Is the private cloud the answer to data sovereignty and AI concerns?

Cybernews insights from VMware Explore by Broadcom, where cloud repatriation and the growing shift towards private on-prem cloud took center stage.

IT departments used to have relatively simple concerns compared to the complexities they face today. Data was traditionally kept on-premises, and the biggest threat was BYOD (bring your device), where employers added smartphones, tablets, and other personal devices to the corporate network.

Departments frustrated by IT's two-year delay in delivering a new tech project famously turned to shadow IT, where Cloud services allowed them to add new services to the corporate network without asking IT's permission.

Fast-forward to 2024, and many businesses have moved their entire IT infrastructure to the cloud. But as AI tools become more accessible and employees integrate their new AI applications into their daily tasks without telling IT, business leaders are increasingly finding themselves battling BYOAI (Bring Your Own AI).

Add global conflict and concerns around data sovereignty to the mix, and an increasing number of businesses are considering switching from the public cloud to a private cloud on-premises.

We've seen a massive change in the conversations that I have with our customers from, we're all in with the cloud-first strategy and cloud everything, to public clouds are not what we thought it was going to be, and they haven't provided us with the panacea that we were hoping for.

Tamar Brooks, Managing Director, UK&I at Broadcom.

This change is primarily driven by cost, complexity, and compliance. However, there is also a desire to increase resilience and remove solos as leaders begin a new mission of regaining complete control of their data and infrastructure. VMware backed up this trend by referencing recent research from Barclays that suggests 83% are considering repatriating data to a private cloud.

At the recent VMware Explore event in Barcelona, Broadcom CEO Hock Tan told the audience, "We are serious people. We're here to help you run your business better. We're not here to show and sell you bright, shiny objects."

"The future of the enterprise is private. Datacenter silos slow innovation, and this is a challenge we have to fix," he added.

The elephant in the room was that a year had passed since Broadcom completed its $69bn acquisition of VMware, and some customers felt worse. European cloud providers have been saying Broadcom's pricing would push them out of business, but Broadcom feels this has largely been exaggerated and overblown by the press.

In his keynote in a section entitled "What We're Hearing From You," Tan went on the defensive when he told the audience, "Some of you work for companies that don't like to pay for the value of the technology we all love. Nonetheless, let's move on."

Broadcom CEO Hock Tan addresses the elephant in the room around risin costs from disgruntled customers at #VMwareExplore

undefinedSome of you work for companies that don't like to pay for the value of the technology we all love; nonetheless, let's move on.undefined pic.twitter.com/B28hi4W0J1

undefined Neil C. Hughes (@NeilCHughes) November 5, 2024

The cloud repatriation trend: hype or reality?

Tan went on to assert that the VMware Cloud Foundation (VCF) is the solution that offers enhanced resilience and security while also yielding cost reductions compared to public clouds.

He further addressed sovereignty, stating, "While hyperscalers discuss sovereignty, they frequently fail to provide it within your country. But we offer it with clouds comparable to public ones but located on-premise and improved through VCF."

The cloud repatriation movement was discussed at VMware Explore, where the company positioned its VMware Cloud Foundation (VCF) as a superior alternative to public clouds. The promised ROI is enhanced resilience, security, and cost savings.

But the jury is still out on whether the trend is being exaggerated to fit the narrative of VMware Explore.

The case for cloud repatriation

Cloud repatriation involves moving services, applications, or data from public clouds back to private on-prem solutions. The biggest drivers are securing greater control over corporate data and increasing dissatisfaction with the rising costs associated with public cloud services like AWS or Azure.

Anecdotal evidence and research suggest a growing number of businesses are considering this move to secure more predictable costs and bolster data sovereignty. AWS has already stated that it's the biggest threat to its business model.

The call for digital sovereignty and the need for storing and processing data within a country's borders is becoming louder. By claiming to meet these needs more effectively through its on-premise solutions like VCF, VMware presents a strong case for cloud repatriation.

Despite these claims, there's skepticism about the scale of repatriation. Critics argue that the narrative may be exaggerated to bolster VMware's positioning against competitors. Although AWS has acknowledged cloud repatriation as a potential business risk, it has downplayed its impact, suggesting that the movement might not be as widespread as its competitors claim.

Looking ahead

The future of cloud computing is more likely to be a hybrid one. Rather than a binary choice, enterprises need to find a better balance between on-premise and public clouds to manage to help them manage AI development, data security, and cost efficiencies.

My conversation with Chris Wolf, Global Head of AI and Advanced Services, VMware Cloud Foundation Division, Broadcom, seems to confirm this trend.

"My expectation is you're going to see hybrid AI solutions where I might use the hyperscaler in a public cloud for some experimentation research, but then I'm going to deploy at my business location out of the edge or in a data center where I get the control and cost benefits of operating the service myself," Wolf said.

As the industry evolves, monitoring adoption rates and the long-term viability of repatriated infrastructures will be crucial. It's too early to predict how this will evolve, but make no mistake, we already have a new set of business buzzwords set to dominate 2025. So, expect to be reading much more about cloud repatriation, data sovereignty, and BYOAI in the months ahead.