Is Cloud Repatriation Right for Your Organization?

by | Apr 3, 2023

There’s a lot of cloud talk in the world of managed file transfer these days. Should MFT administrative controls sit in the cloud? How can an MFT dashboard be configured to keep it protected when it is cloud-facing? Where should my web application firewall be positioned to help protect REST APIs from authentication attacks? Everyone who runs managed file transfer software should be aware of how to configure their chosen products safely—and they should reach out to their chosen vendor to confirm their configuration’s security if there are any questions.

Cloud security is one of the many issues that has come up in recent weeks as organizations question their current cloud strategies. Another is the cost of doing business in the cloud. As they reassess their current usage, a lot of organizations are questioning whether staying the course on cloud is the right business decision, or if they should “repatriate” their data centers and withdraw from public cloud infrastructure. One SaaS firm did the math and decided it could save millions by reversing course on the cloud and building an on-premises data center.

Financial Malpractice

Is it time to hit the “undo” button on your cloud strategy?

In a recent article in The Register, 37Signals CTO David Heinemeier Hansson explained that, amortized over five years, a $600K investment in new servers that it owns and operates will save the company $7M in costs it could expect to pay to its current cloud infrastructure and services provider.

“Any mid-sized SaaS business and above with stable workloads that does not benchmark their rental bill for servers in the cloud against buying their own boxes is committing financial malpractice at this point,” Heinemeier Hansson told El Reg.

The cloud repatriation trend was recently covered by technology trade site TechCrunch as well. Describing the rush by many startups to build cloud-first infrastructure to save costs and manage venture capital, cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud all benefited. But a decade later, “Cloud-first strategies may be hitting the limits of their efficacy, and in many cases, ROIs are diminishing, triggering a major cloud backlash.”

Changing Metrics

It seems that, for many enthusiastic cloud-first organizations, cloud cost metrics changed substantially over time as more services, capabilities, and workloads were added to the mix, and as data volumes grew. “The sheer quantity of workloads in the cloud is causing cloud expenses to skyrocket,” TechCrunch reported. “Enterprises are now running core compute workloads and massive storage volumes in the cloud — not to mention ML, AI and deep learning programs that require dozens or even hundreds of GPUs and terabytes or even petabytes of data.”

According to Blocks & Files, a 2022 Dell Technologies survey found that “96% of 139 IT decision makers who repatriated workloads or applications cited cost efficiency as the top benefit of their efforts, while 95% said their security posture improved as a result of the move. And 85% cited business agility as a benefit.”

Do Your Homework

This news would seem to be a death knell for cloud services providers. After all, if I can’t save money with a cloud-first strategy, and if my data are going to be more secure on-premises, why would I ever consider the cloud? The key is in the words of Heinemeier Hansson, who cautioned his peers to benchmark their rental bill. In other words, you need to put some work in. Going cloud-first without conducting both short- and long-term cost/benefit analyses never made sense to begin with, and locking into contracts without considering what happens when an organization grows and resource demands exceed original pricing thresholds is bad planning.

The lessons of the last decade confirm that rushing headlong into the cloud is not wise. And it might only compound the problem for organizations who made a rash decision to repatriate. Instead, a thorough evaluation of current and projected needs is called for and, as many organizations are learning, a hybrid or multi-cloud approach to infrastructure management may make sense, allowing the enterprise to take advantage of the best available options.

And keep in mind that, no matter where your data is, Diplomat MFT can integrate with the associated systems and technologies to make sure your data transfers are managed simply, reliably, and securely. Contact us to learn more.