Business leaders situate their technology needs – particularly those related to data – along a spectrum of provision. On the far left of this spectrum is owned, on-premise data centers. We then track right, through colocation options, before businesses explore private and public cloud capabilities.

The well-documented ‘public cloud exodus’ has been businesses repatriating technology to situate their projects on this spectrum, better. New Pulsant research has revealed that 87 percent of businesses plan to move away partially, or fully, from the public cloud over the next two years.

That compares to the Barclays' 2021 survey that showed 43 percent planned such a shift. The exodus has become the evolution of an entire market.

What has driven such huge change?

The natural selection of digital infrastructure

The first signs were the experiences of public cloud early adopters. As these innovators reeled from the ‘bill shock’ of growing cloud costs, data egress became the tipping point.

When getting data out of the cloud incurred significant, unpredictable charges, the sting across the industry was palpable. Technology leaders quickly asked if long-term plans were better served outside of the public cloud.

Then these assessments went beyond purely financial aspects. Businesses came to the repatriation party for the secure predictable pricing. But they stayed for the better performance and lower latency from being closer to users.

They also secured more control and built greater resilience, by diversifying the infrastructure providers on which their businesses sit. Then came AI and compliance.

The impact of AI

In our research, over three-quarters (78 percent) of businesses put AI in the top three impacts upon data strategy. Understanding that change is vital.

There is nine times more private data than public. So, organisations now realise they are sitting on untapped information that could drastically increase the return on AI projects.

Achieving full ownership of data by repatriating, means greater control, cost efficiency and customisation.

For example, Co-Pilot and ChatGPT are not sovereign or private, but by using colocation and private digital infrastructure to build LLMs, businesses can still protect their IP and benefit from innovative technologies. To put it simply, when it comes to AI, businesses want to own the land they build on.

And there are further considerations. The intersection of energy and supply chain costs have caused AI workloads in the public cloud to become more expensive. At the same time, hardware has become a commodity.

The simultaneous cloud price increase and hardware cost reduction has made private cloud, colocation and on-premise solutions more cost-efficient.

But whilst artificial intelligence dominates the boardroom agenda, it is not the only topic of discussion.

The compliance dimension

55 percent of respondents to our survey ranked data sovereignty or residency concerns in the top three changes to their organisation’s data strategy.

Regulatory pressures have crystallised around concerns over reliance on a small number of US-based cloud providers.

With some hyperscalers openly admitting that they cannot guarantee data stays within a jurisdiction during transfer, other types of infrastructure make it easier to maintain compliance with UK and EU regulations. This is a clear strategy to avoid future financial and reputational damage.

A re-defining moment for data strategy

2025 is a pivotal year for digital infrastructure. Public cloud will remain an essential part of the IT landscape. But the future of data strategy lies in making informed, strategic decisions, leveraging the right mix of infrastructure solutions for specific workloads and business needs.

As part of our research, we assessed the shape of this hybrid market. Of the businesses looking to migrate away from public cloud:

• 54 percent are assessing private cloud alternatives to lead their blended solution
• 38 percent are investigating the option of their own data centers taking center stage
• 36 percent are looking into colocation as the basis of their hybrid approach

These figures show that awareness of the viable alternatives to public cloud is growing.

With one eye to the future, UK-based cloud providers must be positioned as a strategic advantage, offering benefits such as data sovereignty, regulatory compliance, and reduced latency.

Businesses will need to situate themselves ever more precisely on the spectrum of digital infrastructure. Their location will reflect how they embrace a hybrid model that balances public cloud, private cloud, colocation and on-premise options. This approach will not only optimise performance and costs but also provide long-term resilience in an evolving digital economy.