The Rise of On-Prem Private Infrastructure: What’s Driving the Private Cloud Comeback?
Why Companies Are Moving from Public Cloud to Private Cloud
It might sound counterintuitive in 2025, but while public cloud usage continues to grow, more and more companies are quietly turning their gaze back toward on-premises infrastructure – specifically, private clouds.
Yes, you read that right: after a decade of “cloud first” dogma and widespread public cloud adoption, organizations are rediscovering the value of owning and operating their own infrastructure. In the light of geopolitical challenges and constant trade wars, businesses want to minimize the risks and control where their intellectual property and data are kept. However, this isn’t about spinning up legacy data centers again. It’s about building flexible, secure, and cost-controlled private clouds that match the operational convenience of public clouds, minus the vendor lock-in and price shock.
So, What Has Shifted in the Cloud World?
Over the last few years, many organizations have rushed to the public cloud for agility, scalability, and reduced time-to-market. But as workloads scaled and complexity grew, reality hit… hard. Predictable costs turned into creeping, and sometimes unpredictable, constantly growing monthly bills. Compliance audits raised flags about data sovereignty and control especially with the U.S. CLOUD Act. And performance-sensitive workloads often just ran better on dedicated infrastructure.
At the same time, mature open-source cloud technologies like OpenStack and Kubernetes made it possible to build private clouds that offer the similar developer experience as public cloud, only with full ownership, better economics at scale, and customizable governance.
The result? A growing segment of companies are either repatriating workloads from hyperscalers or adopting a hybrid approach: keeping some workloads in the public cloud while running others in a modern, on-prem private cloud.
But Why Now? What is pushing More Companies Towards Choosing On-Prem or Private Cloud?
A few factors are converging to make this “on-prem moment” a serious trend:
- Cost transparency and control: Organizations are realizing they can optimize long-term costs by owning the infrastructure for predictable workloads, rather than paying a premium for the public cloud’s elasticity they don’t always need.
- Data sovereignty and security: Stricter data protection regulations (like GDPR, HIPAA, or industry-specific mandates) make private cloud an attractive option – especially when operated in-house or by trusted local partners. Some industries such as healthcare and finance have always been in favor or even required to keep their data locally.
- Performance and latency: For workloads that are sensitive to latency or require high-performance computing (HPC), dedicated edge infrastructure is often more performant and reliable.
- Modern Open-source Stack: Tools like OpenStack, Ceph, and Kubernetes have matured significantly over the past 5-10 years. Operating a cloud is no longer an experimental task reserved for hyperscalers hiring world-best engineers. It’s becoming accessible to enterprises of all sizes.
- No Traffic Costs: Unlike hyperscalers, private clouds don’t charge per GB of data transferred. If you’re running traffic-heavy services, APIs, or streaming apps, the savings can be massive.
Lessons from Rework: Rethinking Cloud Strategy
The book Rework by David Heinemeier Hansson and Jason Fried, founders of Basecamp and 37signals, isn’t about cloud infrastructure – but its message is surprisingly relevant.
In Rework, they argue for simplicity, independence, and questioning mainstream assumptions. That’s exactly what many companies are doing with cloud strategy right now.
In fact, 37signals famously left the AWS public cloud, saving millions of dollars by running their own hardware again. They called public cloud “renting” and advocated for owning your stack – a philosophy that perfectly aligns with the private cloud movement.
The takeaway?
Don’t follow the herd. Own what matters. And in today’s world, your infrastructure is strategic.
Real Stories: Enterprises Saving Millions with Private Cloud
This is not just a catchy phrase. Enterprises are reporting huge savings by moving off hyperscalers and onto private cloud infrastructure.
Take the 37signals example again. After migrating their Basecamp and HEY services off public cloud, they projected $7 million in savings over 5 years. And this is despite the CAPex associated with the purchase of own servers and maintaining hardware.
And they’re not alone! Companies like AcceleratXR and Aarki have reported substantial reductions in cloud spending – up to ridiculous 90% – by transitioning to private cloud solutions.
How c12n.cloud fits in
At Cloudification, we’ve seen this shift firsthand and that’s one of the main reasons why we built c12n. As you might have seen, our open-source-first IaaS platform enables organizations to deploy and manage a private cloud with the same ease you’d expect from public cloud providers.
It is built with technologies like OpenStack, Ceph, and Kubernetes, that make building a robust, automated private cloud environment easier than ever before. With c12n, you own your cloud infrastructure! c12n is a great vendor-neutral alternative to public cloud, that will help you avoid the lock-in traps that many organizations are trying to escape. We believe that moving away from the public cloud isn’t a step backwards. For many businesses it’s a strategic evolution – especially when paired with modern automation and DevOps best practices. And with tools like c12n, organizations can finally achieve a balanced cloud strategy: scalable, API-driven, and designed to grow with your needs.
Private Cloud vs. Public Cloud: Which one is for me?
With all the talk about cloud repatriation and on-premise resurgence, it’s important to clarify: public cloud still has its place. The real power lies in understanding which cloud model is right for which scenario. For some businesses, the hybrid cloud combining the power of both public and private might be the best strategy.
Here’s a breakdown to help decision-makers assess where a private cloud makes more sense – and where a public cloud might still be the better fit.
Private Cloud vs. Public Cloud - Comparison Table
| Criteria | Private Cloud (e.g. with c12n) | Public Cloud (AWS, Azure, GCP) |
|---|---|---|
|
Cost Control |
✔ Predictable, especially for steady workloads |
❌ Cost can spike unpredictably (especially traffic/egress) |
|
Traffic/Egress Fees |
✔ No fees for data movement |
❌ High egress and bandwidth costs |
|
Data Sovereignty |
✔ Full control, ideal for regulated industries |
❌ Data often spread across regions
|
|
Security & Isolation |
✔ Complete isolation possible |
❌ Multi-tenancy may introduce risks
|
|
Performance Consistency |
✔ Dedicated hardware = consistent performance |
❌ “Noisy neighbors” can affect performance
|
|
Scalability |
⚠️ Slower unless pre-planned |
✔ Instant elasticity
|
|
Operational Overhead |
❌ Requires internal ops team or managed solution |
✔ Minimal—fully managed by provider |
|
Best For |
Enterprises with predictable workloads, compliance needs, or cost optimization |
Startups, short-term projects, elastic workloads
|
For organizations seeking the best of both worlds, a hybrid cloud can be the ideal solution. Hybrid clouds combine the scalability and flexibility of public cloud with the control and cost-efficiency of private cloud infrastructure. This approach allows teams to run sensitive workloads on-prem while bursting to public cloud when needed—making it a strategic fit for businesses with diverse, dynamic, or highly regulated needs.
Need help deciding which cloud to choose? We got you covered!👇🏽
| 🧠 When to Choose Private Cloud | 💡 When to Choose Public Cloud |
|---|---|
|
|
|
Private Cloud is ideal when infrastructure is strategic, not just tactical. It’s not about nostalgia – it’s about ownership, efficiency, and freedom. |
Public Cloud remains a great option for early-stage companies, prototype environments, or services that spike unpredictably. |
Case in Point: Figma’s $100 000 000 AWS Bill
Figma’s recent IPO filing offers a textbook example of why high-volume public cloud usage can raise concerns — particularly around cost and vendor dependency. Figma is a collaborative web-based design tool widely used by UX/UI teams, which relies heavily on cloud infrastructure to power real-time design collaboration for millions of users.
According to its S‑1 document Figma is spending about $300,000 per day on AWS — translating to roughly $100+ millions annually, or around 12% of its revenue.
They’ve also committed to a five-year contract with AWS worth $545 million, locking themselves into a long-term dependency. Nearly all their compute, storage, networking, and other services are tightly coupled to AWS — meaning any price hikes could directly impact their operations and margins.
The two main takeaways of Figma’s case:
- High public cloud bills can consume a significant slice of revenue — particularly for companies with heavy compute demands.
- Vendor lock-in becomes a stealth risk at scale: renegotiating contracts or re-architecting to another cloud is painful and expensive.
What is the advantage of Private or Hybrid Cloud Strategies
| Consideration | Figma’s Situation | Private/Hybrid Cloud Advantage |
|---|---|---|
|
Cost Efficiency |
$100M+ annual AWS bills |
Avoid public cloud pricing premiums, especially on traffic and compute |
|
Control |
Locked into AWS ecosystem |
Greater flexibility to shift workloads, negotiate hardware refreshesigh egress and bandwidth costs |
|
Risk Management |
Fully dependent on AWS services |
Can offload steady workloads to private cloud for resilience and use public cloud to scale out only when needed |
For many enterprises, the answer is not to abandon the cloud—but to adopt a hybrid approach: keep bursting capabilities in public clouds for peaks or specific services, while running core compute and high-load services on a cost-controlled, private cloud foundation.
Final Thoughts
The “return” to on-prem doesn’t mean abandoning the cloud. Instead, it means redefining what “cloud” can be: not a location, but a model. And in that model, private clouds are having a serious moment.
What if you owed your Cloud again? Whether you’re managing sensitive data, running performance-critical applications, or simply trying to regain control over intransparent costs, it might be time to consider that your next cloud isn’t out there – it’s right here, on your own terms 👇🏽
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