IDC: Many companies want (partly) out of the cloud
Too expensive, too complicated, too slow: IDC market researchers see a clear trend of companies taking workloads back from the cloud.
(Image: iX)
Four factors are causing more and more companies to move their workloads out of the public cloud. Market researcher IDC cites costs, performance, security and compliance as well as management as the biggest drivers behind the trend. However, this explicitly does not mean that most users are completely abandoning the public cloud: Instead, most customers would prefer a mixture of on-premises, private cloud and public cloud. Only 8 to 9 percent are said to be planning to bring their workloads back completely – and large companies in particular are now increasingly tackling this transformation.
Public cloud usually too expensive
First and foremost, the market researchers clearly state that the costs are too high: more than half of companies would exceed their cloud budgets this year, slightly more than in 2023. Not only higher provider costs, but also the complexity of the booked services, higher energy costs and new technologies such as generative AI play a role here. IDC also emphasizes that the trend towards the cloud was accompanied by the promise of lower IT costs. The fact that this does not always have to be true is not only shown by the market researchers' report, but also by the current example of 37signals: the developer of Basecamp and HEY is saving almost two million US dollars a year by switching to on-premises.
According to IDC, a look at performance shows that latency problems are a frequent complaint from customers in certain areas of application. One example of this is AI workloads. Here, an on-premises infrastructure is superior to the public cloud. Data protection and data security are also critical for some cloud customers: how legally secure the use of Microsoft 365 by public authorities, for example, really is is at least controversial in Germany. However, major outages at Microsoft Azure or Amazon AWS do not inspire confidence among customers either. To compensate for technical and business disadvantages, many companies are opting for a multi-cloud strategy –, but such an environment is far more complicated to administer. According to IDC, it is easier for many customers to maintain control on premise.
A trend for some workloads
However, the market researchers emphasize that the public cloud will remain a central component of IT operations for most companies. Instead, the current trend shows that customers are taking a hybrid approach – and that they need to consider the four different factors for individual workloads in order to decide on the right operating mode.
More details can be found in the IDC blog.
(fo)
