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Channel partners see customers uncloud: Reverse cloud migration strategy

Channel partners report that a small but increasing number of customers are moving some or all of their applications off the cloud.

Channel partners say some of their customers have begun to uncloud and are asking for help migrating back to in-house data centers or colocation facilities.

While cloud computing, in general, remains a high growth area, a counter trend of reverse migration has started to surface. Organizations, industry executives said, cite a number of reasons for moving some or all of their applications off the cloud: security and compliance concerns, frustration over elusive cost savings, and the changing data center economics of hyper-converged architecture.in

At Trace3 Inc., cost and hyper-convergence played key roles in one customer's off-the-cloud migration. Trace3, based in Irvine, Calif., focuses on data center, big data and cloud technologies. Mark Campbell, research principal and director of Innovation Research at Trace3, said a retail client recently completed a "back-sourcing" exercise in which it migrated its entire cloud footprint into a colocation data center, where the retailer could control the infrastructure.

"Cost was the primary driver," Campbell said of the retail customer. "They were estimating they could save 40% over their cloud IaaS [infrastructure as a service] and PaaS [platform as a service] provider by building their own private cloud built on hyper-converged and commodity infrastructure," he said.

Campbell noted that he hasn't had the opportunity to follow up with the company to see whether it actually realized the projected savings.

Getting off the cloud

Nevertheless, other Trace3 customers have taken steps to uncloud, a pattern Campbell began noticing last year. He said a few customers -- numbered in the dozens, out of a client base of some 2,000 companies -- have encountered issues in the cloud.

We are exiting the honeymoon stage, and that is always a rude awakening -- and expectation readjustment -- for both parties.
Paul DippellCE, Service Leadership

"The vast majority of our customers have moved at least some of their enterprise applications to the cloud, and the vast majority of those are continuing in the cloud," Campbell said. "There is a small minority, however, that are moving some or all of their applications back into their own data centers or colocation sites more under their control."

Irwin Teodoro, senior director of data center transformation at Datalink Corp., a data center services provider based in Eden Prairie, Minn., has also observed declouding among his company's customers. He said for every 10 companies pursuing some form of cloud computing, he has seen two or three looking to get out of the cloud.

"This is definitely a trend we are going to see more of."

The counter-cloud migration may signal a resetting of expectations among channel partner customers. Paul Dippell, CEO of Service Leadership Inc., a company based in Plano, Texas, that provides a financial and operational benchmark for channel companies, said cloud vendors tell customers that their offerings are "wonderful, weightless, agile, low cost, mobile [and] fantastically free of the impediments of past computing models."

But that vision doesn't always line up with reality.

"What the customers are experiencing is different enough that a material number of customers are declouding or significantly changing -- reducing -- their cloud strategies to regain a more solid computing foundation and rational cost," Dippell said.

"I don't expect cloud to fail, by any means, and I do expect it to grow," Dippell said. "But we are exiting the honeymoon stage, and that is always a rude awakening -- and expectation readjustment -- for both parties."

Dippell added that he's heard anecdotal accounts of solution providers winning new customers by agreeing to decloud them.

When customers uncloud: Top factors

A number of factors influence migration decisions. Unforeseen security issues, for example, may drive some applications back in-house. In general, risk and liability concerns are tempering enthusiasm for the cloud, said Dan Liutikas, managing attorney at InfoTech Law Advocates P.C., and chief legal officer and secretary at CompTIA.

Channel partners, as well as customers, are questioning whether cloud is the correct answer for every customer. While the cloud adoption wave continues, more and more service providers are weighing whether cloud is the right approach for a particular customer or a subset of customers, Liutikas said. The latter includes companies in highly regulated industries such as healthcare and financial services.

"Sometimes … on-premises is the better answer based on their customers' needs," he said.

Organizations may also struggle to achieve deep integration between their cloud applications and their on-premises legacy applications and data, according to industry executives. But beyond legal and technical hurdles, cost has become a sticking point for some cloud users.

Unexpected cloud costs may stem from a customer's failure to quantify all the necessary services in its initial calculations. Campbell said most customers tend to be accurate in estimating traditional infrastructure and capacity costs for servers, storage capacity and bandwidth, among other components. But on the other hand, they tend to underestimate the cost of items beyond their data centers. Those items include the cost of creating multiple storage snapshots to back up data, the cost of data replication and the cost of restoring data.

"This leads to budgetary surprises," Campbell said.

Cloud sprawl can also stress budgets.

"Much like [virtual machine] sprawl, it is not uncommon for the initial targets of a cloud installation to grow as both the IT and business discover new applications, features and snap-of-the-fingers capacity bursts," Campbell explained. "These all add line items to the monthly bill."

In addition, cloud offerings may run afoul of conventional budget controls.

Campbell said traditional IT organizations built their financial processes and controls to monitor big-ticket items such as projects and large Capex purchases and smaller items such as consumables and onetime Opex expenditures handled on an approval basis.

"This works great in a data-center-centric operation, but imagine the befuddled expression on the comptroller's face when he gets his first 23,000-line-item bill from Amazon," Campbell said. "It is very hard to even decipher what these expenditures are for, let alone garner business justification."

Customers disappointed with cloud cost savings may end up migrating applications to hyper-converged infrastructures.

"Some [companies] are pulling in applications from the cloud to their data centers," Campbell said. "If they do that, we are seeing hyper-convergence as being one of those enabling mechanisms."

In addition to cost, corporate culture can play a role in a cloud reversal.

"Executives who are not fully aware of the concepts of the cloud feel somewhat apprehensive that data is somewhere else and feel lack of control," Teodoro said.

Managing the declouding challenge

Assisting customers as they back out of the cloud can prove difficult. Teodoro said public clouds in which multiple customers share a common infrastructure represent the greatest challenge. Dealing with maintenance windows is one issue. A customer can't just extract an application based on its own ad hoc maintenance timetable; they have to wait for the cloud provider's scheduled downtime.

"You can't move when you want to move," Teodoro said. "You've got to move at somebody else's pace and schedule."

Determining a cloud-based application's dependencies with respect to the cloud provider's infrastructure is another consideration. A channel partner working on a reverse cloud migration project needs to figure out what virtual machines the application resides on and identify the virtual LANs and subnets in the compute infrastructure to which the application can be traced, Teodoro explained. The goal: extract the application without breaking something in the environment.

"The keys for us are really to understand the dependencies in the environment -- down to the infrastructure -- and find ways to carve out the environment into smaller chunks or workgroups," Teodoro said.

Another complication: Migration tools can help channel companies uncloud customers, automating the tasks of data gathering, analysis and forensics. But in a shared, multi-tenant cloud, service providers can't use their own tools, since they could impact a cloud provider's other clients, Teodoro said.

Seeking a happy balance

Customers juggling multiple IT environments provide yet another degree of difficulty. Jim Piazza, vice president of service management at CenturyLink Inc., which offers colocation, public cloud and IT services, said customers such as software as a service providers may offer multiple versions of their software to support different clients. And those different versions may be hosted on different computing platforms: in-house private clouds, colocation centers and public clouds, for example.

"It's an interesting mix … that is really quite a challenge to manage," Piazza said.

Piazza said CenturyLink, based in Monroe, La., provides customers a service catalog to help them keep track of what version of their software is deployed where. In addition, the company has built interconnects between customers' colocation footprints in CenturyLink facilities and CenturyLink's public cloud. The service catalog and interconnects enable the company's clients to move their end customers from one platform to another, Piazza said.

Piazza likened migrating customers and their workloads among the various platforms to supporting a 3D jigsaw puzzle.

For Campbell, the cloud conundrum boils down to harmonizing the computing platforms now available to customers.

"It's finding that happy balance -- what lives best in the cloud and what lives best in-house."

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