Insights

Has the cloud delivered its promises?

Rick Clark, Global Head of Cloud Advisory

Enterprises are expressing regret about their cloud migrations, a common sentiment we have encountered in our cloud advisory practice over the past few years. The legacy CapEx model was slower and more bureaucratic than a cloud OpEx model, and the cloud was viewed as a panacea that would increase business agility and shorten time to market. Enterprises pushed workloads to the cloud, regardless of appropriateness. This resulted in a transition that was more complex and time-consuming than anticipated, with cloud costs often exceeding those of on-premises solutions.

The cloud can feel like a "black box," obscuring the true financial costs while failing to deliver the expected business benefits. Hindsight provides valuable lessons on how we got here:

Expensive lift and shift strategy

One of the biggest problems we see is that businesses chose to lift and shift applications to the cloud, with the intention of gradually rewriting them. But then they didn’t. These are generally the most expensive types of workloads in the cloud. We’ve seen a company’s entire yearly cloud budget drained in a month because tightly coupled legacy applications have not been rewritten to take advantage of a cloud-native architecture.

Disconnect between cloud technology and business needs

The transition to the cloud often shifted decision-making from business teams to the technology group, resulting in decreased transparency. If you look at a cloud bill, it can be millions of lines long with very specific technical information; like this data was transferred here, or this CPU was used this much. But that doesn't mean anything to a business. The visibility and traceability of costs were lost. Traditional cost/benefit decisions such as the level of system resiliency or application performance appropriate for the business suddenly shifted to technologists rather than financial analysts. However, we did not make the necessary change in compensation to ensure technologists managed cloud costs or provide extra training with these new responsibilities.

Over-rotating on developer flexibility

The move to programmable cloud infrastructure brought a shift towards greater developer autonomy. Many of the guardrails provided by the enterprise architecture and infrastructure teams were removed in the name of developer flexibility. This created a perfect storm where deployment decisions were in the hands of developers, who were free to spin up cloud resources, configure their own virtual machines, and even decide which cloud provider to use. They were essentially free to use the fanciest, coolest, most modern technology. It is a trap that enthusiasts, and true believers in the cloud like me, can easily fall into.

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Should you repatriate workloads back to on-prem?

With increasing pressure to reduce cloud costs, many CTOs and CIOs are considering cloud repatriation—moving workloads back on-premises. As hard as it may seem, it’s important to think beyond just the cost. A thorough understanding of workload requirements is essential for making informed decisions for each application. For instance: If your application needs to scale quickly, such as an e-commerce site experiencing a sudden traffic spike, a rapid expansion in capacity is necessary. That’s not possible on-prem.

AI workloads are another category best suited for the cloud. These workloads require specialized hardware, which cloud vendors can readily provide. These vendors are continuously expanding their cloud infrastructure in anticipation of future needs.

Big data is one of the top workloads moved to the cloud. Cloud vendors offer many tools and services that make analytics processing fast and efficient. It's not necessarily less expensive in the cloud, but this is a good example of where the value gained in the cloud justifies the additional costs.

Additionally, many organizations overlook how much IT operations have evolved since moving to the cloud. Cloud transformation involved reconfiguring IT operations around IaaS, PaaS, or SaaS services. Bringing applications back on-prem strips away those service layers, leaving ops teams unprepared or unwilling to handle the administrative and maintenance burden again.

If you are considering private cloud on-premises, make sure that strategy is compatible with your public cloud strategy before you start repatriating your applications. For example, containers should be part of your private cloud strategy to abstract some of the complexity. You’ll need to develop the capability to support Kubernetes on-premises.

One final consideration before repatriating workloads is cloud security. Security is one of the many advantages of a cloud infrastructure. When businesses first started moving to the cloud, security was a major concern. It turns out cloud providers are better at security than you are. They can’t fix security holes in your software or other operator error scenarios, but a cloud infrastructure provides greater isolation if a breach does occur. For instance, when a data center firewall is breached, the hacker is in your data center. In contrast, a breach in a cloud instance typically does not compromise other parts of your network.

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The enduring value of the cloud

Enterprises were expecting cost savings from the OpEx financial model of the cloud. However, by not re-writing applications for a cloud architecture and over-rotating on developer flexibility, the business value was no longer clear. If anything, server virtualization on-premises was the big cost saver for data center budgets, not an OpEx model in the cloud. But the actual value of the cloud is still there. Cloud is more reliable, more secure, and more scalable than an on-prem data center. When implemented correctly, programmability and cloud-native app dev result in substantial improvements in developer productivity and operational efficiency.

You can also watch my short videos on these topics:

Before you repatriate cloud loads, consider the business needs of the application

What workloads are best to leave in the cloud?

Should you be concerned about security in the cloud?

Will businesses lose agility if they repatriate workloads to on-premises?

Meet UST's cloud experts. We’d love to speak with you about your cloud strategy.

A version of this article was originally published on The New Stack.