Executive Viewpoint 2019 Prediction: Cloudian – Enterprises See Beyond Public Cloud

In an IDC survey of enterprise IT managers, 80 percent reported repatriating workloads from public cloud environments over the prior year. On average, those respondents expect to move 50 percent of their public cloud applications to hosted private cloud or on-prem locations over the next two years.

This does not mean customers will consume 50 percent less public cloud. In fact, public cloud use will continue to grow. However, enterprises are finding good reasons to adopt or increase their use of a hybrid cloud model, which includes returning certain workloads to on-prem or private cloud environments.

The public cloud can be ideal for customer-facing services where many users need to connect from various locations using different levels of connectivity. It’s also a good fit for testing, development, CRM and other short-term workloads, as well as disaster recovery. Benefits of public cloud usage include on-demand resource scalability, pay-as-you-go cost efficiency and flexibility, and freedom from not having to buy, install, operate or maintain one’s own infrastructure.

Given these understood benefits of using public cloud services, why are enterprises repatriating workloads from public cloud environments?

The IDC survey identified security, performance, and cost as the top three concerns of IT managers. Depending on the use case, each of these may or may not be an issue. Look at cost, for example. With some cloud platforms, enterprises have found a lack of visibility into how much it costs to retrieve data when needed. Many clouds rely on a tiered pricing strategy, and costs rise suddenly once usage hits a certain threshold. Moreover, public cloud providers charge fees to move data out of their cloud, which can quickly add up. Many IT managers have been unpleasantly surprised when they received their bill for cloud services and discovered that expenses were much higher than they had expected, with even data perceived as “cold” being frequently accessed.

In some use cases, the cost variability may not be a concern. For a SaaS provider, for example, income may be directly tied to application usage, in which case variable cloud costs are fine. However, for an enterprise application, the IT manager might have a fixed budget and a variable cloud cost could be a problem.

Security risks in the cloud are largely a question of control. If multiple people are configuring cloud storage that contains sensitive information, the risk climbs with each new bucket configured.  In this case, the storage environment may be better located on prem, behind a consistently managed firewall.

Speaking of security, there’s a related consideration that IT managers in Europe must take into account when it comes to public cloud services. Under the U.S. CLOUD Act, American cloud service providers, when ordered, must provide data stored on their servers to U.S. government authorities, even if it’s stored overseas. This contravenes GDPR, the European Union’s law governing data protection/privacy, thereby creating legal risks for companies using U.S. cloud providers.

In contrast to public cloud services, on-prem private cloud environments offer enterprises the ability to manage and access massive files while remaining within a predictable budget. By using on-prem data centers, enterprises can also maintain consistent control of their data, lessening security risks and avoiding the CLOUD Act-GDPR conflict. In addition, on-prem solutions ensure users always know where their data is located, allowing them to meet compliance regulations. On-prem solutions are ideal for workloads with sensitive information, such as government, student, financial or health records, which require a high level of security and compliance.

As enterprises gain a better understanding of where public cloud services do and do not make sense compared to on-prem private clouds, they increasingly see the value in implementing hybrid cloud solutions. Providing the benefits of both, hybrid cloud solutions allow enterprises to move data across the two environments as needed, taking advantage of the respective benefits of each.


Neil Stobart
Vice President of Global Sales Engineering, Cloudian

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