Is the Cloud Sliding into the Valley of Disillusionment?

“The Future of the enterprise is private”: This was announced by none other than Broadcom CEO Hock Tan in a blog post. Broadcom, in particular, has so far tried to push the many VMware customers into the cloud with a very aggressive pricing policy. Now it seems they want to stop doing that. Virtualization on-premises – and with it, to some extent, a return to the private cloud – is back in fashion. This change at Broadcom was triggered by customer feedback, which makes it particularly interesting.

Technology users want to master the three Cs: complexity, costs and control. Every solution scenario must face this – in particular, this also applies to cloud offerings. If the dependency on a proprietary product offering is significantly greater than with an open source product anyway, this applies even more to a cloud offering. 

Complexity

Especially if the corresponding offers do not follow open standards, which is usually the case, the portability of solutions is difficult. As a result, hyperscalers increasingly see themselves as “Platform as a Service” providers rather than as “Infrastructure as a Service” providers. Those who succumb to the lure of technically sophisticated components are left at the mercy of the provider’s pricing model. More and more companies are realizing this and are therefore opting for greater sovereignty.

Costs

Cloud infrastructures are becoming increasingly complex, and anyone who has seen how the costs of containerization and “clustering” skyrocket increasingly wants simpler virtualization. In critical applications, such as security solutions, hardware is still in demand. 

Control

The strongest argument, however, is probably “control”. It combines costs and complexity and adds another important aspect. Dependency and control are mutually exclusive. Every organization using technology must retain at least as much control as it takes responsibility for security and availability. If it also wants to use its freedom of action, it needs independence. 

The challenge for IT managers is increasingly to find the balance between using self-made solutions and ready-made services. While there has been a clear trend towards the latter in recent years, we are now seeing the first indicators that this trend is weakening. Above all, moving everything into clouds does not appear to be a solution.

Perspectives

Surprisingly, the rapidly growing Artificial Intelligence (AI) sector shows how it can be done without clouds. More and more companies and organizations are asking themselves whether they really need the large language model and whether its use justifies the associated data drain. This may not be critical in an advertising agency, but in security-relevant industries, data sovereignty is more and more becoming an issue.

As a result, there is growing demand in the military sector, for example, for mobile AI solutions that require significantly fewer resources. AI on edge devices is not the solution for everything, but it often can be. Private clouds are also a good alternative to ChatGPT & Co. On-premises is becoming an increasingly prominent topic even in the hyped area of AI, because data sovereignty and transparency play a special role there. The development of ever more efficient models is also contributing to the move out of the cloud. In addition to the aspects of cost, control and complexity, these models have another major advantage: they require significantly less energy. Perhaps a “green AI” will be the next hype.