It’s often taken as read that the scalability, versatility, and accessibility that the cloud offers is applicable to everyone.

Pluralsight’s 2023 State of Cloud report found that 70 percent of organizations have the majority of their infrastructure in the cloud. And that’s not just one cloud; IBM’s consultancy arm suggests that a multi-cloud approach “can generate up to 13 times greater benefits from cloud alone.”

With such market momentum and such potential benefits, organizations would be foolish not to commit to the cloud, right?

Well, not quite and not always. While the cloud can be a great solution to operational challenges, it’s not a cure-all. Indeed, it can ensnare many companies into what you might consider a deliberate trap.

Clouded judgement

Cloud services run on charging businesses for the actions they take, rather than them paying a regular fee to do whatever they like. That’s a double-edged sword; it helps organizations to run a lean business when they are in control but leaves them vulnerable to unexpected costs too.

IBM cloud bills are set to increase by 26 percent from January 2024, and Salesforce made its first price hike in seven years, leaving organizations under pressure to foot the bill to crunch and store data that’s only going to keep growing. Added to that, contracts are usually for years so businesses are tied into solutions they can no longer afford.

Cloud providers will also try to prevent a move to competitors through the ‘committed spend discounts’ baked into their contracts. The way in which these reductions are structured will try and force organizations to stick with one provider. Taking on a more affordable platform for some applications could thereby make bills spike elsewhere, which doesn’t leave much room for improvement.

Once organizations are in that position, it’s difficult to fix. The FinOps Foundation has found that “getting engineers to take action on cost optimization” is the #1 challenge for teams looking to forecast cloud spend and reduce waste.

This isn’t helped by the fact that removing data from the cloud requires an egress fee – a payment required to take your own data out of the cloud, set at a deceptively innocuous rate that has led many a cloud project both large and small, global and regional to fail their overambitious business-cases.

Providers that originally promised to make things cheaper, simpler, and faster are no longer delivering on that vow.

By deliberately trapping them, I mean being financially locked out of the benefits of the cloud without a meaningful way to level the playing field. It’s expensive to use, more expensive to leave, and there is punishment for considering alternatives. The announced antitrust investigation by the Competition and Markets Authority (CMA) and Ofcom is welcome.

The price of paradox

To tackle this imbalance, many are increasingly looking to a ‘cloud economist’ – a specialist brought on to develop more streamlined, efficient, and cost-effective processes for cloud technologies, from usage to data purchase. With the large cloud service providers developing trading mechanisms for cheap “spot” capacity, the ever-increasing complexity of cloud engineering and management continues to increase and with it, the demands for skilled and trained engineers to manage the problem.

It’s unlikely that a cloud economist will operate alone. To cover the number of environments across a business, the complexity of integrating with existing systems, and the need to educate departments across the organization, it's likely an entire team. Again, organizations are committing to spending even more money on fixing a system that’s already too complicated and too expensive.

Is there value for money on that investment? Therein lies the paradox of the cloud economist: the more successful they are, the less they’re needed.

A cloud economist’s work is entirely dependent on the cloud remaining a problem. If a cloud strategy is running smoothly and affordably, then an organization doesn’t need an economist. But if the cloud isn’t a good fit, there’s a constant need for someone – or a team – to mitigate the pain.

There has to come a point at which spiraling complexity is abandoned in favor of simplicity. You wouldn’t commit to a constant battle with mission-critical systems in other departments – so why, rather than wrestling the cloud, do more organizations not walk away from it? Thankfully, the signs of change are here.

The case for repatriation

Repatriation is another word for reverse migration – the removal of assets and processes out of the cloud and relocating them elsewhere.

Despite the cloud’s hegemony, over half (55 percent) of IT decision-makers in UK businesses told us it was likely they will move away from public cloud in the next 12 months. They are most discouraged from cloud hyperscalers due to cost (56 percent), vendor lock-in (32 percent), and latency (32 percent). IDC backs this up, finding 70 to 80 percent of companies [are] repatriating at least some data back from the public cloud each year.

At Pulsant, we’ve experienced that move first-hand with customers like LinkPool – a chainlink node service provider that originally developed much of its tech stack within the environment based on their hyperscaler provider. Due to latency challenges and increasing costs, as they scaled their offering out of development and into production, they decided to move away from the cloud and towards an Edge computing infrastructure instead.

As a result, maintaining and using their tech stack became simpler, they reduced memory, CPU and disk costs by 85 percent, and the speed inherent in Edge networks increased performance. Despite having developed almost entirely within the cloud, repatriation was a step that accelerated their business.

That’s not to say that the cloud can’t be a genuine game-changer for the right applications, in the right company. Its capacity to open up access to data, and to liberate employees from the office, is immense – and it’s a sound introduction to business processes for many SMEs.

None of that, however, makes the cloud a panacea. Repatriation could be a simpler, cheaper, faster means of running an organization – and solve the paradox of the cloud economist as part of the bargain.