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Over the last several years, North America in particular, has been taken by the low barrier to entry, low monthly cost, and low maintenance of the Cloud. Neuralytix estimates that exabytes of data has emigrated into the Cloud as a result of the trend towards leveraging the benefits of the Cloud.

However, this exodus has led to a major problem. After enduring a lifecycle of datacenter refresh, the cumulative cost of the Cloud is starting to show that long term use of the Cloud is not as economical as first thought. Dell commissioned a report that showed that over five years, the total cost of ownership (TCO) of owning and operating an on-premise private cloud is up to 63% lower in cost than the use of a leading public cloud option.

Neuralytix’s own estimates show that compared to Amazon Web Services (AWS) Simple Storage Solution (S3), the total cost of ownership between owning and maintaining 1PB of storage (traditional magnetic hard disk drives [HDDs]) versus S3, results in a roughly 20% savings over five years[1]. Our estimates are based on high-end, premium storage system. If equated against a software defined storage solution, the savings exceed 65% over the same time period.

The result is a new phenomenon called cloud repatriation. Simply put, this means that organizations are migrating (or repatriating) their data and applications back to private cloud, or on-premise solutions.

At the outset, we mentioned that this is more prevalent in North America. We also believe that the Australian/New Zealand (ANZ) region has also “cloudified” too quickly, although not to the extent of North America.

Luckily for other regions around the world, reticence towards the Cloud has tempered the migration of data and applications into the Cloud.

All this being said, it is necessary to understand that the Cloud is not bad. This is a question of balance and appropriateness. As the old adage goes, all things in moderation!

This is good news for infrastructure vendors – particularly software-defined datacenter (SDDC) vendors, or those offering SDDC solutions (i.e. marketing or technical partnerships that define reference architectures). It is even better for those SDDC solutions that can burst into the Cloud or those that can create a hybrid cloud between public and private offerings.

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[1] Neuralytix estimates show that 1PB of AWS S3 costs roughly $25,000 per month for 1PB. We also estimate that the TCO of 1PB of owning and maintaining 1PB of HDDs is equivalent to $1,200/TB over 5 years.