Stormy Skies Ahead? Report Finds 20% of Businesses Intend to Move Workloads From Cloud to On-Prem

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Is there an economic storm brewing in the public cloud sector? IT asset management firm Device42 thinks the skies could be darkening. The company has released the results of its Cloud Adoption Survey that found 20% of businesses have or intend to redeploy workloads from the cloud to on-premises infrastructure.

The report’s key findings show a mixed bag for the future economic prospects of the cloud sector. Cloud demand seems strong with 85% of respondents reporting they have already or plan to deploy more workloads into the cloud, and 60% believe their cloud consumption will continue to grow for the next three to five years.

However, there are certain factors that could converge to counter some of this growth with what could possibly be a significant movement of workloads away from the cloud. Of the companies surveyed, 50% reported continued reliance on traditional datacenters for parts of their business. The report found several potential reasons for this, including a perceived lack of faith in the magic behind the cloud. Only 13% of businesses believe the cloud has delivered on its promises of cost savings. An additional 50% say they do not have the same visibility into cloud resources as they do for those on-prem, and more than half are not sure exactly what infrastructure they have in the cloud.

Cost concerns are also a factor, as 80% reported believing the cloud is expensive or is becoming more expensive. Two-thirds believe the cloud has delivered on their technology expectations, but it has come at a significant cost. Additionally, only 1/3 of respondents reported deploying containers and just 17% have adopted microservices, both of which can optimize cloud workloads and possibly save compute resources to lower costs.

“Coming on the heels of declining growth and widespread layoffs in the technology space, these survey results may indicate that an economic ‘perfect storm’ is approaching for the cloud sector,” said Raj Jalan, CEO of Device42. “In periods of economic uncertainty, businesses are watching spending closely. The cloud sector is still strong, but user intent and perceptions as revealed in the Device42 report underscore a need to communicate value more effectively and help users better understand their cloud resources to forestall a reverse migration to traditional on-premises infrastructure.”

Another notable finding from the report is that AWS and Azure were tied in terms of the surveyed companies’ top choice for cloud services. Device42 noted that AWS had normally grabbed the first spot by leaps and bounds in past surveys, but it is now neck and neck with Azure. Gartner’s 2022 Magic Quadrant for Cloud Infrastructure and Platform Services ranked these companies as leaders, along with Google Cloud, and found that AWS was the market share leader with two times the revenue of Azure. Gartner predicts this lead will shrink in the near future due to a number of factors, which could reflect Device42’s findings.

It will be interesting to see how cloud adoption pans out in the post-pandemic era. Businesses have their reasons for going either way or sticking to a hybrid scenario. The survey found that for those who have not yet adopted the cloud, the wrong business fit is the top reason. For those who have taken their workload deployments skyward, their primary reason is to scale and optimize their IT resources in support of their businesses. View the full Device42 survey results here.

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