The Importance of a Cloud Exit Strategy: What It Is, Who Needs It, and How to Plan It

Do you need a “Cloud Exit Strategy”?. In recent years, cloud services have become an integral part of the digital infrastructure for businesses of all sizes. Organizations are increasingly leveraging cloud computing to enhance their operations. As a result, cloud adoption continues to rise, with more organizations moving their critical applications and data to cloud environments to stay competitive and agile.While the benefits of cloud computing are substantial, it is essential for businesses to plan for a potential exit from cloud services. Indeed, in some sectors, particularly those regulated or associated with government, it is becoming mandatory to have a formal “Cloud Exit Plan”, prior to the adoption of new cloud services. An example being the UK’s National Health Service (NHS), see: NHS Cloud exit strategy – NHS England Digital.

Interest in cloud exit strategies has grown, driven by high-profile discussions around cloud repatriation projects such as those at Basecamp (Hey.com) – we have an early article that covers the trends and interest with lots of useful links and data, see: On-premises, Cloud First or Cloud Repatriation – What’s the Trend? Which is Best? | eG Innovations.

Today I’ll cover the basics of what a cloud exit strategy usually encompasses and will include some real-world examples and resources to help you plan your own cloud exit.

What is a Cloud Exit Strategy?

A cloud exit strategy is a predefined plan for migrating applications, data, and services from one cloud provider to another or back to on-premises infrastructure. The process of moving workloads back on-prem or to private cloud is sometimes known as “Cloud Repatriation” or “Cloud Reversal”. A cloud exit plan is often part of a wider “Hybrid Cloud” or “Multi-Cloud” strategy.

What is a Cloud Exit?

I read a recent article on cloud exit that helped me focus my thoughts on this, see: CIOs rethink all-in cloud strategies | CIO. The article is just a collection of soundbites from some credible business leaders, the quotes are both insightful and instructive and the article carried the byline – “Applying lessons learned from initial forays into the cloud, IT leaders are forgoing platform-first mantras in favor of workload-specific strategies for deciding where applications will run best”. To me this is what you need to focus on when formulating a cloud exit, how granular and at what scale that exit would be with particular attention to *specific workloads*.

An “exit” could involve:

• moving web servers from Azure hosted to AWS hosted VMs because AWS datacenter locality best suited an organization.
• leveraging one of the new cloud-on-prem offerings emerging from the large public cloud vendors – such as AWS dedicated local zones – see: Hybrid Cloud Strategies – AWS Launches Dedicated Local Zones with Singapore Government as First Customer | eG Innovations.
• a simple lift-and-shift of an application or a database to an on-prem datacenter.
• leaving a public cloud for a local MSP, see: How MSPs can Capitalize on the Rush to Localize IT Services (eginnovations.com).

The Importance of Planning for a Potential Exit from Cloud Services

Let’s start with why you should invest the effort in formulating a cloud exit strategy (and how to justify the time-spent on this to your managers). While the benefits of cloud computing are often substantial, there are reasons you need to plan for a potential exit. These include:

Avoiding Vendor Lock-In: Dependency on a single cloud provider can lead to challenges if the provider’s services no longer meet the business’s needs or if costs become prohibitive. If using SaaS, it is possible that in the future a competitive SaaS solution will grow beyond the capabilities of the one in use. A well-defined exit strategy ensures that businesses can switch providers or revert to on-premises infrastructure without significant disruption.

Risk Management: Cloud providers may experience outages, security breaches, or changes in service levels that could impact business operations. External regulation changes, mergers & acquisitions, politics, wars, and extreme climate events may impact whether the cloud services you leverage today remain fit for purpose in the future. SaaS offerings can be risky (I covered this in-depth a few months ago – see: Should I Trust a SaaS Vendor or Product? | eG Innovations for some helpful tips to avoid a vendor-forced unwanted migration). Having an exit strategy mitigates these risks by providing a clear plan for maintaining continuity and protecting data integrity. Top Tip: Gartner’s regular “Emerging Risks” reports can be a good source of less obvious risks you may have overlooked.

Compliance and Regulatory Requirements: Regulations and compliance standards may change, necessitating a move to a different cloud provider or on-premises solution to meet legal obligations. SaaS (Software-as-a-Service) products may change ownership to a competitor or to foreign ownership. A cloud exit strategy helps ensure that businesses can adapt to these changes without compromising compliance. I’ll cover some links to where you can find out more about regulations in different geographies later.

Cost Control: Cloud costs can increase unexpectedly due to pricing changes or increased usage. An exit strategy allows businesses to evaluate alternative solutions and potentially reduce costs by switching providers or optimizing their cloud usage. A lot of the discussion around cloud costs has focused on Basecamp’s (Hey.com) well-publicized exit from public cloud – we’ve covered this in an earlier article, please see: On-premises, Cloud First or Cloud Repatriation – What’s the Trend? Which is Best? | eG Innovations.

Business Continuity: Ensuring that operations continue smoothly during and after the transition is critical.

By proactively planning for a potential exit, businesses can safeguard their operations, maintain flexibility, and ensure they are not unduly constrained by their choice of cloud provider or cloud-based services.

Best Practices to Include in a Cloud Exit Plan

A comprehensive exit strategy will include detailed migration plans, data protection measures, and testing to ensure minimal disruption. A rigorous plan will include specific elements such as:

• The criteria that would trigger the exit plan to be executed
• Identify alternative solutions
• Planning for parallel environments
• Understanding the data migration options, especially for bulk datasets
• An application migration plan
• Well-researched project budgets and timeline estimates
• Contractual and legal considerations
• Including business continuity preparations in the plan
• A people and staff skills plan
• A security and identity access management plan
• Determine the testing methodology
• Acceptance criteria

If we consider the above list, it becomes noticeably clear why organizations are increasingly establishing a cloud exit strategy and formalized plan, before adopting new services. If a contract ties your organization in long-term without break clauses it may jeopardize the viability of a cloud exit. And if a SaaS product does not have mechanisms via which you can extract your data in a usable format you may not be able to adopt better future alternatives.

There are plenty of guides and example outlines for formulating cloud exit plans and strategies, some of the more interesting and / or valuable that I have read are:

• Importance of a cloud exit strategy and how to plan one | Severalnines, alibi from a vendor offering cloud migration services and tools – this is a succinct, simple guide to a basic cloud exit plan.
• 8 key steps of a cloud exit strategy | TechTarget – This is a very simple basic example of a cloud exit plan designed for moving an app from running in cloud in a VM back to on-prem hardware. It’s the kind of scenario where many administrators might not bother to have a formal plan but highlights the importance of considering on-going maintenance when you move things back on-prem.
• Planning for the Exit: How to Terminate Cloud Relationships – Publications (morganlewis.com) – This is an article written by a law firm with a simple checklist of things you can look for in contracts and agreements that will help protect your data and IP in any future migrations.
• NHS Cloud exit strategy – NHS England Digital – It’s very worthwhile investigating the details of the UK’s NHS Exit Strategy documentation, there are some very detailed, useful sections including handling migrations to non-identical functionality i.e. where capabilities and feature sets are different.
• Cloud exit planning guidelines for financial services institutions – Microsoft Industry Blogs. This article includes a link to a whitepaper Microsoft provided to financial services authorities when selling Azure cloud services. Microsoft has understood that many governments regulate financial companies and dictate they must have an exit plan in place to be able to buy Azure. Contains some useful information on global regulation on cloud exit strategies.

Who has a Cloud Exit Strategy? Who Needs a Cloud Exit Strategy?

Cloud exit planning tends to occur within:

• Enterprises: Large organizations with significant cloud investments and often large cloud billing costs. Organizations operating with high stakes in data security, compliance, and operational continuity.
• Government and Public Sector: Regulatory requirements and data sovereignty issues.
• Healthcare and Financial Services: High compliance and data protection needs.

However other types of organization may benefit from putting together a basic cloud exit strategy, such as:

• SMEs (Small and Medium-sized Enterprises): SMEs often balance their needs for flexibility and cost control alongside a dependence on the skillset of a small team. SMEs may also be subject to the demands of their customers, large enterprises or government procurement may demand smaller suppliers utilize particular clouds or on-prem certain data to meet their own compliance standards and SMEs may be forced to exit clouds or move data / workloads to meet such demands.
• Startups: Balancing growth with the ability to pivot quickly. Whilst clouds may offer huge benefits when growing as per the Basecamp scenario there may be a need to reduce costs as workloads become stable and well-understood.

Cloud Exit – Data Migration and Egress Costs

It often feels like the big public clouds – Amazon AWS, Microsoft Azure and Google GCP do a lot to make moving to a different cloud provider or cloud repatriation difficult. Vendor lock-in is surely in a cloud vendor’s best interest? In general, though the big public cloud vendors do have very clear data migration paths and agreements. Smaller vendors are often a lot more variable.

As many organizations increasingly formulate cloud exit strategies up-front before adopting new services, pressure has been mounting upon the big public clouds to provide cloud exit pathways for their services. In the past data egress (extraction data) costs for public clouds have been a barrier to migration. In recent months, the big clouds have succumbed to customer pressure and removed many egress costs. First Google (see: Google Cloud Exit free data transfer request), then AWS (see: Free data transfer out to internet when moving out of AWS | AWS News Blog (amazon.com) and Amazon AWS Joins Google Cloud In Removing Egress Costs (forrester.com)), and then finally Azure (see: Now available: Free data transfer out to internet when leaving Azure | Azure updates | Microsoft Azure).

In many ways “Cloud Exit” is a facet of the broader “Super Cloud” discussion, see: What is Supercloud? What to consider when monitoring and observing a Supercloud? | eG Innovations.

How Cloud Exit is Being Facilitated by Regulation and Government

Regulated industries such as finance and governments have been at the forefront of those formalizing cloud exit plans to protect their data and business operations long-term. As such they have also driven change within the cloud vendors, who now to some extent are having to market and sell their cloud exit capabilities and support.

Microsoft have a very interesting whitepaper aimed at financial service customers to facilitate cloud exit planning, see: Cloud exit planning guidelines for financial services institutions – Microsoft Industry Blogs. I’d recommend downloading this whitepaper and reading “Annex 2: Regulation Overview”, it is a fascinating summary of what various government regulatory agencies dictate financial service providers need to include in their cloud service exit strategies – mandates from the European Banking Authority (EBA), the Monetary Authority of Singapore (MAS), UK Financial Conduct Authority (UK FCA) and many more are included – and they vary considerably. These sections of regulation should help you formulate your own cloud exit plan.

Pranati Dave at the Everest Group has an insightful article covering cloud exit in financial services, which includes some specifics on organizations adopting best practice, see: Navigating Cloud Portability And Exit Strategies In Banking And Financial Services | Blog – Everest Group (everestgrp.com).

Schemes such as the UK Government’s G-Cloud (Government Cloud) Framework and platform aim to make both cloud adoption and cloud exit smoother. G-Cloud is a UK Government initiative aiming to make the procurement process of commercial services and cloud technology easier and quicker for government and public bodies. The platform eases the procurement of IT technology for public sector organizations by showcasing government-approved services and removing the need for a long complicated tender procurement process – buyers can simply access a pool of approved commercial suppliers.

Multi-cloud uptake by governmental organizations in Singapore has been significant because of the country’s Government on Commercial Cloud (GCC) framework initiative. The “cloud agnostic” GCC platform enables agencies to use cloud service providers such as Amazon Web Services (AWS), and currently hosts over 600 government digital services. So far, government agencies across Singapore have collectively migrated close to 60 percent of workloads to the commercial cloud, and are on track to achieving their target of 70 percent in 2023.

Conclusions on Cloud Exit

A cloud exit strategy is basically a useful vehicle for doing due diligence for ensuring continuity, security, and control over business operations. It mitigates risks like vendor lock-in, unexpected costs, and service disruptions by outlining plans for migrating data and applications out of a cloud environment.

As the cloud landscape evolves, a robust exit strategy supports business agility, allowing companies to adapt to new opportunities and innovations. This in theory should foster a competitive and flexible market, empowering businesses to optimize their cloud investments. As customers increasingly demand exit pathways from cloud vendors upfront, this drives cloud services to compete harder to retain business, which in theory can only be good.

Other Resources

• An overview of the drivers for cloud exit: On-premises, Cloud First or Cloud Repatriation – What’s the Trend? Which is Best? | eG Innovations
• Any migration to or from the cloud should be taken as an opportunity for modernization beyond migration – to learn more about this, please see: Cloud migration vs modernization – What’s the difference? | eG Innovations. A similar article on factors to consider in cloud exit or migrations is: Define your cloud migration strategy with the AWS 6 Rs. (eginnovations.com).
• Some thoughts on why many choose a hybrid cloud strategy: From Cloud Adoption to Reversal: Navigating the Hybrid Cloud Advantages Adventure | eG Innovations.
• Read about cloud usage and adoption trends, in: Cloud Technology Adoption Trends | eG Innovations.