Why Are Some Companies Leaving the Cloud in 2025: Is It Time to Come Down from Cloud 9?

The cloud has been on the hype train in the past decade. The rapid adoption of cloud infrastructure has especially accelerated during the COIVD-19 Global Pandemic, which shocked the world’s economy and forced businesses to adopt remote work practices to keep the lights on. The cloud has promised to save organizations money and provide high scalability, and improve team collaboration to provide software delivery on demand, online, on a pay-as-you-go model. How do these promises hold up? In this article, we will examine the disadvantages of cloud computing and the reasons behind why some companies are ditching the cloud in favor of alternative IT infrastructure configurations instead.

High Costs

Let’s talk money. The first reason that companies are leaving the cloud is because it doesn’t make sense for their bottom lines. 43% of IT leaders reported that migrating to the cloud was more expensive than expected. Companies have saved millions of dollars by reducing their cloud storage. For example:

• Dropbox save $74.6M over 2 years?
• Basecamp saves $7M over 7 years
• 37 Signals saves $2M over 1 year

According to a survey conducted by HashiCorp , 94% of businesses reported incurring unnecessary expenses. The reason why companies have experienced unexpected costs of using cloud services is because of misconfigurations and maintaining idle resources. This leads to huge amounts of cloud waste. To avoid these unexpected charges and to potentially save millions, companies are migrating some or all of their IT infrastructure on-prem, a movement known as “cloud repatriation” in the IT industry.

Security, Privacy & Compliance

The question of whether the cloud is more secure than on-prem is a nuanced discussion that depends on a variety of factors. It’s complicated. Storing sensitive data on servers located potentially anywhere around the globe that another entity owns is risky, especially when compliance standards such as HIPPA, GDPR, and PCI DSS must be considered. 80% of the data breaches in 2023 involved data stored in some type of cloud environment. Furthermore, the cost of a single cloud data storage breach cost businesses $4.45M on average globally. There have been other prominent cloud data storage breaches from top fortune 500 companies, such as Capital One , Uber , and Twilio . These breaches have further brought into question the level of security that is attainable for sensitive company and consumer data.

When dealing with cloud security, cloud service providers operate on the “shared responsibility” security model, which means that they are responsible for securing their data centers and remote servers worldwide. Cloud security professionals are responsible for configuring the cloud resources properly to accurately monitor, triage, and resolve incidents. To better understand the “shared responsibility” model, think of renting an apartment. The apartment complex is responsible for securing the lobby and elevator with a key fob, for example. However, the apartment renter is responsible for locking the apartment doors themselves. So, the key takeaway here is that proper cloud security configurations are crucial for significantly reducing the amount of cloud breaches year over year.

So, it’s best to keep company data on-prem, right? Well again, it’s not that simple. However, due to the fact that only 20% of the data breaches in 2023 didn’t involve the cloud, one could argue that on-prem is more secure. On the other hand, this could be due to the hype surrounding cloud in recent years. As a result, cyber criminals have been setting their crosshairs on cloud targets more frequently, not necessarily because on-prem is more secure but because of the high likelihood of capturing data from high profile cloud targets. The bottom line is that migrating data on-prem won’t make companies immune to all cyber attacks but it at least could significantly reduce the chances of being a victim to cyber crime and definitely give companies more control over their data.?

Limited Control & Flexibility

Speaking of limited control, cloud service providers own the infrastructure in which data is stored. Therefore, they limit the level of control over the actual infrastructure and deployments for cloud customers, as dictated by the cloud service provider End User License Agreements (EULA). So, companies are adopting on-prem or hybrid infrastructure models for more control over their data and IT operations.

Reliability, Downtime, & Performance

Another factor contributing to cloud repatriation is maximizing uptime. In 2023, Amazon Web Services (AWS) , Google Cloud Security , and 甲骨文 Cloud experienced outages. In 2024, the median downtime for high impact outage was 77 hours, costing businesses $1.9M hourly. A report from Cockroach Labs Labs, a database vendor, found that a third of businesses reported to have lost between $100K and $1M. So, instead of relying completely on a third party vendor to run their mission-critical IT workloads, some companies are electing to build their own data centers and servers to minimize downtime. For a list of the 10 biggest cloud outages in 2024, see the article from CRN in the sources below.

Vendor Lock-in

Over relying on a single cloud service provider can be risky for businesses, especially during outages. Similarly, vendor lock-in is another reason for cloud repatriation. Many companies are deciding to adopt a multi-cloud strategy to avoid over dependence on any particular cloud service provider. Migrating large sums of data on-prem or to another cloud service provider can expose companies further to vulnerabilities, high costs, and complex reconfigurations for the new environment(s). Therefore, proper enlisting the right expertise is crucial for environments participating in cloud repatriation.

Alternatives to the cloud: How are companies responding?

The issues mentioned above have inspired many companies to move to a hybrid IT infrastructure model or pull out of the cloud entirely (cloud repatriation). Some companies are configuring their IT infrastructure on-premises instead. On-premises or “on-prem” IT infrastructure is when companies set up their own servers and data centers on-site. A hybrid IT infrastructure model is a mix of both on-prem and cloud. Most organizations are realizing that adopting a hybrid model allows them to gain the benefits of both, while the downsides of both cloud and on-prem are offset by one another. 42% of organizations have moved or are at least considering to move at least half of their cloud based workloads on-prem. Additionally, some companies are choosing to use two or more cloud service providers to prevent being too dependent on one cloud service provider. Deciding whether to switch to a multi-cloud, on-prem, or hybrid environment will depend on your exact situation. Be sure to consult a cloud professional when making such an important decision.?

What does this mean for cloud professionals going into 2025?

Cloud professionals should definitely be well versed in networking, configuring, and maintaining physical data servers. This will enable businesses to be able to properly and safely migrate their applications, services, and data to alternative environments.?Equipped with the right skill set, businesses will be able to maximize IT operational efficiency, while minimizing downtime.

Conclusion

Some companies are deciding to move away, either partially or entirely, from cloud computing due to the high costs, avoidance of cloud over dependance, increased control over resources, improved reliability, and better data privacy, control over security, and compliance adherence. The question of whether it’s better to go with the cloud, on-prem, or a mixture of both is nuanced and varies on a case by case basis.?

Sources:

(2025, January 9). “Cloud Repatriation: Examples, Unpacking 2025 Trends & Tips for Reverse Migration” Puppet. https://www.puppet.com/blog/cloud-repatriation?

Wade, T. (2024, December 5). “The 10 Biggest Cloud Outages Of 2024” CRN. https://www.crn.com/news/cloud/2024/the-10-biggest-cloud-outages-of-2024?

Butler, G. (2024, October 19). “37signals claims it saved almost $2m last year from cloud repatriation” DatacenterDynamics . https://www.datacenterdynamics.com/en/news/37signals-claims-it-saved-almost-2m-last-year-from-cloud-repatriation/?

Shaikh, K. (2024, September 20). “Cloud Exit: 42% of Companies Move Data Back On-Premises” Technopedia.io .? https://www.techopedia.com/cloud-exit-as-companies-move-data-on-premises

Abhirup, G. (2024, June 29). “5 Major Cloud Security Breaches: Lessons Learned and Strategies for Robust Protection” LinkedIn .? https://www.dhirubhai.net/pulse/5-major-cloud-security-breaches-lessons-learned-strategies-guha-ikuxc/?

(2023, July 07). “Disadvantages of Cloud Computing” QA Ltd https://www.qa.com/resources/blog/disadvantages-of-cloud-computing/?

Andy, L., Simon, L. (2023, March). “Annual outages analysis 2023: The causes and impacts of IT and data center outages” Uptime Institute. https://datacenter.uptimeinstitute.com/rs/711-RIA-145/images/AnnualOutageAnalysis2023.03092023.pdf?mkt_tok=NzExLVJJQS0xNDUAAAGKjSDFvBZwbOB6fZpkNV3lXIyqC1Xo_fMcQCiK_HKyPKNwNPy6Gpj6voIWChuo_sCejR_L8bhFNDxeRne05FDAnt-uG-sgRb2-WtoiDDT7Jw