
Cloud services giant AWS has acknowledged that it is facing stiff competition from on-premises infrastructure, a significant shift from its previous statement that all workloads would eventually move to the cloud.
In a filing with the UK’s Competition and Markets Authority (CMA), AWS denies that its customers are having difficulty migrating from its platform. To support its claim, the company provided examples of customers who are choosing to return to on-premises infrastructure.
In the CMA report, AWS stated: “Building a data centre requires considerable effort, so the fact that customers are willing to do this highlights the level of flexibility they have and the attractiveness of returning to on-premises infrastructure.”
Yes, you read that right – some customers are finding it more appealing to move their IT operations back to on-premises, despite the challenges involved, than to remain on AWS. Not exactly a ringing endorsement of the benefits of the cloud.
AWS also notes that customers may return to on-premises infrastructure for a number of reasons, including “reallocating financial resources, adjusting access to technology, and increasing control over their data, security, and assets.” Indeed, there is a growing trend of companies moving some or all of their workloads back from the cloud, in a move known as “cloud repatriation.” Cost is often cited as a key factor. One example discussed previously is 37Signals, the developer of Basecamp, which decided to return to on-premises infrastructure after receiving a $3.2 million bill for cloud hosting services. By the end of last year, the company had already saved $1 million. But does AWS really face strong competition from on-premises infrastructure in the UK, or is this simply a strategy to avoid tougher regulatory action? We asked the company how many of its customers have returned from the cloud. In response, AWS cited data indicating that of all UK organisations that switched cloud infrastructure providers, 29% switched to on-premises services. However, these figures include all cloud providers, without detailing how many specifically switched from AWS. Andrew Buss, senior research director for EMEA at IDC, told The Register that while cloud repatriation is becoming more common, “we still see a low single-digit percentage of companies actively repatriating workloads from the public cloud.” He added that organisations are more likely to migrate to another public cloud provider if their current one does not meet their needs. They have also become familiar with the cost savings of public cloud, which they can compare with the long-term costs of maintaining private infrastructure. A more notable trend in EMEA is that more than half of businesses still prefer to run their workloads on private IT infrastructure, according to Buss, while around 12% are prioritising the use of public cloud. Despite this, the IDC analyst noted the growing interest in standardized, off-the-shelf private cloud infrastructures, such as Azure Stack, AWS Outposts or VMware Cloud Foundation.
The latest report summarizes the CMA's hearing with AWS, as part of the investigation into the cloud services market in the UK, which seeks to understand whether the largest cloud providers are engaging in practices that limit customer choice.
In the document, AWS states that some customers choose to use only one cloud provider, such as AWS itself, due to the ease of operation and lower costs. In addition, the company admits that the training required to operate in a multi-cloud environment can represent an obstacle for many customers.
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News source: https://www.theregister.com/2024/09/17/aws_cma_investigation/