Businesses are increasingly migrating workloads from public to private cloud environments as cost realities bite and data sovereignty concerns mount.
Forget the marketing hype: the honeymoon with public cloud is officially over for many companies. Once hailed as the ultimate Mecca for digital transformation, public cloud is now under scrutiny as businesses grapple with ballooning costs and gnawing concerns over data sovereignty.
This trend, dubbed “repatriation”, is reshaping South Africa’s tech landscape. Companies are learning the hard way that not every workload is destined for those hyperscale data centres in the sky. The result? A surge in local private cloud investment.
Falling short on promise
It’s not that the tech is fundamentally flawed. The real problem is businesses trying to squeeze their old-school, monolithic, but reliable apps into cloud spaces designed for sleek, cloud-native (read: AI-hungry) workloads.
“The repatriation that’s happening is the people who take those existing traditional applications moved them to public cloud and never got what it promised. The reason they never got what it promised was that’s not what it was really built for,” said Lee Syse, director of product and go-to-market strategy at Routed.
For traditional line-of-business apps, public cloud’s metering and billing model — designed for “new generation services” — turns into a financial mess. Bandwidth egress costs, IP address charges and data transfer fees make it “very difficult to track” spending, leading to dreaded “cost spikes”.
Add to that the trap of hyperscaler discount models. Syse explains that enterprise discount programmes (EDPs) offer “aggressive discounts based on commitment of future spend”, but when companies “don’t get to that spend”, they face “back billing” to list prices. The result? Customers get “burnt”.
This financial whiplash is pushing organisations to “relook at their commercial construct” and ask whether public cloud delivers on its shiny promise.
The sovereignty play
Syse knows the battlefield well; his VMware-flavoured expertise keeps Routed sharp in the migrating market. But there’s more to the repatriation conversation than just rands and cents: data sovereignty is suddenly top priority (just ask any CTO, actually ask the CEO, because he’s the one wanting answers).
Any organisation aligned to the US, whether through directors or founding, “automatically get compliant with … the Cloud Act and the US Patriot Act,” warns Syse. This grants the US government “the ability, based on a court order, to access the data that’s on that platform and switch it off”.
And if you think the Americans are bad, Syse highlights an even bigger risk: sanctions. Companies using Chinese gear could face services being “cut off completely”, with no way to migrate data out.
South Africa lacks clear policy direction on this. A General Data Protection Regulation-style Act was proposed years ago but has stalled. For now, it’s up to businesses to hedge their bets.
A crowded market
Sure, Routed sells a “multi-tenanted all single-tenanted private cloud” service (think infrastructure-as-a-service with “business critical high SLA [service level agreement] type services”). But it’s not alone.
Dell PowerStore offers native migration tools supporting Storage vMotion, promising seamless, zero-downtime moves. For workloads of more than 50TB, Dell Services brings Datadobi tools into play.
Meanwhile, Rudi Mostert, the CTO and co-founder of Warp, has chosen a bold “cloud exit” route, investing in OpenStack and Open Metal infrastructure. This strategy demands deep technical skills in Linux, Kubernetes, networking and orchestration, but Mostert insists that South Africa has “talented people with a hunger to learn and innovate”.
Huawei Cloud is all-in on what it calls “AI-native” solutions, promising to “reshape and upgrade all Huawei Cloud services into intelligent ones using AI” and build “the best platform to accelerate the development of AI”.
A bigger digital dream
The minister of communications and digital technologies, Solly Malatsi, laid out a sweeping vision during his keynote address at Huawei South Africa Connect 2025.
He praised the potential of “technologies like AI, 5G and cloud computing to advance our national priorities”, while insisting these tools must “benefit all our citizens, not just a few”.
By 2029, he plans to achieve “100% connectivity in South Africa” and ensure 70% of the population has basic digital skills. He wants to make South Africa “the most attractive destination for ICT [information and communication technologies] investment on the continent”, driven by policy certainty and reformed procurement.
His Digital Transformation Roadmap, part of Operation Vulindlela Phase II, aims to overhaul public services through digital IDs, a secure data exchange across departments, a real-time payments platform and a single, zero-rated portal for all government services.
What this means for you
Watch your cloud bills: If your business runs traditional apps in the public cloud, check those fine-print costs — surprise charges lurk everywhere.
Think sovereignty: Where your data lives and who can access it matters more than ever. Local private cloud options give you more control (and less geopolitical drama).
Skills matter: Companies going private need strong local IT talent. This is good news for South Africa’s skilled tech workers hungry for challenging projects.
Public cloud isn’t dead: It still makes sense for certain workloads, but a one-size-fits-all approach is over.
Digital future at stake: Smarter cloud strategies help build a stronger, more secure digital economy, and ultimately protect your data and your wallet.
The big U-turn
This repatriation wave doesn’t spell the death of public cloud — far from it. It signals a maturing market. As Malatsi noted, South Africa’s digital ambitions “demand collaboration — across sectors, across disciplines, and across all parts of society”.
Shifting to private cloud is fuelling local talent growth, giving companies “freedom to experiment and build innovative solutions”. With talented people with a hunger to learn and innovate, South Africa can build sovereign, future-ready cloud infrastructure.
The great cloud U-turn isn’t a retreat, it’s more a recalibration — an evolution towards a strategy that values sovereignty and control over the most precious currency of the digital age: data.
