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so why are so many companies leaving the cloud today the reasons may surprise you let's talk about it yeah so if you've been paying attention
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there's been an awful lot of uh coverage uh around companies who are exiting the cloud uh in major companies in some instances mostly smaller companies who are finding that they're getting better
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value from leveraging non-cloud resources and so they're moving from their cloud deployments back into their on premise deployments or typically to a Colo provider or an MSP provider um
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probably the most uh the the one that's getting the most attention is uh uh David Hansen who uh wrote a um article called the big clot exit FAQ uh which I
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urge you to read and by the way it's linked it's linked down below and he talks about the journeys and getting into the real prices and reasons in why he made the decision to exit the cloud for his particular company and the
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patterns are very much the same so we're finding that um the cost of Hardware has fallen a tremendous amount in the last 10 years as you can see on your screen and that's
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kind of blown a hole in the business case for cloud computing because in many instances as you may remember back in 2010 2012 people were moving into cloud because of the cost advantages capex versus Opex things like that so in other
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words it was sold as something that's going to be cheaper and here we are in 2024 the price of traditional hard drive storage uh servers things that you would normally buy within a data center are
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falling like crazy almost a 45 degree angle and the price of cloud pretty much remaining the same if not rising in in some instances so there's that uh business case that seems to be stressed
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by the fact that in many instances I can run my workloads and store my data within my own data center a data center I rent um and it's going to be cheaper long term than paying the cloud cost and
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there's reasons why you do that so cost really kind of is the main motivator that's driving a lot of people off the cloud it doesn't it doesn't seem to be a failure of cloud they're not running into issues with outages and service
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levels and all those sorts of things they just realize that their workloads that are running on the cloud are are a lot more expensive than they thought they would be and then doing the math and the look at looking at them as
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they're going to run on premise and how much you're going to pay for that and that becomes a business case it's hard to ignore so it's not pushing back against cloud or Cloud failing them it's
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the ability to find the most optimized platform to run their workloads and to store their data and in some instances that's going to be on premise so some people are pushing back on me as I'm writing and speak speaking on this topic
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is say hey Lam you're supposed to be a cloud Advocate you know what are you doing talking about people leaving Cloud never was a cloud Advocate I'm an architect which means I'm uh I'm going to be motivated to find the most
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optimized platforms to run the workloads and systems that I'm building and if that's on premise that's fine if that's on an edge BAS system that's fine if that's on cloud that's fine uh so everything has to be on the table so
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these are kind of natural transitions that are being made by companies that are looking out for their own investors which is why companies exist so cost is the main motivator which is driving people off of cloud if they are moving
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off of cloud the second reason would be failed migrations uh in many instances and I saw this a great deal during the pandemic people were moving massive amounts of workloads uh applications and
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data sets into the cloud and we're doing so without any refactoring or modernization so they're just picking it up basically classic lift and shift pull pulling it off their traditional platforms that sit on premise and
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putting it on cloud-based platforms normally platform analoges and got them running and uh everything was hunky dory until the bill came in and 2022 we saw a massive uh amount of uh companies who
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were complaining about their Cloud bills that you know as I write about in my book were pretty much 2.5 times what they thought they were going to be and those are really kind of self-inflicted wounds the reason is is that they didn't modernize the applications they weren't
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taking advant AG of some of the optimization and utilization uh systems that the cloud provides because they didn't rewrite any of the stuff to exist on the cloud weren't taking uh advantage of native
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security and governance and all these sorts of things and therefore it was a very inefficient application on premise became a very inefficient application in the cloud and ended up costing a lot of money because the cloud is the utility
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very much like if you leave your you know leave your electronics on your house you're going to get a Big Bill from the electric company cloud different so in other words it's going to uh make you pay for the resources that you use and since these
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applications were hugely inefficient uh then they were burning too many resources so we are seeing repatriation uh of these workloads and moving back to the on- premise systems mainly because they're looking at the
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cost of refactoring and modernizing these systems as they sit in the cloud to make them efficient in other words to make them use the cloud in more efficient ways to become cheaper to run and it's uh outweighing their budget and so they're just saying well we'll just
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take them put them back on premise we're be able to run them cheaper and that's going to be the fix for now I guess they're going to have to figure something out at some point but in most a lot of the repatriation cases I see
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that being the case in other words things should never been a mooved to the cloud that weren't fixed and optimized for the cloud realize they to expens it a run pulling him back on premise finally the case would be
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diminishing need need for the cloud I give you a scenario here your startup uh you don't have a lot of cash and you're going to leverage Cloud systems as the place to run say your on demand tools
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for instance and which is fine and dandy uh when you're small and only have a few hundred users but as you grow to 10,000 users and 20,000 users you get to be a much larger operation so suddenly your
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clown bill is very expensive and this by way I think is the case with Hansen as well if you read his FAQ uh and you realize that you're just doing the same thing over and over again you're storing massive amounts of data
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you're you're running different the same patterns of scale so it's not like an Enterprise we're running different applications and different workloads where the cloud can accommodate those things is very convenient to do because we can configure and reconfigure a huge
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ecosystem of technology that they have available and that's really the power of the cloud however in certain situations if I'm running a SAS business for instance um the way I do storage and the way I do compute is going to be the same
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and my ability to scale it up is really all I need to do and so therefore we're going from say a $100,000 Cloud Bill uh year one to a $10 million Cloud Bill
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year five then we're looking at other Alternatives and places where we can run that system and many instances uh as I mentioned with the with the cost of Hardware the on-
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premise systems are going to be a cheaper Al alternative and so case of Hansen I think he went this way and so a lot of companies that are doing similar patterns on the cloud just needed to scale uh they don't view the cloud as
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the best deal and that's probably correct and therefore looking at better less expensive ways to run their workloads and then pulling them back on premise um we saw this over the last five years by the way we saw lots of companies that were providing storage as
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a service and where they were peating the same patterns over and over again very homogeneous in how they deployed their systems uh they realized that the commoditization of the hardware they're using was really how they should be
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thinking and therefore looking at saving some money and then doing the repatriation or even do a partial repatriation in other words repatriating some workloads and data sets uh from the cloud back to on premise and running a
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hybrid scenario so what does this all mean well I think it's a it's a good Trend because what we're doing is we're being very open and honest about the viability of
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these platforms longer terms and we're making rightsizing decisions in terms of moving application workloads and data sets to the platforms where they're going to be uh best optimized so I think
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it's going to be a fine thing for uh organizations to go through this exercise I don't think it's pushing back on cloud I think it's pushing back on on the way the state of cost these days and
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there's lots of good reasons to Leverage cloudbased systems as I mentioned uh a minute ago uh if you're doing a vast array of things which Enterprises typically do You're Building applications using AI using different
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databases things like that the Cloud's going to be the most convenient way to do that and probably the most cost-effective way to do that but again you have to look at your particular use cases and so this is going to be an ongoing discussion probably for the next
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few years and I think people are are getting a little emotional about this in some instances because they they feel there's a there's an attachment to moving toward the trend in this case cloud computing and that's great to have
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those discussions I think it's just a viable architectural option that we're we're exercising here it's not a religious or hype driven thing uh we're making business decisions which I think is what Architects need to do uh people
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who are running it in corporations need to do so I think it's perfectly fine well that's going to do it don't forget to like And subscribe uh check out my book check out my blog um check out the other videos here because I'm
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looking forward to having more discussions with you about cloud computing you guys take care
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