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"Major organizations like 37signals and GEICO". Sorry, what? Citing two companies? And how does a $37bn company compare to 37signals? Such an odd pair of companies to choose. Is DHH friends with the author? I'd be more interested in statistics about total cloud vs onprem spend across all companies, over time, to support assertion that "companies are ditching the cloud" A very poor article
I don't know that 37Signals counts as a "major enterprise". Their Cloud exodus can't have been more than a few dozen servers, right? Meanwhile AWS is growing at 20%/year, Azure at 33% and GCP at 35%. That doesn't seem compatible with any kind of major cloud repatriation trend.
In this cycle a new MBA comes in wants to make an impact so does a cloud transition. Then they move on and the next guy comes in, wants to make an impact so moves things back in house. Repeat until some new fad comes along.
Kjell's Law: the cost of a platform eventually exceeds the cost of the one it replaced. But each cost is in a different budget. We seem to have replaced cooling and power and a grumpy sysadmin with storage and architects and unhappy developers.
We had happy developers before? Amazing.
Kjell's Law: the cost of a platform eventually exceeds the cost of the one it replaced. But each cost is in a different budget. We seem to have replaced cooling and power and a grumpy sysadmin with storage and architects and unhappy developers.
Now, businesses shifting back to on-prem because they are still uneducated on how to make cloud useful. They will just shift all non-core activities to XaaS vendors, reducing their own cloud managed solutions.
Source: dealing with multiple non-software, tech firms that are doing just that, shifting own things back to on-prem, non-core resources to XaaS.
You can have a 100Gb uplink on a dedicated fibre for less than 1000$/month now. Which is insanely less than cloud bandwidth. Of course there are tons of other costs, but that alone can suffice to justify moving out of the cloud for bandwidth intensive app.
Then, because they probably have private atlantic cables, you can replicate at good reliable speed.
Cloud is also good for episodic use of expensive exotic systems like HPC and GPU fleets, if you don’t need them all the time- I call this serial multi-tenancy.
Cloud is not economical for massive storage, especially if you’re not willing to use backup solutions and reduced availability. For example, AWS S3 default keeps multiple copies of uploaded data; this is not comparable to typical on-premises RAID 1 or RAID 3. You can save money with reduced redundancy storage but then you have to take on more of the reliability burden. Likewise compute is cheap if you’re buying multi-tenant instances, but if you want dedicated instances or bare metal, then the economics aren’t nearly as attractive.
Cloud is also good for experimentation and rapid development - it’s so much faster to click a few buttons than to go through the hardware acquisition processes at many enterprises.
The companies that regret cloud due to financial concerns usually make two mistakes.
First, as noted above, they pay for premium services that are not directly comparable to on-prem, or they use workloads in cloud that are not cloud economical, or both.
Second, they don’t constrain random usage enough. It is super easy for a developer doing some testing to spin up thousands of dollars of bill. And it’s even worse if they leave it at the end of the day and go home- it’s still racking up hourly usage. And it’s downright ugly if they forget it and move on to something else. You have to be super disciplined to not spin up more than you need and turn it off as soon as you’re done with it.