When Flexera asked IT leaders to name the technology area where they think they are currently overspending, both “cloud infrastructure: IaaS” (28 percent) and “cloud services: PaaS” (26 percent) were among the top four answers. What’s more “AI is a brick on the gas pedal accelerating cloud spend,” they continued. Heading into 2025, 71 percent of IT leaders report that cloud costs are a heavy burden on their IT budgets, while more than two-thirds of IT decision makers (68 percent) say business units are procuring far more cloud and SaaS than IT teams know about. Even so, proponents of local resources argue that rekindled interest more often than not is because on-premises options simply make more sense in certain situations and for certain solution sets. This can be the case with the increasingly important areas of data management and backup, according to Larry O’Connor, founder and CEO of Other World Computing, a veteran provider of network infrastructure. “On-premises data storage and computing will become increasingly essential as companies prioritize security, performance and financial control,” O’Connor recently predicted. “With rising costs and growing vulnerabilities in the cloud, organizations and individual operators are increasingly moving back to on-prem solutions as the primary strategy for secure data management.” At one time nearly given away, the cost of cloud storage has become a significant expense, said O’Connor: “The freebies that drew people in have been slowly but surely pulled away and with a growing cost to the storage. I have spoken to some in the service space that a decade ago got into the business of driving customers to cloud storage services who are now finding good business driving them back to on-prem.” All the while, cloud storage also can require an added cost for bandwidth. “It’s not that these distributed storage providers do not offer value,” he continued, “but it’s all about the right services for the right need.” Along with the potential for lower costs, as well as greater accessibility, storing confidential data locally reduces the risk of exposure to largescale breaches, said O’Connor. Local data storage, especially in the case of smaller businesses, is a far less attractive target for cyber-attacks, he continued. “If your confidential data is on the cloud, you obviously have a greater risk of being part of a massive, largescale breach,” said O’Connor. “It’s less of a risk to use the cloud for external data sharing but not for corporate infrastructure. Keeping your data local, as a smaller target, is often more secure.” On-Prem AI Perhaps even more consequential to the revival of on-premises computing is the impact of artificial intelligence. According to O’Connor, AI’s data processing and analysis tools can be expensive when housed in the cloud. Bringing these AI functions on-premises allows more businesses, especially smaller ones that may not have the budget for extensive cloud-based AI, to benefit from these capabilities. “On-prem AI will democratize some of the AI learning and capabilities that smaller businesses and institutions will have access to,” stated O’Connor. Having AI on-site also plays a role in protecting a company’s intellectual property (IP). When AI is run locally, sensitive and proprietary data – such as customer insights, unique algorithms and business strategies – stays within the company’s secure environment, reducing the risk of exposure or leakage that can happen when data is sent to and processed in the cloud, O’Connor argued. That includes avoiding “data bleed,” where proprietary information could unintentionally enhance thirdparty models or be accessed intentionally by external entities. “Having on-prem AI means that your data and IP gets to stay on-prem,” he continued. “There’s not one bit of risk that there’s any bleed-over from the datasets you provide for AI, ultimately helping other systems and potentially competitors learn and benefit from your private data and knowledge.” This is all not to suggest that we are about to see a sudden slowdown in the growth of public cloud services. As Forrester analysts point out, the more likely scenario is that on-prem or private cloud growth will occur in parallel to public cloud’s growth, not at its expense. o Fully Flexible Structured Hybrid Full Time in Office e Amount of cloud infrastructure organizations currently have in place Source: Auvik, 2024 % of US Companies by Number of Days Required in Office per Week Source: Flex Index Which of the following to you conder the most important aspect of partner enablement? Entirely on-premises 1% 50/50 29% Minority cloud, majority on-premises 9% Majority cloud, minority on-premises 44% 100% Cloud-based technology (nothing on premises) 17% 0 Days 1 Day 2 Days 3 Days 4 Days 5 Days 25% 2% 10% 28% Average 2.78 da 3% 0% 5% 10% 15% 20% 25% 30% 32% Days in Office/Week Ease of onboarding process Compelling incentives/rewards Guided next step of journey Targeted live or on-demand training Clearly stated objectives 28% 23% 20% 16% 13% 50 CHANNELVISION | JANUARY - FEBRUARY 2025
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