What Happens When You Want to Leave the Cloud?

Even as cloud usage grows, there will be times when companies want to leave the cloud. How do you leave with minimal disruption?

Mary E. Shacklett, President of Transworld Data

May 20, 2024

5 Min Read
Cloud shape with up and down arrows
Juan Roballo via Alamy Stock

More than 90% of companies now use more than one cloud service, yet there also are growing signs of companies wanting to leave cloud services.

“Just over a year ago, we announced our intention to leave the cloud,” said David Heinemeier Hansson, co-owner and CTO of web software company 37 Signals in an article. “We were going to build our own tooling rather than pay for overpriced enterprise service contracts … A month later, we placed an order for $600,000 worth of Dell servers to carry our exit, and did the math to conservatively estimate $7 million in savings over the next five years. We also detailed the larger values beyond just cost, that was driving our cloud exit. Things like independence and loyalty to the original ethos of the internet.”

Hansson went on to write that the cloud-to-on-prem transition his company made was smooth, that customers hardly noticed, and that the company had already realized around $1 million savings on its cloud bill.

Hansson’s experience is not an isolated one. Over half of organizations say that they are struggling to find their ROI from the cloud. As a result, some are looking at the processing and other technological advancements that have rendered on-prem computing more affordable and scalable, while others simply want to move services from one cloud provider to another.

Related:8 Cloud Migration Challenges

For companies considering a move, here are six ways to terminate cloud services for a migration to on-premises or other cloud services:

1. Look at your agreement. What does the contract with the cloud provider you wish to leave state about termination? I’ve worked with many companies on this issue, and a majority can’t answer that question because when they enter a cloud contract, they never contemplate that they would ever want to leave.

Typically, cloud vendors have 30-to-90-day advance notice requirements for informing the vendor you want to terminate services. In some cases, the notification requirement might be one year in advance.

Then, there is the issue of how much support you are going to get from your cloud vendor during the migration. Typically, cloud contracts are silent on this unless you’ve attached your own service-level agreement (SLA) to the contract that addresses termination support.

If your vendor is silent about termination support (and most are), your plan should anticipate light to nonexistent support from the vendor you are leaving when it comes to moving your data and applications to another source. Your migration plan may need to address that with additional in-house help or outside resources.

Related:Overcoming Top Cloud Migration Barriers: Strategies for Success

2. Evaluate the services and data that you have on the cloud. Do you know if you fully own your data or the applications you might have created on the cloud? A surprising number of companies really don’t know.

Again, it is time to revisit your contract with the vendor you are leaving. If you’ve been using their application development tools to build your applications, you might find that you do not have exclusive ownership of these apps and that the vendor can offer them to other clients, including your competitors.

3. Determine the impact of cloud off-migration and plan for it. It’s always important to perform a risk assessment for a cloud off-migration before you notify the vendor you are leaving. What IT assets (e.g. apps) could you be leaving behind? What about the exclusivity and security of your data? And, if you lose exclusive control of these assets, how will it impact your organization, and how will you compensate for it?

4. Contact and work with your vendors. Once you’ve assessed your risk and planned for it, it’s time to contact vendors. Your first vendor contact should be the new vendor you are moving to. That vendor will be highly motivated to assist you, so you want to know which specific areas of expertise and technical support that the vendor can provide during migration and whether these services will meet your needs and address your concerns.

Related:Using Cloud for Competitive Advantage

If you are assured that the new vendor's support will be strong and you have contractual guarantees for migration support from that vendor, it is time to move forward.

An optimal approach for notifying the cloud vendor you wish to leave is by making a personal phone call to the vendor first. This is a personalized effort to reach out to that vendor that can then be followed by a formal letter of intent to leave. Often a little personal communication can go a long way to ease tensions in a difficult situation such as termination.

5. Perform migration testing and have a failover plan. A cloud migration should have a failover plan in place. This can be done in two steps:

  • Perform the migration in test mode first. You and your vendors will have an opportunity to resolve any glitches so the real migration can be performed with the best results.

  • Second, for the actual migration, have the top people from your staff (and/or from the vendors) in active standby for issue resolution. Perform the migration on a weekend, or at a time when you can comfortably take down resources to perform the move. If the migration fails for some reason, you should have a plan in place with your original vendor to recover and restore services until a successful migration can be made. There might be an extra cost for this, but it is insurance well worth paying for.

6. Finally, revisit your cloud contract negotiation process. When I visit companies and talk about cloud contracts, most acknowledge that they went through the “school of hard knocks” when it came to learning about effective contract negotiation.

A key omission for many is not including an SLA for termination support, which the cloud vendor likely won’t have. If in your initial cloud contract, you add an SLA that specifies the support levels you expect from the vendor should termination become necessary, you at least have some legal “teeth” in your contract that will assure you that the vendor, although unhappy that you are leaving, will capably support your migration. It’s never easy to discuss this subject when you are first entering into a contact with a vendor and everyone is happy, but if you do so, you can save yourself a lot of grief and hard work later.

About the Author(s)

Mary E. Shacklett

President of Transworld Data

Mary E. Shacklett is an internationally recognized technology commentator and President of Transworld Data, a marketing and technology services firm. Prior to founding her own company, she was Vice President of Product Research and Software Development for Summit Information Systems, a computer software company; and Vice President of Strategic Planning and Technology at FSI International, a multinational manufacturer in the semiconductor industry.

Mary has business experience in Europe, Japan, and the Pacific Rim. She has a BS degree from the University of Wisconsin and an MA from the University of Southern California, where she taught for several years. She is listed in Who's Who Worldwide and in Who's Who in the Computer Industry.

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