AWS’s announcement came during a hearing by the British antitrust authorities, which is closely examining the state of competition in the cloud market. Of course, we cannot rule out the possibility that other motivations were at work in AWS’s position. This may be to avoid being singled out as a monopoly company. In Europe, concerns are being raised that public cloud service providers may have too much control, but as AWS says, if the alternative to the core solution a company is using is an existing on-premise solution, it is not a monopoly situation. Currently, there is no public cloud service provider in the market comparable to AWS.
Complex cloud market
This is not just a problem for AWS, but must be analyzed and understood as a problem in the broader cloud market. AWS, like other public cloud service providers, is reviewing market dynamics for 2025 and developing strategies to best grow its cloud business.
The current trend is moving away from the “cloud or nothing” approach. All platforms, including on-premises and public cloud, are sound architectural options. It took 10 years for many people to understand this.
The cloud market is inherently complex, and cloud service providers often emphasize the cost-effectiveness and innovative features of their solutions. Nonetheless, cloud service providers have denied claims that their practices create technical barriers or impose unfair financial burdens on customers, such as egress fees or contract cost discounts. They argue that the cloud services market is performing well and meeting the needs of customers in the UK and around the world on price, innovation and quality of service.
Despite AWS’s confidence in the fairness of competition in the cloud market, criticism has been raised over claims that competition from on-premises migration is severe. But in reality, on-premises and private cloud solutions more reliably ensure companies’ data sovereignty, an increasingly important consideration in today’s data-driven environment.
Issues to consider
The reemergence of on-premise solutions as a competitive option stems from several factors influencing enterprise IT strategies.
Cost management. Cloud solutions are promoted as cost-effective through a pay-as-you-go model, but this may not be the case in reality. Over time, the cumulative cost of cloud services is often higher than that of on-premises systems. This is especially true for stable workloads that do not take advantage of the elasticity of the cloud. For businesses looking for predictable costs and long-term cost savings, switching to or maintaining on-premises infrastructure may be a more worthwhile option.
Cheap hardware. It’s really cheap. I have pointed out this fact more than 100 times. In other words, the standard for cost, which is a strong reason to utilize public cloud, has changed. Over the past decade, storage costs have fallen at a 45-degree angle, and many companies are planning cloud repatriation projects to take advantage of this. I have also worked on dozens of projects.
Data security and sovereignty. Many companies are concerned about regulations such as GDPR. On-premise systems give businesses greater control over their data, reducing the risk of breaches and ensuring compliance with local data protection regulations.
Performance and Control. Some applications require high performance and low latency, especially in industries such as finance or gaming. These systems benefit from the proximity and control of on-premises infrastructure, while allowing for fine-tuning and optimization that public cloud does not provide.
Customization and flexibility. On-premise systems allow for more customization. Companies that require specific infrastructure can configure it to suit their needs more precisely with an on-premise system than with a general cloud service.
Technological advancement. Recent on-premise technology innovations, such as hyperconverged infrastructure and enhanced virtualization capabilities, are making setting up and managing on-premise data centers more efficient.
Hybrid and multicloud strategies. Many companies are using a combination of on-premise and cloud resources to optimize their IT environment. This approach provides the best of both worlds: on-premises for reliable, predictable workloads and the cloud for scalable, dynamic requirements.
Complaints about suppliers. Enterprises are dissatisfied with major cloud service providers due to service outages, egress fees, and lack of transparency about pricing and service level commitments. Companies are rethinking their dependence on the cloud and looking for on-premise alternatives.
new way of thinking
The IT world is moving towards heterogeneity and ubiquity, which means that no one approach, whether in the cloud or on-premises, can be the single “standard.” If you’re prepared to deal with the complexities this will bring, I think that’s a good thing. Until now, many companies were hesitant about this issue.
While in the past this issue wasn’t talked about at cloud conferences or even in polite company, these conversations are now happening frequently. In fact, the concepts of multicloud and optimization, which only a few years ago were left out of the slides by presenters, are once again becoming topics of conversation at high-profile events.
This new discussion paints a nuanced picture of enterprise IT strategy, where flexibility and adaptability are paramount. Businesses are becoming increasingly discerning, comparing the superiority of cloud computing with the tangible benefits of maintaining or returning to on-premise solutions. This dynamic environment marks a transformational period for the IT industry, and cloud service providers must continue to innovate and meet customer expectations to maintain a competitive advantage. Let’s see what happens in 2025.
editor@itworld.co.kr
Source: www.itworld.co.kr
