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Uptime Institute predicts slower pace of public cloud migrations in 2023

Datacentre resiliency think tank Uptime Institute claims cost pressures and unmet expectations around cloud benefits may lead some enterprises to pause or slow down their migration plans this year

The long-held view that moving to the public cloud is a low-risk, flexible and inexpensive alternative to on-premise IT will be increasingly challenged throughout 2023, prompting some enterprises with complex infrastructure needs to slow down or press pause on their migrations.

That’s one of the key predictions put forward by datacentre resiliency think tank Uptime Institute in its 2023 trends forecast, with the organisation citing the threat of economic and political turbulence over the coming years as having a destabilising impact on enterprise public cloud moves.

“More often than not, chief information officers responsible for mission-critical IT have seen a move to public cloud as low-risk, flexible, forward-looking and, ultimately, inexpensive. But these assumptions are now coming under pressure,” the Uptime Institute report stated.

“As the coming years threaten to be economically and politically turbulent, infrastructure and supply chains will be subject to disruption. Increasingly, government and stakeholder interest will force enterprises to scrutinise the financial and other risks of moving on-premises applications to the public cloud.”

Some of this scrutiny is the result of high-profile outages that have taken scores of companies offline for prolonged periods and because enterprises have sometimes under-estimated how costly rebuilding their applications to run in the cloud will be.

“More effort, and more investment, may be required to ensure that resiliency is both maintained and is clearly evident to its customers. While cloud has, in the past, been viewed as a low-risk option, the balance of uncertainty is changing – as are the cost equations,” the report added.

As mentioned elsewhere in the report, “successful and fully functional cloud migrations” often carry additional, “substantial” costs relating to re-architecting applications to make them cloud-native and ongoing consumption charges generated by running workloads across multiple availability zones for resiliency reasons.

“It is clear that the cost of the cloud has not always been factored in: a major reason for organisations moving their workloads back on-premises from the public cloud being cost,” the reported continued.

There are already signs this trend is playing out, with the report pointing to the relatively downbeat set of financial results and annual growth figures posted by public cloud giants Amazon Web Services (AWS) and Microsoft in recent months.

As previously reported by Computer Weekly, AWS recorded its weakest revenue growth rate to date for the three months to 30 September 2022, with the firm attributing its performance to customers looking to cut costs due to rising energy prices and inflation. 

“Even if CIOs continue to exert pressure for a move to the cloud, this will be muted by the need to justify the expense of migration. Despite allowing for a reduction in on-premises IT and datacentre footprints, many organisations do not have the leeway to handle the unexpected costs required to make cloud applications more resilient or performant,” it stated.

“Poor access to capital, together with tighter budgets, will force executives to think carefully about the need for full cloud migrations.”

That said, the report is quick to state that the slowing in the pace of cloud migrations should not be interpreted as a suggestion that the adoption of public cloud has “peaked” or there is no longer any “strategic value” in moving to the cloud for enterprises.

“Use of the public cloud is still growing dramatically and is still driving growth in the datacentre industry. Public cloud will continue to be the near-automatic choice for most new applications, but organisations with complex, critical and hybrid requirements are likely to slow down or pause their migrations from on-premises infrastructure to the cloud,” it added.

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