Industry Voice: Public cloud is reaching an inflection point

UK-based cloud and infrastructure providers are uniquely positioned to offer strategic advantages to business looking to redirect their data strategies

Business leaders increasingly view their data infrastructure as a spectrum, ranging from fully owned, on-premise data centres to colocation, private cloud, and public cloud services.

Recent research by Pulsant shows a significant shift away from the public cloud, with 87% of businesses planning to partially or fully repatriate workloads over the next two years. This is up from 43% in 2021, according to Barclays.

This shift, once viewed as a “public cloud exodus,” is now recognised as a strategic realignment in digital infrastructure. It was initially sparked by early adopters of public cloud services experiencing unpredictable and rising costs, especially around data egress. These financial surprises led many to reassess whether public cloud was the best long-term solution for them.

Cost as a growing consideration

However, the decision to move away from public cloud is now driven by more than cost. Companies are seeing performance improvements, lower latency, and greater control when hosting closer to end users. By diversifying infrastructure providers, businesses also gain increased resilience. The growing adoption of AI technologies and tightening compliance requirements have further accelerated the shift.

AI is driving change

AI is playing a pivotal role in how businesses shape their data strategies and is a key driver influencing their data decisions. With nine times more private than public data, they now recognise the value of using their own untapped information to enhance AI project outcomes. Repatriating workloads offers better control, customisation, and cost efficiency, which are key benefits for companies building large language models (LLMs) or using AI tools while protecting intellectual property.

Simultaneously, energy and supply chain costs have made public cloud more expensive for AI workloads, while falling hardware prices have made private infrastructure more attractive. This cost convergence is driving renewed interest in private cloud, colocation, and on-premise environments as more efficient options.

Data sovereignty comes to the fore

Compliance is another major influence, with data sovereignty a primary consideration pushing businesses to move away from big tech services. Regulatory scrutiny around reliance on US-based hyperscalers, some of which admit they cannot guarantee jurisdictional data boundaries, has encouraged organisations to seek infrastructure options that better align with UK and EU compliance needs.

The future is hybrid

As we approach 2026, the landscape of digital infrastructure is reaching a critical inflection point. Public cloud will continue to play a vital role, but the future lies in hybrid strategies tailored to workload and compliance requirements.

This growing awareness of alternatives marks a redefinition of enterprise data strategy. UK-based cloud and infrastructure providers are uniquely positioned to offer strategic advantages, including data sovereignty, regulatory alignment, and lower latency.

Ultimately, businesses must situate themselves more precisely on the digital infrastructure spectrum. A hybrid model that balances public cloud, private cloud, colocation, and on-premise solutions will be essential to achieving performance, cost efficiency, compliance, and long-term resilience in an evolving digital economy.

Mike Hoy is CTO at Pulsant

Pulsant is a finalist in the Cloud Excellence Awards 2025