Cloud Repatriation: Why Some CIOs Are Bringing Workloads Back On-Premises | InformationWeek

For nearly two decades, organizations have steadily migrated workloads to the cloud, often adopting cloud-first or cloud-only strategies. While the trend has largely been one-way, a growing number are reconsidering, bringing some workloads and data back on-premises. Though, despite these instances of “repatriation,” many Chief Information Officers (CIOs) remain committed to cloud environments, arguing that, when properly managed, the cloud remains the optimal environment for modern applications – particularly those leveraging artificial intelligence.

A recent report from Flexera, an IT management software provider, found that 21% of 759 survey respondents had repatriated workloads and data, citing concerns around cost, security and reliability. The 2025 State of the Cloud Report highlights a complex landscape where cloud adoption continues, but isn’t without its challenges and occasional reversals.

A Gradual Approach to Cloud Migration

Josh Hamit, senior vice president and CIO at Altra Federal Credit Union, and a member of the ISACA Emerging Trends Working Group, hasn’t identified any workloads his organization regrets moving to the cloud. He attributes this to a deliberate, gradual migration strategy. “We still run many of our workloads within our in-house data centers and have gradually started to move and test more systems in the cloud,” Hamit explained. “Some of our critical workloads have not been ‘officially’ supported in the cloud or have not been proven out, so we’ve also had to wait on vendors to ensure their platforms can operate effectively in cloud providers like AWS or Azure.”

This cautious approach is echoed by others in the industry. Organizations are increasingly recognizing that a successful cloud strategy isn’t simply about moving everything; it’s about choosing the right workloads and ensuring they are properly configured and managed. The Flexera report indicates a growing focus on cost optimization, with 87% of organizations now using cost efficiency as a key metric for assessing cloud progress – a significant increase from 65% the previous year. Cost avoidance, achieved through proper license management, has also seen a substantial jump, rising from 28% to 64%.

The Importance of Experienced Partnerships

Hamit emphasizes the value of working with experienced partners during cloud migrations. “As we’ve leveraged more Microsoft cloud services… we have leaned on partners to help us ensure a solid architectural and secure foundation – for example, setting up Microsoft Purview for data classification and data loss prevention controls.” This highlights a growing trend of organizations seeking external expertise to navigate the complexities of cloud adoption and security.

The need for robust security measures is paramount. While the cloud itself offers inherent security benefits – particularly the scale and expertise of providers like Amazon Web Services (AWS) and Microsoft Azure – organizations are responsible for securing their own environments within the cloud. Sue Bergamo, a 25-year IT and cybersecurity leader now providing fractional CIO and CISO services through BTE Partners, points out that cloud security is no different than on-premises security in terms of fundamental principles. “You’ve got to have good architects who know how to set the environment up, whether it’s on-prem or in the cloud.”

Configuration and Scalability: Key to Cloud Success

Bergamo stresses the importance of proper configuration. “If you shortchange the server size and the CPU size, you’re going to have latency,” she explains. Similarly, failing to configure cost controls can lead to unexpected overage charges. However, she argues that these are issues of configuration, not inherent flaws in the cloud itself. “It’s the same concept with cloud, except it happens virtually.”

One of the primary benefits of the cloud is its scalability. The ability to quickly scale resources up or down based on demand is a key driver of cloud adoption. This scalability, combined with the rapid pace of innovation in cloud services, is why many CIOs remain firmly committed to the cloud. Hamit notes that “cloud is definitely something that is absolutely part of our technology and organizational strategy. That’s where the innovation is happening. We’re seeing a lot of capabilities that cloud is offering with direct tie-ins to AI and things that just are much more difficult to do in an on-prem environment.”

Multi-Cloud Strategies and Dominance

The Flexera report also sheds light on the evolving cloud landscape. While AWS and Microsoft Azure remain the dominant players, Azure is currently leading among enterprises, while AWS maintains its dominance among small and medium-sized businesses (SMBs). Squalio’s coverage of the report highlights that 70% of respondents embrace hybrid cloud strategies, utilizing at least one public and one private cloud. This indicates a move towards multi-cloud environments, where organizations leverage the strengths of different cloud providers.

The Cloud as an Expanding Environment

Bergamo views the cloud as a continually expanding environment with immense potential. “From my vantage point… I would move every workload to the cloud unless it was something seriously top secret. I love everything about the cloud: the enormity of it, the diversity of it, the architecture. It really is the largest data center in the world.”

The key takeaway from both CIOs is that the cloud, when implemented thoughtfully and with the right expertise, offers significant advantages in terms of innovation, scalability, and agility. While repatriation may be necessary in certain cases, the overall trend remains towards greater cloud adoption, particularly as organizations seek to leverage emerging technologies like AI.

Looking ahead, the focus will likely be on optimizing cloud costs, enhancing security, and developing the skills needed to manage increasingly complex cloud environments. The Flexera report suggests a continued emphasis on FinOps – a cloud financial management discipline – as organizations strive to maximize the value of their cloud investments. Further research and development will also be crucial in addressing the challenges of cloud repatriation and ensuring a smooth transition for workloads that are brought back on-premises.