Cloud Repatriation: AWS Reports Customers Moving Back On-Premises

A long-standing discussion about whether organizations are pulling computing operations back from the cloud to their own data centers has gained renewed attention. In a recent submission to the UK Competition and Markets Authority's investigation into cloud services, Amazon Web Services (AWS) stated that it faces significant competition from traditional on-premises IT setups. AWS challenged the common assumption that once a customer moves to the cloud, they remain there permanently, providing examples of clients who have indeed migrated workloads back in-house.

AWS explained that customers might opt for repatriation for various reasons, including reallocating internal capital, gaining closer control over their technology access, and increasing ownership of resources, data, and security aspects. Building or maintaining a data center requires substantial investment, and AWS noted that the fact some customers undertake this highlights the flexibility they seek and the perceived benefits, such as physical proximity to assets and enhanced command.

This perspective aligns with observations from other industry sources over the past couple of years. Research has pointed to factors driving this trend, often including cost considerations, particularly for stable and predictable workloads where long-term infrastructure investment can be cheaper than ongoing cloud fees. Other drivers involve meeting data sovereignty regulations, satisfying strict security and compliance mandates, mitigating the 'blast radius' of large-scale cloud outages, optimizing for low latency and high performance needs, and avoiding unexpected or hard-to-predict cloud expenses.