While there are scenarios where public cloud is much less expensive than data centers, there are times when it’s much more expensive. Is repatriation a viable way to manage cloud costs?
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Repatriation results in one-third to one-half the cost of running equivalent workloads in the cloud
You’re crazy if you don’t start in the cloud; you’re crazy if you stay on it.
infrastructure spend should be a first-class metric
THE CASE FOR REPATRIATION
- Cloud costs are a large % of Cost of Sales (often times 50-80%)
- Cloud providers operate on large margins (e.g. AWS at 30%)
- Repatriation could reduce costs 30-50% of existing cloud spend
THE REALITIES OF REPATRIATION
- The case in the article is primarily based on 25-40x valuation multiples for software companies. While every companies believes they are a software company today, not every company is getting 25-40x revenue multiple from the market.
- All repatriation calculations begin with, “if you run a highly efficient data center”
- All repatriation calculations next involve, “assuming you have the talent to run a cloud”
- Repatriation is technical debt. How does your company typically handle that?
- Less than 100% repatriation creates multiple operational models (ops, billing, security, etc.)
- Most companies use a subset of the features in any given cloud.
- Can you create a financial situation in your data center that’s similar to the cloud?
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