The Cloud Reset: Why Private Cloud Is Making A Comeback
Pankaj Gupta is Senior Director of Cloud solutions marketing at VMware by Broadcom.
For over a decade, public cloud was the default answer to every IT modernization question. It was faster, cheaper and scalable—until it wasn't. Now, as the dust settles and CIOs reevaluate their cloud strategies, a striking trend is emerging: a decisive 'cloud reset.'
According to my company's 2025 report—based on insights from 1,800 IT leaders across the globe—organizations are no longer viewing cloud as a one-way journey to hyperscalers. Instead, they are intentionally shifting workloads back into private cloud environments. The reasons? Security, compliance and cost control. A recent IDC research blog corroborates these findings, highlighting the increasing adoption of private cloud or on-premise computing practices.
Beyond The Binary: A Strategic Mix
The idea that enterprises must choose between public or private cloud is outdated. In fact, 93% of surveyed organizations already use a mix of both, but the shift we're seeing is about intention. IT leaders are starting to prioritize private cloud for the right workloads—particularly where data sovereignty, compliance and cost predictability are paramount.
This isn't cloud repatriation driven by nostalgia. It's driven by optimization and business needs.
Repatriation: No Longer A Dirty Word
A full 69% of organizations are considering repatriating workloads, and 35% have already done so—with security-sensitive applications leading the charge. What's more telling is that 51% of those citing repatriation did so specifically for security and compliance reasons—and 46% for data-intensive workloads.
In today's regulatory climate—where GDPR, HIPAA and global data protection laws dominate IT decision-making—control matters. And 92% of respondents say they trust private cloud more for security and compliance than public alternatives.
Cost predictability and optimization is another key driver. As per our findings, 94% believe some of their public cloud spend is wasted, and 31% believe more than half of it is.
Private Cloud: Agility Meets Control
A few years ago, private cloud was considered slow, siloed and too dependent on legacy infrastructure. That's changed.
Modern private cloud platforms now offer self-service provisioning, container support and integrated FinOps tools. In fact, 84% of enterprises run both traditional and cloud-native workloads in their private cloud today, demonstrating that private environments are no longer just for legacy applications.
More impressively, 53% of enterprises plan to deploy new workloads in private cloud, reflecting growing confidence in its agility and maturity.
The Generative AI Factor
With generative AI moving up the CIO priority list, private cloud is also emerging as a strategic foundation for AI workloads that require data privacy, low latency and cost control.
Hyperscalers offer unmatched scale, but organizations are growing wary of exposing proprietary data to third-party platforms. Running LLMs and inference engines in a controlled, compliant private environment offers a compelling alternative.
Why The Reset Now?
This 'cloud reset' isn't reactive—it's reflective. IT organizations have gained real-world experience and are recalibrating based on five key realities:
1. Security Is Nonnegotiable: Nearly a third of IT leaders cite public cloud security risks as their top challenge.
2. Financial Waste Is Visible: Cloud cost unpredictability is a board-level issue. CIOs need clarity and control.
3. Compliance Isn't Optional: Global regulations are forcing tighter control over data residency and access.
4. Skills Matter: Running private clouds well requires talent and breaking operational silos. Many are now reskilling and reorganizing their teams accordingly.
5. Application Needs Vary: Back-office, data-heavy, and even modern apps now have viable paths in private cloud.
This isn't about undoing cloud migration. It's about optimizing placement—application by application—based on business, regulatory and financial priorities.
The Way Ahead
To truly harness the power of the private cloud, organizations must do three things:
1. Break Silos: IT teams need to break down their traditional silos to achieve business goals, such as better agility, cost optimization and regulatory compliance. They can do this by encouraging collaboration across different IT and business teams, facilitating better data-sharing and communication practices.
2. Invest In Cross-Skilled Teams: To accelerate private cloud adoption, organizations need to address persistent skill gaps with focused training and vendor collaboration.
3. Treat The Private Cloud As A Platform—Not A Project: Treating the private cloud as a platform is essential for unlocking its full potential, fostering continuous innovation and agility for the entire organization. This strategic shift moves beyond a one-off project mindset, focusing instead on building a foundational environment for ongoing development and value creation.
IT leaders should also ask themselves a few questions to embrace this mindset. What workloads make sense to move back? Which ones should stay public? And how do we maximize both?
The cloud conversation is evolving. From cost to compliance, and from generative AI to governance, the smart enterprise isn't choosing sides—it's choosing strategy.
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