Cloud repatriation is rapidly emerging as a defining trend in enterprise IT strategy, as organisations reassess the true cost, performance and risk profile of large overseas public cloud for certain workloads. While cloud adoption once promised lower costs and greater agility, a growing number of New Zealand businesses are reassessing and, in some cases, moving workloads back to on-premises or hybrid infrastructure to regain control and predictability.
This strategic shift reflects a more mature view of cloud computing — one where cloud is no longer treated as a default solution, but as one component within a broader, best-fit IT architecture.
Cloud Repatriation on the Rise
Industry research highlights the scale and momentum behind cloud repatriation:
94% of IT leaders report moving at least some workloads back on-premises, citing unmet expectations, security concerns and rising costs.
83% of enterprise CIOs plan to repatriate workloads in 2024, up sharply from 43% in 2020 — a clear signal of changing cloud economics.
According to industry surveys around 40% of US organisations have already moved, or are considering moving, at least half of their workloads back in-house.
Many IT professionals (around two-thirds in recent surveys) report repatriating one or more services after public cloud solutions failed to meet operational expectations.
A substantial portion of organisations report performance and operational control among leading reasons for repatriation.
Rather than signalling a retreat from cloud altogether, these figures point to a shift towards hybrid and private cloud models that balance flexibility with cost and control.
Why Businesses Are Moving Workloads Back On-Premises
1. Rising and Unpredictable Cloud Costs
One of the most significant drivers of cloud repatriation is cost. While cloud platforms offer low barriers to entry, expenses often escalate as workloads scale. Data egress fees, storage growth, licensing models and always-on compute resources can quickly erode the cost advantages originally anticipated.
For many organisations, predictable on-premises infrastructure costs now compare favourably against fluctuating cloud bills.
2. Performance and Latency Constraints
Mission-critical applications — particularly those requiring real-time processing or low-latency access — do not always perform optimally in shared, multi-tenant cloud environments. Dedicated on-premises infrastructure allows organisations to fine-tune performance, eliminate network latency issues and ensure consistent service delivery.
3. Data Sovereignty and Regulatory Compliance
Increasing regulatory pressure, including frameworks such as GDPR, has heightened the importance of data location and sovereignty. For organisations operating in regulated industries, maintaining sensitive data within defined geographic or jurisdictional boundaries is often simpler and more transparent with on-premises or private infrastructure.
4. Security and Operational Control
While public cloud providers invest heavily in security, many organisations remain uncomfortable placing their most sensitive data outside their direct control. Repatriation allows businesses to maintain physical ownership of systems, apply bespoke security controls and reduce exposure to shared-responsibility risks.
A Shift Towards Hybrid IT, Not Cloud Abandonment
Importantly, cloud repatriation does not represent a wholesale rejection of cloud computing. Instead, organisations are adopting hybrid IT strategies, combining public cloud, private cloud and on-premises infrastructure based on workload suitability.
This approach enables businesses to:
Keep variable or customer-facing workloads in the cloud
Retain predictable, high-performance or sensitive systems on-premises
Optimise costs without compromising agility or compliance
What This Means for Businesses
As cloud strategies mature, organisations are increasingly focused on right-sizing infrastructure decisions rather than following blanket cloud-first mandates. Successful IT strategies now prioritise workload alignment, cost transparency and long-term sustainability.
For businesses navigating this shift, expert guidance is essential to assess which workloads belong where — and how to design infrastructure that supports growth without unexpected cost or risk.
The Bottom Line
Cloud repatriation is not a step backwards, but a sign of smarter, more deliberate IT decision-making. By re-evaluating cloud investments and embracing hybrid models, organisations can achieve greater control, improved performance and more predictable costs — all while remaining agile in a rapidly evolving digital landscape.
