As many as 97 percent of the UK's mid-market companies are planning to move some workloads out of the public cloud in the next year, new research suggests.

As reported by Computing, the research, commissioned by managed services provider Node4, has found that many enterprises with between 500-5,000 employees are opting to repatriate some data and workloads.

The scale of reported repatriation is broad - with around 49 percent looking at moving just a few applications, and five percent planning a total public cloud exit.

According to the report, the sectors looking to move large amounts of workloads out of the public cloud are manufacturing, and private healthcare organizations.

The Node4 report found that the main reason behind this move towards a hybrid-cloud approach is that customers have found some workloads to be ill-suited to the cloud and underperforming, while a second concern was that of data sovereignty, an issue that is becoming increasingly dominant in the UK and wider Europe.

Other concerns leading to repatriation were risk management, technical limitations, cost optimization, compliance, and security.

Data sovereignty, while a point of contention for years, has moved to the forefront due to a variety of geopolitical tensions, including the uncertainty created by President Donald Trump's tariff strategy.

The past few months alone have seen more than 100 organizations sign an open letter to European officials calling for the continent to become “more technologically independent” and saying the current reliance on hyperscalers creates “security and reliability risks.”

European groups have other concerns related to data sovereignty, ranging from the potential for the Trump administration to use reliance on US tech companies - such as Google, Amazon Web Services, Microsoft, and others - as leverage for trade talks, to the White House's attacks on NATO, and even threats to invade Greenland.

As a result, US cloud companies, including Microsoft, Google, and Amazon Web Services, have made announcements in the last month aiming to abate some of that anxiety, with the latter even launching a separate EU entity.

Commenting in the report, Node4 CEO Richard Mosely wrote: "Mid-market organisations are entering a new phase of cloud strategy - one defined by pragmatism, not dogma.

"Most still have a substantial footprint of on-premises infrastructure and applications running in the public cloud. This demonstrates a clear preference for hybrid environments and a shift from cloud-first to cloud-appropriate. We believe this will be the mid-market’s default setting for the foreseeable future.”

He added: "The UK mid-market is now hybrid, and we expect this to remain the case. Our findings show that organisations are optimising their hybrid assets while minimising their risk - moving from cloud-first to cloud-appropriate. They have stopped thinking in binary terms of in the cloud or on-premises and are undoing some of the issues they’ve created by not taking a flexible and dynamic approach."

One of the most high-profile cloud repatriation stories is that of 37signals, which has been exiting the cloud for several years now. In October 2024, 37signals estimated that it had saved $2m that year by exiting the cloud, and in May 2025, it began moving its data stored on AWS S3 to its data centers. CTO David Heinemeier Hansson estimates that it will save another $1.3 million annually by ditching its S3 hosting commitment.