Cloud Reset: A Guide to Cloud Repatriation Strategy in 2026

Explore the 2026 Cloud Reset. Learn how to repatriate workloads for cost and performance, and see how Shopify helps you build a smarter hybrid strategy.

Five years ago, being cloud-first was the prevailing approach. If you suggested buying servers, you were behind the times.

But the math has changed. Between the AI tax on computing and cloud bills that outpace revenue, many teams are rebalancing by moving their steady-state workloads to hardware they own and adopting a hybrid infrastructure.

This new era, dubbed the “cloud reset,” has sparked a surge in cloud repatriation. The idea is to regain cost-predictability and the performance control you’ll need for the next decade of growth.

Ahead, you’ll learn which workloads are the best candidates for cloud repatriation, which ones are not and where Shopify can help. 

What is cloud repatriation (and what it isn’t)

Cloud repatriation is the process of moving a workload, or parts of it, out of a public cloud environment (like AWS, Azure, or GCP) and into private infrastructure. This might include an owned data center, a colocation facility, or a managed private cloud.

For enterprise brands, the infrastructure conversation has shifted from “cloud at all costs” to “cloud where it makes sense.” Companies aren’t fully pulling back from cloud adoption. In 2026, we’re seeing a cloud reset, with organizations seeking a more sustainable, high-performance equilibrium.

Contrary to early industry fears, repatriation is not a sign of failure or a mass exodus from cloud solutions. Recent data shows that while new cloud data migrations still outpace exits, repatriation is a new lever for cost-efficiency:

• Only about 21% of cloud workloads have been repatriated globally, indicating a surgical approach rather than a total retreat.
• The primary drivers are cost management (84%) and security/governance (77%). It’s the monthly bill for NAT gateways, the surprise egress fees when you run a big analytics job, or the realization that your “managed” database is more work to tune than a self-hosted one.
• Roughly 66% of organizations now prefer running containerized applications on a mix of public and private clouds.

Overall, repatriation is a workload-placement decision driven by unit economics, regulatory posture, and latency/data-gravity constraints. The goal isn’t to leave the cloud. Instead, it's about using on-premises infrastructure for stable, predictable workloads to reduce costs, while keeping public cloud for workloads with fluctuating demand.

What counts as repatriation?

Repatriation isn’t a big move all at once. Usually, it starts with the data. If you’re paying a 30% premium just to have a provider host your Postgres DB when your traffic is basically flat, you may save money by 

hosting it yourself in a colocation facility instead.

Repatriation counts if:

• Partial workload move: You move certain tiers, such as the stateful data, caching layer, or AI inference workloads, to private hardware and keep the front end in the cloud.
• Going from managed to self-managed: You replace a cloud-managed service (like a managed database or Kafka) with a self-managed version running on private infrastructure.
• Data gravity shift: Moving massive data warehouses to private object storage to avoid egress fees.
• DR/backup move: Shifting disaster recovery or cold storage out of the public cloud.

Repatriation doesn’t count if

• AWS to Azure: Switching from one hyperscaler to another is just a multi-cloud migration. You’re still in someone else's house, you just changed landlords.
• Adding a private environment: If your main app stays in the cloud and you just add a small private setup for overflow, that’s just a hybrid strategy, not a return to base.

Many enterprises feel trapped in a paralyzing conundrum. They stay on legacy platforms because they fear a disruptive migration that takes forever and costs a lot. Hesitation creates inaction and the compounding cost of lost market share, shrunken margins, and the inability to innovate while competitors accelerate.

Shopify eliminates the excuse to stay stuck by providing a surplus of value. This is the multiplier effect gained when a faster migration (20% faster than competitors) is combined with lower costs (23% less on average) and immediate productivity gains. 

Why cloud repatriation is trending again in 2026

What we’re seeing in 2026 is a change in how enterprises weigh workloads, economics, and governance. In the late 2010s, companies rushed into the cloud to become more agile and minimize capital expenditure (CapEx). 

In 2026, cloud spending is still forecast to reach $1.03 trillion, so it’s not dead. But the goal is to be more efficient. With cloud budgets exceeding plans by an average of 17% and roughly 27% of cloud spend still categorized as wasted, companies are now choosing the best home for each workload based on cost and operations.

What’s changed? Five drivers of the cloud reset

1. FinOps is no longer optional. Some 84% of organizations cite cloud spend management as their top challenge. In response, teams are moving steady-state workloads to private infrastructure to keep costs stable.
2. AI rewrote the cost curve. As 72% of organizations now use GenAI public cloud services, the scale of training and inference workloads requires predictable infrastructure and storage costs.
3. Data gravity and synchronization. A 2024 Gartner forecast identified data synchronization across hybrid environments as the most urgent GenAI challenge. This is forcing a rethink of where data lives versus where it is processed.
4. Hybrid is the default operating model. Gartner predicts that 90% of organizations will adopt a hybrid approach through 2027.
5. Stricter governance and resilience. Regulations like DORA have increased expectations for third-party risk management, making private infrastructure more attractive for critical workloads. 

Ecommerce infrastructure feels this shift more acutely than almost any other sector. You want the public cloud for its elasticity. You can’t risk your site crashing during a massive holiday sale. 

But while the cloud is great for traffic spikes, it has become costly for other tasks. The data pipelines behind your AI search, personalized ads, and merchandising are now the most expensive parts of your tech stack. That’s why brands are moving heavy, steady-state data and ML systems to environments with greater cost-predictability and clearer governance.

The real drivers of cloud repatriation

One high cloud bill isn’t the catalyst for change. It’s a multi-factor reset driven by unit economics, performance needs, and governance expectations. 

Cost drivers that push workloads back

Cloud costs are usually fine until your business hits a steady state. Once you know exactly how much power you need, paying for on-demand cloud scaling is like renting a car for five years instead of just buying one.

Here are some cost drivers influencing repatriation:

• Unit economics: Leaders are focusing more on granular metrics like cost per order, cost per 1,000 sessions, or cost per GB ingested.
• Managed services costs: Cloud providers charge a premium to manage your databases. At a certain scale, that convenience fee becomes so large that you can hire a full-time engineer to run it yourself for less.
• Egress traps: Moving data into the cloud is free. Moving it out (for backups or analytics) is where they hit you with egress fees. This is one of the main reasons companies move their data warehouses back to private hardware.

Enterprise teams avoid cloud vs. on-premise debates and model the decision as fully loaded unit economics. A credible repatriation business case ties infrastructure placement to a measurable unit and includes costs that are commonly left out of first-pass cloud spreadsheets.

Fully loaded unit cost typically includes:

• Compute + storage + network, including inter-AZ/inter-region transfer
• Managed service premiums like databases, streaming, search, and ML platforms
• Observability, such as logs, metrics, traces, retention, and query costs
• Security tooling and compliance controls
• People cost, including SRE/platform on-call, patching, upgrades, DR testing, and capacity planning
• Facilities and connectivity for private environments, such as colocation fees, power, cross-connects, and private links

When a workload is predictable and steady-state, the repatriation decision is clear. Compare the fully loaded unit cost of public cloud versus private infrastructure, and choose the placement that preserves SLOs at the lowest long-run operational burden.

Checklist: Are you ready to decide?

If you can’t answer these six questions, you aren’t ready to choose between cloud and repatriation:

1. What is the fully loaded cost per order (or 1,000 sessions) today?
2. What percentage of spend is variable vs. committed, and what is the actual utilization rate?
3. What are your top five line-item cost drivers?
4. What is your monthly cost for egress and inter-region data flows?
5. What portion of your current spend is estimated waste?
6. Will your cost scale linearly or superlinearly as you grow over the next 18 months?

Performance and latency drivers

Sometimes companies will move because of latency. You can justify repatriation when performance constraints are structural and local data processing is a competitive advantage. 

Real-time inventory checks, sub-second fraud scoring, and high-speed search/autocomplete are use cases where every millisecond of latency impacts the bottom line. Look at your p99, or the experience of your 1% unluckiest users. If their experience is lagging, your cloud convenience is costing you sales.

Risk, compliance, and governance drivers

Repatriation is also a move to regain transparency and agency over critical infrastructure. New regulations, such as the EU Data Act, are tightening focus on cloud switching, data portability, and third-party risk.

In the cloud, if something goes wrong deep in the system, you have to wait for the provider to fix it. If you own the hardware, your team can access the logs and the physical gear to immediately find the root cause.

However, when you move to self-hosted infrastructure, you gain transparency but lose a safety net. You are now 100% responsible for security, which includes implementing your own intrusion detection systems and managing patches.

Comparing public versus private cloud options 

	Public cloud	Colocation	Private cloud	Hybrid
Cost predictability	Medium (Complex/Variable)	High (Fixed Facility)	Medium-High	Medium
Agility	High	Medium	Medium	Medium-High
Staffing burden	Lower	Highest	Medium	High
Lock-in risk	High	Lowest	Medium	Medium
Performance	Great globally	Best for locality	Strong for locality	Best of Both

Many enterprises stay on outdated platforms because they’re afraid a migration will be a nightmare. Shopify removes that risk. Not only does Shopify offer the world’s fastest checkout, but setup costs are 23% lower than legacy competitors.

Shopify handles the heavy lifting of commerce infrastructure, so your team doesn't have to. When you stop wasting time on maintenance toil like patching servers or managing basic hosting, you give your developers their time back.

This is where the repatriation strategy comes into play. Your best engineers can stop babysitting a checkout page and start focusing on the high-value AI and data workloads that belong on your own private hardware.

Which workloads are best candidates for repatriation?

The strategy moving forward is simple. Use the public cloud for experimentation and scale on demand, but rely on private infrastructure for the unit economics of your steady-state operations.

Best candidates

• Steady-state compute: If a workload has high, predictable utilization with minimal seasonality, the public cloud's elasticity premium is less useful.
• Data-heavy systems: As AI adoption grows, moving data is a major bottleneck. Repatriating data warehouses or heavy event streams solves the data-synchronization challenge mentioned above. 
• AI training and inference: Organizations prefer private environments for training and tuning models to maintain control over data sovereignty and cost-scaling.
• Regulated and containerized apps: For mature teams, dedicated environments simplify audit trails and logical boundary controls. That’s why 66% of organizations run their Kubernetes or containerized apps on private or hybrid clouds.

Keep in the cloud

• High-volatility ecommerce: Peak events like Black Friday and Cyber Monday (BFCM) or flash sales need the capacity only hyperscalers provide. 
• Innovative sandboxes: Environments for A/B testing and prototyping benefit from cloud agility. You can fail fast, and it costs less than provisioning hardware.
• High-complexity managed services: Keep workloads that depend on sophisticated serverless or global cloud databases. Recreating 99.9% uptime service-level agreements (SLAs) with the same SRE depth on-premises is cost-prohibitive.

How to decide on what to repatriate

Now that you understand the best workloads to repatriate, it’s time to turn inward. What will you repatriate in your organization? Here is a five-step process that prioritizes unit economics and operational resilience. 

1. Map your workloads

You cannot move what you don’t fully understand, so begin by listing every workload along with its upstream and downstream integration points. Define its owner, business criticality, PII/PCI scope, and recovery point objective (RPO) and recovery time objective (RTO) targets, and identify peak traffic windows and the potential blast radius of a failure.

Document the network path from the data source to the consumer for each workload—including systems, queues, third parties, batch jobs, and admin tools—because teams routinely overestimate the extent to which these paths are documented. Identify data gravity pain points, such as massive recurring transfers or heavy AI datasets that complicate hybrid models.

2. Baseline current costs and reliability 

Before selecting a destination, establish an objective baseline by capturing your error budget burn, incident rates, mean time to repair (MTTR), and availability. Adopt the mindset that “slow is the new down” and include p95 latency for critical user journeys in your reliability baseline.

To justify your strategy, quantify your unit economics, such as cost per checkout, order, or API call. Separate fixed costs from variable costs like egress and logging.

3. Model your placement options

Evaluate each workload against four paths: 

• Remaining as-is: Only if costs are predictable and service-level objectives (SLOs) are met.
• Optimizing in the cloud: Right when cost is the main pain, and architecture can be right-sized without relocating.
• Partial repatriation: Move only the workloads where cloud fit is consistently poor.
• Full repatriation: Only when multiple forces like cost and performance stack and the operating model can support it.

Since the most cited driver for repatriation is spend exceeding expectations, determine if architectural right-sizing or better FinOps can solve the pain without a platform move.

Partial repatriation is often the most balanced choice, allowing you to move egress-heavy or steady-state computing to private infrastructure while keeping elasticity-friendly workloads in the cloud.

4. Execute a targeted pilot

Choose a single workload with clear boundaries and define your success metrics across reliability, performance, cost, and operations. Your pilot will measure the infrastructure bill, as well as the operational burden, such as on-call pages and weekly toil hours.

This is important because 2025 data shows operational time is trending upward, from 25% to 30%, meaning a pilot that lowers your cloud bill but doubles your team's toil is a net loss for the business.

5. Formalize the operating model and ownership

Lock in who owns what model. Clearly define responsibilities between platform and product teams for on-call rotations, patching, DR testing, and capacity planning.

Remember that repatriation isn't a silver bullet. You’re trading a high cloud bill for a high people bill. You now have to care about rack space, power redundancy, and who’s going to swap out a failed drive at 3 am. If your team isn't built for that, reconsider it.

How Shopify helps with cloud repatriation 

Many enterprises stay on bloated legacy platforms because they fear a high-risk replatforming project will consume all their engineering resources. Shopify offers a faster, more predictable path to value. When you offload the complexity of core commerce to Shopify—checkout, global scaling, and PCI compliance—you reclaim your engineering team’s time.

Shopify reports independent research showing implementations are 20% faster, 23% less expensive, 66% more likely to launch on time, and 3X more likely to stay on budget than competing platforms. 

For CTOs worried about disruption, Shopify helps lower the risk of your repatriation strategy. You can keep elasticity where it matters, leveraging the public cloud for peak shopping events like BFCM, while repatriating steady-state, data-heavy systems for the predictability and control that your bottom line demands.

Cloud repatriation FAQ

What does cloud repatriation mean?

Cloud repatriation means moving digital assets such as data, applications, or entire workloads from public cloud environments back to on-premises data centers or private clouds. Companies make the move to regain control over infrastructure, improve performance for specific tasks, and meet data-sovereignty requirements. 

Will cloud repatriation pick up pace in 2026?

Yes, 2026 is projected to be a breakout year for the cloud repatriation trend as organizations go from experimentation to AI intelligence. Many companies are shifting workloads back to local environments to better manage the high costs of AI processing and to comply with tightening global data residency regulations.

Who are the big 3 cloud providers?

The big three public cloud providers are Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). As of 2026, these three giants continue to dominate the global market, collectively holding 63% of total enterprise cloud spending.

Are companies pulling back from the cloud? 

Companies aren’t pulling back from cloud adoption. They are rebalancing by adopting a hybrid infrastructure—using cloud computing for scalability and pulling high-cost or sensitive workloads back on-premise.