Where are those workloads going? “There’s a renewed focus on on-premises, on-premises private cloud, or hosted private cloud versus public cloud, especially as data-heavy workloads such as generative AI have started to push cloud spend up astronomically,” adds Woo. “By moving applications back on premises, or using on-premises or hosted private cloud services, CIOs can avoid multi-tenancy while ensuring data privacy.” That’s one reason why Forrester predicts four out of five so called cloud leaders will increase their investments in private cloud by 20% this year.
That said, 2025 is not just about repatriation. “Private cloud investment is increasing due to gen AI, costs, sovereignty issues, and performance requirements, but public cloud investment is also increasing because of more adoption, generative AI services, lower infrastructure footprint, access to new infrastructure, and so on,” Woo says.
Hidden costs of public cloud
For St. Jude’s Research Hospital, the public cloud is a good way to get knowledge into the hands of researchers who aren’t part of their ecosystem today, says SVP and CIO Keith Perry. The hospital uses on-prem supercomputers to generate much of its research data, and the movement of that data into and out of the public cloud can become expensive. “The academic community expects data to be close to its high-performance compute resources, so they struggle with these egress fees pretty regularly,” he says.
