. As companies are seeing, new technology coming down the pipeline will make it easier to orchestrate servers and VMs, giving on-premises solutions lower cost, and making them as easy to manage and scale as if on a public cloud platform.
In 2018, we’re going to see a palpable retreat from the public cloud, and with this a correlation to the return of on-premises solutions. There will be a major slowing down of the adoption of public cloud as companies realize that it’s not actually cheaper or easier to use in a lot of situations, on top of risking data security The adoption rate of public cloud will slow significantly next year as newer, better on-premises solutions come into play.