David Heinemeier Hansson, co-owner and chief technology officer of software firm 37signals, made a bold move that saved his company over $1 million by leaving the cloud. This decision was driven by the staggering costs associated with cloud services, which amounted to $3.2 million in 2022 for 37signals.
Hansson realized that the cloud was not providing the cost savings and productivity gains that were promised. He found that hosting hardware in a shared data center was a more cost-effective solution, costing only $840,000 per year. Additionally, concerns about the resilience and control of the cloud infrastructure pushed him to make the switch.
The trend of repatriating workloads from the cloud is not unique to 37signals. Many companies are finding that security concerns, unexpected costs, performance issues, and service downtime are driving them to bring their data back in-house. Companies like Plitch and LinkPool have successfully transitioned to private data centers, saving significant costs in the process.
Mark Turner, chief commercial officer at Pulsant, helps companies migrate from the cloud to colocation data centers, offering a secure and cost-effective alternative. He believes that there is a place for both cloud and physical infrastructure in the IT landscape, and that companies should consider their specific needs when deciding where to host their data.
While some companies, like Expedia, continue to rely heavily on the cloud for their operations, others are finding that bringing workloads back in-house can lead to significant cost savings and greater control over their infrastructure. As the IT industry evolves, the focus is shifting from a “cloud-first” mentality to a more nuanced approach that considers the specific needs of each organization.
