The cloud exit - a perceived or real phenomenon?

A recent article from CIO.de discusses why many companies are currently rethinking and adapting their cloud strategy. The article highlights that flexibility, security and cost optimization are the main drivers for a realignment of cloud strategies. Companies are faced with the challenge of finding a balance between on-premises solutions and cloud services in order to meet the different needs of each company. Hybrid models are playing an increasingly important role here, as they combine the advantages of both worlds. In this blog post, I would like to make a few additions to the CIO article and differentiate a little more.

What are the reasons for the so-called “cloud exit” and is it really one?

The article states that more and more companies are rethinking their “cloud first” approach and some are even withdrawing from the cloud completely. The reason for this is that the expectations regarding cost reduction that are placed in a cloud migration or “cloud-first” strategy are being disappointed. Ultimately, in some cases even large cost savings can be realized by withdrawing from the cloud.

My urgent recommendation in consulting projects with customers is:

1. first carry out an assessment of the infrastructure and applications before deciding whether to place the respective applications in the cloud or on-prem. Also consider with which other applications there is a high level of data exchange, as outgoing traffic costs money for the cloud providers. These applications should therefore be grouped together and operated on the same platform.
2. almost all companies ultimately end up in a hybrid scenario, i.e. they use both their own data centers or hosting and cloud services. And there are almost always good reasons for placing applications in one model or the other.
3. after the migration is before the optimization: If you migrate and don’t optimize anything afterwards, you will pay more in the long run. Optimization means establishing procedures to continuously monitor and adjust cloud resource usage. It also means checking whether cloud-native services - e.g. cloud-native databases - can be used.

If these measures are not implemented, the aforementioned disappointment is inevitable and the costs do not meet expectations.

Using “legacy workloads” correctly

The CIO article suggests that the most common reason for returning individual applications to on-premises is that they are “not exactly modern corporate workloads”.
There are two possible answers to this:

1. one can deliberately move legacy applications to the cloud and let them “die” there after end-of-life. This has two advantages: Firstly, the operating expenses are lower and as usage decreases, fewer and fewer resources are required. Secondly, in the case of older Windows servers, license costs can be saved. The old application is replaced by an application with modern architecture, a SaaS solution or a new development with cloud-native technologies. This allows the benefits of the cloud to be fully exploited.
2. if the legacy applications are not to be replaced, it is necessary to evaluate the options for modernization. This can be, for example, a partial redevelopment or the use of supplementary cloud-native services.

IIf none of these answers are an option, remaining on-premises is a sensible solution. As an alternative, private clouds from various manufacturers or local clouds, e.g. Azure HCI or AWS Outpost, should also be examined, as they offer - reduced - cloud functions in your own data center. This also has the advantage of keeping the data in-house and being able to use standardized management with the public cloud at the same time.

How do companies use AI services?

The demand for machine learning and AI services in companies is growing and is currently reaching hype levels. The article cites Ford Motor Co. as an example, which has its own HPC cluster. However, only large companies usually have the option of setting up such architectures or machine learning models in-house. Smaller companies select suitable models from the large cloud providers and develop their applications on them. This is faster and more efficient. However, it is important to keep an eye on all areas in which company data is processed. Here, too, there are various solutions to avoid exposing confidential data. It is true that the selective use of public cloud services does not require a comprehensive migration to the cloud.

The differentiated approach - how do you arrive at a hybrid model?

A pure public cloud strategy is rarely the solution of choice. As a rule, companies use both hosted infrastructure, in their own data centers or with a hosting partner, and combine this with cloud landing zones with public cloud providers. However, many factors need to be taken into account when planning and implementing these hybrid models and companies often seek external support with the architecture and setup. A hybrid model should always answer the following questions, among others:

• How will the public cloud provider be connected to the corporate WAN in a meaningful way?
• How is the overarching security of the hybrid architecture ensured?
• How will the operational organization be adapted to the hybrid model?

Conclusion: continuity is required

It can be stated: The “cloud exit” trend is often not really an exit at all, because companies had not yet really arrived in cloud technology. In general, it is important to evaluate exactly in which environment applications can be operated most efficiently and cost-effectively. However, it is just as important to align the IT organization and specialist departments with the use of cloud services and to continuously optimize the cloud services used. Adapting the cloud strategy is not a one-off process, but a continuous journey. IT managers should regularly take the time to review their strategies and ensure that they meet current and future requirements. The good news is that the question of the optimal use of public cloud services is now being approached in a more planned and strategic way. However, in order to explore the possible options for the company, good advice and support is still required to avoid making a potentially expensive trip to the cloud and having to correct mistakes at great expense.

We would love to hear your thoughts on this topic! Have you already made adjustments to your cloud strategy? What challenges and opportunities do you see? Share your experiences or contact us directly to discuss further.