Why Companies Are Ditching the Cloud: The Rise of Cloud Repatriation

> Cloud providers can also over-provision

But they don't. AWS overprovisions only on T-type instances (T3,T4,T5). The rest of the instance types don't share cores or memory between tenants.

I know, I worked with the actual AWS hardware at Amazon :) AWS engineers have always been pretty paranoid about security, so they limit the hardware sharing between tenants as much as possible. For example, AWS had been strictly limiting hyperthreading and cache sharing even before the SPECTRE/Meltdown.

AWS doesn't actually charge any premium for the bare metal instance types (the ones with ".metal" in the name). They just cost a lot because they are usually subdivided into many individual VMs.

For example, c6g.metal is $2.1760 per hour, and c6g.16xlarge is the same $2.1760. c6g.4xlarge is $0.5440

> And lots of other more esoteric stuff.

Not really. They had some plans for more esoteric stuff, but anything more complicated than EC2 Spot does not really have a market demand.

Customers prefer stability. EC2 and other foundational services like EBS and VPC are carefully designed to stay stable if the AWS control plane malfunctions ("static stability").

GEICO is moving away from the cloud because their IT is a joke. They had a horrible on-prem infrastructure, so they moved to the cloud not knowing how, and they made the same mistakes in the cloud as on-prem, plus the usual mistakes every cloud migration runs into. They are moving away from the cloud because their new VP's entire career is focused on running her own hardware. What we know about their new setup is absolutely bonkers (like, K8s-on-OpenStack-on-K8s bonkers). Look to them for what not to do.

37signals is like the poster child for NIH syndrome. They keep touting cost savings as the reason for the move, but from what I have gathered, they basically did nothing to save cost in the cloud. It is trivial to save 75% off AWS's list price. They will even walk you through it, they literally want you to save money. That, plus using specific tech in specific ways, allows you to reap major benefits of modern designs while reducing cost more. 37signals didn't seem to want to go that route. But they do love to build their own things, so servers would be a natural thing for them to DIY.

Almost every argument against the cloud - cost inefficiency, fear of vendor lock-in, etc - has easy solutions that make the whole thing extremely cost competitive, if not a way better value, than trying to become your own cloud hosting provider. It's very hard to estimate the real world costs, both known and unknown, of DIY hosting (specifically the expertise, or lack of it, and the impacts from doing it wrong, which is very likely to happen if cloud hosting isn't your core business). But it's a 100% guarantee that you will never do it better than AWS.

AI is the only place I could reasonably imagine somebody having an on-prem advantage. At the moment, we still live in a world where that hardware isn't a commodity in the way every other server is. So you might just be faster to deploy, or cheaper to buy, with AI gear. Storage is similar but not nearly as tight a market. But that will change eventually once either the hype bubble bursts, or there's more gear for cheaper for the cloud providers to sell.

I will use an opportunity to confirm that cloud is ill-suited for almost all but niche business cases and majority of users were dragged into cloud platforms either by free credits or (my suspicion) some grey kick-back schemes with C-level guys.

At my current project (Fortune 500 saas company, was there for both on-prem to cloud and then cloud-to-cloud migration):

a) Resources are terribly expensive. Usual tricks you find online (spot instances) usually cannot be applied for some specific work related reason. In our estimates, in contrast to even the hw/sw list-prices, cloud is 5x-10x more expensive, of course depending on the features you are planning to use.

b) There is always a sort of "direction" cloud provider pushes you into: in my case, costs between VMs and Kubernetes are so high, we get almost weekly demands to make the conversion, even though Kubernetes for some of the scenarios we have don't make any sense.

c) Even though we are spending 6 figures, now maybe even 7 figures on the infrastructure monthly, priority support answer that we receive are borderline comical and in-line with one response we received when we asked why our DB service was down, quote: "DB has experienced some issues so it was restarted."

d) When we were having on-prem, some new features asked from ops side, were usually implemented / investigated in a day or so. Nowadays, in most cases, answers are available after week or so of investigation, because each thing has its own name and lingo with different cloud providers. This can be solved with specific cloud certifications, but in real-world, we cannot pause the business for 6 months until all ops are completely knowledgeable about all inner workings of the currently popular cloud provider.

e) Performance is atrocious at times. That multi-tenancy some guys are mentioning here is for provider's benefit not for the customer. They cram ungodly amount of workload on machines, that mostly works, until it doesn't and when it does not, effects are catastrophic. Yes, you can have isolation and dedicated resources, but a)

f) Security and reliability features are overly exaggerated. From the observable facts, in the last year, we had 4 major incidents lasting several hours strictly related to the platform (total connectivity failure, total service failure, complete loss of one of the sites, etc).

In the end, for anyone who wants to get deeper into this, check what Ahrefs wrote about cloud.

>K8s-on-OpenStack-on-K8s bonkers

Do what now???

And then there's me: never left the datacenter in the first place.