37Signals, the creator of the BASECAMP project management tool, announced that its decision to reject cloud services will result in savings of $10 million over the course of five years. The co-founder of the company, David Hinmeier Hansson, made this revelation in a post on Hey World, urging other companies to reconsider their approaches and “swim against the current.”
Known for its outspoken nature and conflicts with tech giants, 37Signals previously made headlines for switching from Mac to Windows after Apple ceased support for Progressive Web Apps. In a bold move in 2022, the company decided to move away from Amazon Web Services (AWS) cloud services in favor of its own infrastructure.
Hansson explained that the decision was driven by a desire to cut costs and avoid relying on unstable cloud services. Initially projected to save $7 million by purchasing Dell server equipment worth $600 thousand in early 2023, the company revised its forecast by year-end, increasing its savings to $10 million with equipment costs of $800 thousand.
With plans to use the servers for seven years and migrate 10 petabytes from S3 cloud storage to local Pure Storage arrays, Hansson emphasized that while cloud technologies may be suitable for companies experiencing high load fluctuations or in the early stages of development, their dominance is waning.
The trend of companies moving away from cloud services is gaining traction. In March, AWS announced a free data exit option for customers leaving its servers, partly due to European regulatory requirements. Other major players, like Dropbox, are also considering a shift back to local solutions.
Despite the trend, analysts caution against oversimplifying the movement. Lydia Leong from Gartner argues that the “myth of cloud repatriation” is often skewed by biased surveys and anecdotes, pointing out that returning to on-premises solutions doesn’t equate to a wholesale abandonment of the cloud.
Acknowledging competition from local solutions, AWS is focusing on hybrid approaches. Analysts, such as Rich Hoyer from SADA, stress the importance of meticulous planning and cost understanding for success with cloud services, rather than making a blanket decision between the cloud and local infrastructure.
Ultimately, there is no one-size-fits-all solution for every company. The choice between cloud services and local infrastructure should hinge on a comprehensive analysis of the business’s specifics, scale, growth trajectory, and financial capabilities.