September 18, 2024 In a surprising turn of events, cloud giant Amazon Web Services (AWS) is now claiming that it faces stiff competition from on-premises infrastructure. This statement comes as part of AWS’s evidence to the UK’s Competition and Markets Authority (CMA), which is investigating the cloud services market.

AWS asserts that customers are finding it attractive to move their IT back on-premises, despite the significant effort involved. The company stated, “building a datacenter requires significant effort, so the fact that customers are doing it highlights the level of flexibility that they have and the attractiveness of moving back to on-premises.”

This claim represents a significant shift from AWS’s previous stance that all workloads would eventually move to the cloud. The company suggests that customers may switch back to on-premises for various reasons, including reallocating internal finances, adjusting technology access, and increasing ownership of resources, data, and security.

However, industry analysts paint a more nuanced picture. Andrew Buss from IDC estimates that only a single-digit percentage of companies are actively repatriating public cloud workloads. He notes that organizations are more likely to switch to another cloud provider if their current one isn’t meeting their needs.

While AWS’s claims may be an attempt to demonstrate market competitiveness to regulators, they also highlight the ongoing debate about the long-term costs and benefits of cloud versus on-premises infrastructure.

As the CMA continues its investigation into the UK cloud services market, the tech industry will be watching closely to see how these claims impact the regulator’s findings and potential remedies.