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Clients, Regretting ‘Mad Rush' to Public Cloud, Looking to Private, Hybrid Deployments

Learn from a longtime industry expert about what real-world cloud repatriation takes as end users turn toward private and hybrid cloud alternatives.

Kelly Teal

January 18, 2024

6 Min Read
Stampede to public cloud
Jack VanderToll/Shutterstock

At a Glance

  • The Channel Partners Conference & Expo and MSP Summit are March 11-14, 2024, at the Venetian Resort in Las Vegas.

Are any of your customers among the many organizations taking a second look at their public cloud deployments? If so, you’ll want to spend 25 minutes at the Real-World Cloud Repatriation session, part of the MSP Summit at the upcoming 2024 Channel Partners Conference & Expo, March 11-14, in Las Vegas. Speaker Dany Bouchedid expects that you’ll be “pleasantly surprised” by what he has to say.

“I think partners will be happy to hear that the traditional solutions that they may have known for much longer than cloud are not dead but are, in fact, making a resurgence,” Bouchedid said.

That’s a bold claim in the era of endless talk around the hyperscalers and public cloud. But, as CEO of Colotraq, a longtime technology sourcing and consulting firm, Bouchedid witnesses organizations’ cloud struggles firsthand.

“I think now that the dust has settled from the mad rush to the cloud, customers are taking a long hard look at their operating expenses, their overall cybersecurity program, performance and efficiency of their systems and architecture, and making sure it is right-sized for their needs,” he said. “Another thing to note here is that almost all new deployments now tend to evaluate all of the options to public cloud before making a decision, particularly because public cloud platforms make it difficult to switch back away from them by design."

Related:Register for CP Expo/MSP Summit 2024, March 11-14, Las Vegas

To those points, Colotraq now sees more than one-third of its clients who rushed to the public cloud switching back to private environments including colocation, private cloud and on-premises infrastructure, per Bouchedid. 

Moreover, more than half of Colotraq’s projects over the last five years have come in the form of hybrid cloud deployments. These are emerging as the standard for enterprise IT infrastructure, in Bouchedid's experience.

“Many have legacy systems that are inextricable and difficult to migrate to a public cloud, or many applications and workloads that simply don’t make sense to be in a public cloud,” Bouchedid explained. (On the flip side, he notes, DevOps and beta applications often do work well in the public cloud.) 

Hybrid cloud provides a soft landing, supporting the easy stand-up of IT resources and the ability to move them to and from a public cloud on-demand, he said.

Colotraq's Dany Bouchedid

With all this in mind, Bouchedid predicts that attendees will, as a result of tuning in to his session, “be able to take a deeper dive within … clients’ IT infrastructure needs like never before.”

Join Bouchedid on Monday, March 11, at 3:20 p.m. to learn more. In the meantime, check out this short Q&A with Bouchedid in advance of his Real-World Cloud Repatriation talk.

Related:Shared Responsibility Matrix Crucial for MSPs, MSSPs

Channel Futures: Why is cloud repatriation becoming such a big opportunity for partners?

Dany Bouchedid: When cloud came out, very few C-suite folks understood it (heck, many still don’t!), yet they all had fear of missing out. So, many gave all-encompassing mandates within their organizations to migrate all of their workloads and applications to the cloud. It was the trend of all trends in IT. However, many companies have since realized they might have rushed too much of their IT infrastructure too soon to the cloud and that it is not the be-all-end-all for every client, and every use case and application.

CF: What’s one use case that perhaps surprised or shocked you, that underscored that public cloud was not the right approach for the user in question? What characteristics did that use case feature that partners might want to use as indicators that they should talk repatriation?

DB: We had one client that moved its entire IT infrastructure to a public cloud provider but soon started to see their opex spiral out of control. Not only was it higher than ever, but it became highly unpredictable. When the client asked us to take a look at their monthly bill, we were shocked that it was 77 pages long. Long story short, after doing a full IT and workload assessment for their applications, we were able to migrate them to a traditional two racks of colocation. Now their fixed and predictable bill is only two pages long and, more importantly, nearly 60% less than what they were paying.

CF: Speaking of those indicators, though, what are some additional signs partners should heed to help customers decide whether repatriation is in their best interest?

DB: While the No. 1 driver or indicator for cloud repatriation tends to be cost, it’s not the only one by any stretch. Clients — depending on their unique workloads and applications — may have several other drivers such as overall control of their IT infrastructure, its controls and security, performance, compliance, regulations, internal policies, as well as uptime and availability.

CF: How might a cloud-repatriation sale differ from a pitch for public cloud? Please go into detail about the talking points, process, etc.

DB: Well, cloud repatriation is not a product or service to be pitched per se. It is a concept that is impacting any client’s IT or telecom infrastructure. The best way to approach this from a sales perspective is to make sure we are not out there just throwing whatever trendy products and services at our clients. We need to make sure we truly analyze and evaluate their actual existing workloads and applications, and provide the appropriate solution for their specific needs. 

Now, that very well could be a public cloud solution. We have seen that to be the case for many of our SMB clients. But when you start dealing with enterprise clients and their complex requirements, we then need to make sure we are not pitching a type of architecture that they simply don’t need. For example, in telecom maybe a small business truly just needs some POTS lines. I know we are all in love with UCaaS and VoIP, but just make sure you are actively listening to your clients’ needs. 

In our data center world, cloud repatriation is probably the most prolific. As my earlier case study outlined, there are so many use cases that simply don’t make sense to be in a public cloud environment while there are some that [do]. For example, some data center requirements make far more sense in a colocation, bare metal, private cloud or hybrid cloud environment than they do in a public cloud. This is where we, as consultants, can truly add the most value to our clients by helping them navigate the myriad choices out there. But the process has to start with a true consultative sales approach.

CF: Which verticals or markets seem most suited for cloud repatriation in 2024/2025, and why?

DB: There are several markets or technologies that are driving cloud repatriation and will continue to in the near future. 

For starters, blockchain or distributed ledger technology works best when the nodes are in physically colocated environments in specific geographic locations for true control and security. Geographic requirements or constraints, something public cloud cannot provide due to its obvious ubiquity, are also the reason we are seeing edge computing become a major driver for cloud repatriation. As post-pandemic workforces become more distributed and further away from inner cities, computing and processing power is required further out at the edge with low latency, and that can only be achieved with an actual physical footprint. 

Another fast-growing vertical or market that we have seen be a major driver for physical colocation versus public cloud is AI/machine learning. The reason is not only the sheer amount of servers required for these types of deployments but these unique servers’ architecture run on GPUs, not CPUs, and are hence power-intensive. We have been seeing all of these deployments go into traditional data centers and don’t see that trend subsiding any time soon.

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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