Are Unpredictable Cloud Costs Driving Companies Back to On-Premises?

The cloud has long been seen as a way to save money on IT costs. However, recent research has shown that this is not always the case.

According to Forbes, many companies that aggressively migrated their work from on-premises clouds are looking to move work back to on-premises and private clouds. The mindset that the public cloud saves money because a company only pays for what it uses is just theoretical and really an illusion. Realistically, companies tend to buy capacity rather than actual time used.?Thus, companies are in a take-or-pay situation like the economics of a private cloud or on-premises solution.

Companies that migrated large estates to the cloud increasingly find their budgets are more difficult to manage in a public cloud environment, and they spend far more than they anticipated.

There are a number of reasons why cloud costs can be unpredictable.

• First, cloud providers often charge for services that were previously included in the base price. For example, many providers now charge for data egress, which is the cost of transferring data out of the cloud.
• Second, cloud providers frequently introduce new services that can add to the overall cost of a cloud deployment.
• Third, the cost of cloud computing can vary depending on the region and the time of day.

A Nutanix report found that 85% of respondents are moving up to half of their cloud-based workloads back to on-premise hardware.?This shift in strategy is attested to by the emerging dominance of the hybrid cloud model, which incorporates and balances the benefits of both cloud computing and existing on-premise data centers.

Conclusion:

As a result of these unpredictable costs, many companies are now reconsidering their cloud strategies. Some companies are moving their entire data centers back to on-premises, while others are adopting a hybrid cloud approach. By carefully considering their needs and requirements, businesses can find the right balance between cloud and on-premises computing to save money and improve their IT agility.