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Partner Content Cloud computing was supposed to save money. Instead, it's become one of the largest and hardest line items to govern in the IT budget.
As enterprises rushed to modernize with public cloud platforms, they bought into a seductive promise: on-demand scale, lower capital costs, and reduced operational overhead. But reality is catching up fast. Hidden fees, data egress charges, and overprovisioned resources have turned cloud bills into financial puzzles and unpredictability that even CFOs struggle to decode.
Public cloud providers built their business models on a simple promise: pay only for what you use, when you use it. For many applications, this model delivers genuine value. Startups can launch global services without massive upfront infrastructure investments. Seasonal businesses and applications with unpredictable uses can scale computing resources to match demand patterns.
But the use of public cloud in large enterprises has proven to be more complex. Many business applications require consistent, predictable resources rather than elastic scaling. For these steady-state workloads, the cloud's pay-as-you-go pricing often costs more than traditional infrastructure ownership.
According to the recently released Private Cloud Outlook 2025 survey of 1,800 IT leaders, 94 percent of enterprises believe some of their public cloud spend is wasted, and nearly half think that more than a quarter of it is. If any other line item on a company's balance sheet carried this kind of uncertainty, auditors would sound alarms.
What we're witnessing isn't only a cloud reset. It's a financial reckoning, a shift in how companies are reevaluating the real cost, control, and strategic fit of their cloud deployments. That shift increasingly favors a revitalized private cloud model that was once dismissed as outdated.
Why the turnaround? Three reasons: security, spend control, private cloud evolution
First, security remains the top reason enterprises are pulling workloads out of the public cloud. While hyperscalers boast massive security investments, they can't match the granular data governance, sovereignty, and compliance control private infrastructure allows, especially when dealing with regulated industries or confidential AI training data. 51 percent of repatriated workloads are security-sensitive, according to the same survey.
Second, the public cloud's one-size-fits-all pricing model is under pressure. What was once flexible is now unpredictable. Overprovisioning, unused and unmonitored resources, reserved instances, spot pricing, hundreds of consumption meters, shadow IT, and tiered services have created a minefield of complexity. For CIOs, this unpredictability clashes with the rising demand for financial transparency, especially as generative AI workloads push infrastructure costs and data sovereignty into new territory.
Third, the private cloud isn't what it used to be. Modern private cloud platforms now offer the automation, self-service, and agility once exclusive to public cloud environments. Today's IT teams are building internal platforms with the same developer experience as hyperscalers, minus the vendor lock-in and cost overhang. And with better security controls.
Critics will argue this shift is just a swing of the pendulum. It's more than that. This is intentional. Enterprises aren't retreating from the public cloud, they're optimizing their cloud mix based on workload characteristics, risk profiles, and cost control. In that context, repatriation isn't regression, it's rebalancing.
This hybrid approach demands a rethink of how IT organizations are structured. Legacy silos among infrastructure, DevOps, and application teams must dissolve. Reskilling is essential.
But here's the bigger picture: the cloud reset should serve as a warning for every CEO, CFO, CIO and board. The unchecked optimism that led to public cloud-first mandates needs a course correction. It's time for cloud-fit strategies, backed by real FinOps discipline and clearer workload governance.
Enterprises have already learned the hard way that cloud isn't a destination, it's a capability. Like any capability, it must be measured, governed, and continually optimized.
The market isn't turning against the public cloud, it's demanding better discipline. Private cloud is no longer plan B. It's part of a smarter plan A.
Contributed by Broadcom.
