The Cloud Pushback: Why Enterprises Are Rethinking Their Relationship with Cloud Providers

By David Linthicum

A senior CIO of a leading retail organization recently shared a story with me that exemplifies the growing frustration many enterprises are experiencing with cloud service providers. Over coffee, she confided that during a recent executive meeting, she openly proposed pausing further cloud migrations—and even suggested bringing back a portion of their workloads to on-premises infrastructure.

Her reasoning? Despite years of investment in cloud adoption, costs had spiraled out of control, with a significant percentage of their cloud bill stemming from unanticipated expenses like data egress fees and scaling charges. Furthermore, her organization had grown increasingly frustrated with the lack of flexibility in vendor contracts and the constant challenges posed by lock-in. What was once hailed as the natural progression of IT strategy—moving to the cloud—was now a subject of heated internal debate.

This CIO is far from alone. Across industries, enterprises are reassessing their cloud strategies and pushing back against providers like AWS, Google Cloud, and Microsoft Azure. The move to the cloud, which was once seen as an inevitable leap forward, is now met with a more cautious, "Cloud Smart" approach. Let’s unpack the reasons why enterprises are reevaluating their cloud commitments and what this means for the future of IT.

The Cloud Cost Dilemma: A Growing Concern for Enterprises

One of the most common complaints I hear from organizations is the issue of unexpected cloud costs. According to recent studies, 81% of enterprises exceed their planned cloud budgets. Why is this happening? The answer lies in unforeseen expenses baked into the model.

Take, for instance, data egress fees—costs incurred when transferring data outside of a cloud provider’s environment. For organizations with heavy data usage, such as those leveraging advanced analytics or AI, these charges can add up to millions each year. Similarly, auto-scaling, while powerful in theory, can lead to resource sprawl if not meticulously managed, creating yet another source of financial strain.

This is forcing CIOs to question whether the centralized nature of cloud providers is truly worth it. Many are beginning to track workloads and resources with a far more critical eye, running extensive ROI analyses to ensure they’re getting value for what they’re paying. In some cases, these analyses lead to the conclusion that moving certain workloads back to on-premises data centers, or adopting hybrid strategies, makes more financial sense.

Loss of Control: The Cloud Lock-In Challenge

Beyond costs, another pain point for enterprises is the loss of control in the cloud ecosystem. Many companies find themselves locked into one provider, where migrating workloads elsewhere comes with huge technical, operational, and financial costs. This lock-in dynamic is especially problematic for businesses that need flexibility when scaling, shifting, or experimenting with different tools.

Ironically, while the promise of the cloud was to make IT more agile, the reality can sometimes feel like trading one set of constraints (on-premises infrastructure) for another (vendor dependence).

This frustration is compounded by complex pricing models and opaque contracts that make it hard for enterprises to predict their cloud expenditures long-term. Many CIOs feel stuck—even when dissatisfaction with a provider grows, the daunting cost and effort of migration keeps them locked into the status quo.

Rethinking Adoption: The 'Cloud Smart' Approach

It’s important to note that enterprises aren’t abandoning the cloud entirely. Instead, many are adopting what’s been coined as a "Cloud Smart" approach. Unlike the early "Cloud First" mindset—which focused on migrating applications to the cloud as quickly as possible—Cloud Smart emphasizes balancing workloads across multiple environments based on specific business needs.

This shift reflects the growing understanding that not all workloads belong in the cloud. Some, particularly those with static resource demands or stringent compliance requirements, may be better suited for private data centers. Similarly, companies exploring generative AI applications are finding that the intense resource demands of training AI models can sometimes be handled more cost-effectively in-house.

Moreover, organizations are investing in hybrid and multi-cloud strategies to avoid the risks of overreliance on any single provider. Instead of putting all their eggs in one basket, enterprises are embracing flexibility—distributing workloads across different cloud providers or maintaining hybrid models where certain systems remain on-premises.

The Talent Gap in Cloud Adoption

Another major hurdle that’s slowing enthusiasm for the cloud is the talent gap. According to recent surveys, 40% of companies struggle to find skilled cloud professionals, hindering their ability to fully leverage cloud technologies.

This scarcity of expertise often results in operational inefficiencies or even security vulnerabilities. Without adequate staff to monitor, manage, and optimize cloud resources, enterprises can struggle to reap the promised benefits of agility or cost savings. Addressing this gap requires significant investment in training, hiring, and developing teams—a commitment that not all companies are prepared to make.

Emerging Trends: What’s Next for Enterprises and Cloud Providers?

The mounting frustrations articulated by enterprises aren’t falling on deaf ears. Cloud providers are beginning to respond. Reports indicate that pricing models are becoming more flexible, and providers are increasingly open to offering custom contracts tailored to unique enterprise needs.

However, enterprises are taking the lead in redefining how they engage with the cloud. An increasing number of firms are scrutinizing contracts, re-evaluating workload distribution, and even exploring options to build their own AI infrastructure to bypass costly cloud implementations.

The relationship between enterprises and cloud providers is entering a new phase—one defined by pushback, bargaining, and the pursuit of more control. And while cloud adoption isn’t slowing down entirely, it’s clearly becoming more nuanced.

Final Thoughts: The Enterprise Awakening

The CIO I mentioned at the beginning of this article realized something very powerful: she wasn’t beholden to the momentum of past decisions. She and her team had the ability to step back, reassess the situation, and chart a course that made more sense for the business—whether that involved the cloud, on-premises infrastructure, or a hybrid of the two.

That’s where we are right now: the great awakening of enterprises regarding the realities of cloud computing. The cloud is still integral to modern IT, but the unquestioning rush toward cloud-first strategies has given way to a more deliberate, careful evaluation of its role within the broader business environment.

For CIOs, the message is clear. Take charge. Advocate for flexibility. Don’t let frustration with cloud costs or limits on control derail innovation—but, at the same time, don’t hesitate to push back against providers when needed. Today’s enterprises have the power to redefine the value they extract from the cloud, and that starts with demanding more from the ecosystem as a whole.

What’s your perspective? How is your organization adapting to the evolving dynamics of cloud computing? Let’s start the conversation.

David Linthicum is a leading authority in cloud computing and enterprise IT strategy, with decades of experience helping organizations navigate the evolving technology landscape.