Cloud repatriation: Is the UK really shunning US hyperscalers?

Should US cloud providers be worried? Eight channel partners weigh in

Just when you thought the cloud conversation had settled neatly into a predictable forecast with ‘cloud first’ and ‘born in the cloud’, the barometer shifts again. There’s a new phrase gaining momentum among the IT space: cloud repatriation.

It’s not a mass exodus or a cloud crash landing. But, according to voices across the UK IT channel, it is more of a signal than just chatter.

With the chaotic unpredictability of the Trump administration, businesses are now on high alert of where their data is stored and who has jurisdiction over it.

Call it a realignment, a rebalancing or a pendulum swing, but for every workload soaring into hyperscaler heaven, there are murmurs (and increasingly movements) pulling some of that data and compute back down to earth.

The evidence

Cloud repatriation isn’t a tidal wave. Rather, it’s happening in strategic ripples, ripples that are worth watching.

Recent figures from Asanti found that over half (52 per cent) of UK IT leaders currently using public or hybrid models plan to give US cloud providers the cold shoulder.

The majority of those surveyed cite mounting concerns around data sovereignty (95 per cent) and jurisdiction.

Based on a June 2025 survey of 100 senior IT decision makers, the findings highlight a growing trend towards repatriation and colocation as organisations weigh the impact of geopolitical tensions, vendor lock-in and regulatory scrutiny.

This shift builds on data from Asanti’s 2024 research, which showed that 91 per cent of organisations were already in the process of bringing at least some applications back on-premise or into colocation facilities.

Their reasons boiled down to high recurring public costs for certain workloads in public cloud; limited control and customisation; slow data transfer for real time applications; and security, compliance, and risk management concerns.

Whispers of cloud repatriation can be traced back to earlier than last year.

An Adapt study from 2023 shows that 61 per cent of businesses were considering repatriating off the cloud.

So, it looks like cloud strategies are being reshaped.

Are UK businesses pondering repatriation?

Several British channel firms are seeing cloud repatriation to various degrees - and some not at all.

Axians UK, Lemongrass, SEP2, Computacenter, Trustmarque and Arc are all in camp ‘more people are starting to question it, but fewer are actioning anything.’

“There's no doubt that, as much as the tariffs have spooked people, there always was this growing awareness of dependency on a small number of providers, which in any market raises eyebrows,” says Eamonn O'Neill, co-founder and CTO of Lemongrass.

“Some people are a bit further ahead in discussion, but I would say from our experience so far, it's a very small number of people that have done anything about it.

“But we are seeing an increasing number of people talking about it and want their concerns mitigated.”

Meanwhile Manchester-based MSP Thinc is “definitely” seeing cloud repatriation happening.

On the other end of the spectrum, DoiT is not witnessing significant changes or customers questioning the AWS, Google Cloud, and Microsoft partner around this.

“It’s one of those things that comes up time and time again, and with good reason. Depending on the market is dependent on the importance,” its global VP of sales, EMEA & APAC James Moore says.

“North EMEA countries are a bit more conservative and have more specific regulations around data sovereignty.

“I think it depends on the use case. If you're operating in a regulated industry, public sector for example, then it's more pertinent.”

So maybe it’s less of a revolution and more of a rethink – a recalibration of cloud strategies as customers mature, costs evolve and geopolitical uncertainties complicate decision-making.

Continue reading to hear what is currently driving cloud repatriation...

What’s driving it?

It’s easy to assume that geopolitics is the main driver – and while it’s part of the conversation, it’s not the whole story.

One of the driving forces is a better understanding of cloud models.

As Ian Parker, senior consultant at Axians UK explains, businesses that went cloud first early have now got to the stage where they're reevaluating and are naturally trying to optimise where possible.

“I think the conversation has shifted from cloud first to right workload, right platform.

“At the end of the day, you've got to optimise. Putting everything in the cloud is probably not the best way that can happen for various reasons like cost modeling and operational complexity.

“I think the Trump administration is an element in the conversations around cloud repatriation to a certain extent, but people won’t react from that perspective.”

There is no doubt that many organisations have moved a substantial amount of their technology estate to cloud at great pace and perhaps on occasion, without adopting a top-down, application-led approach, Paul Nearn, chief technologist – cloud at Computacenter states.

As a result, some of these workloads were not fully optimised for the public cloud, prompting some organisations to re-validate their approach at a later stage, Nearn says.

“We are observing that this validation is taking a few different forms, such as a rebalancing of some workloads where organisations are adopting a cloud ‘smart’ approach, placing applications into the most natural home for them.”

He adds it’s worth noting that beyond the headlines of repatriation, there are some subtleties to this activity, such as an increased move to SaaS and a rise in the retirement of workloads that shouldn’t have been moved in the first place.

SEP2 co-founder and CEO Paul Starr has observed something similar.

“I am seeing more SaaS adoption than ever, and with the increasing adoption of AI into organisations we are likely to be tied to some form of cloud computing for the ease and scale of these high compute resources. However, this will come with a high unforeseen cost.”

Mark Darrah, cloud practice lead at Arc also sees AI as an influential factor.

“AI has driven people to think about where - and, perhaps most importantly, who - has access to their data. This has led to organisations taking a real assessment of their data and data transfer processes internationally.”

Cost is another factor leading the charge.

“Latency and costs are the biggest concerns,” Darrah continues. “Edge server computing is certainly taking a turn, meaning some services are being brought back to the local LANS to help improve performance due to latency and also due to costs.”

“Repatriation is largely driven by total cost of ownership,” says Richard Stathers, operations director at Thinc. “There’s a deeper understanding of cloud models, allowing buyers to make more informed choices.”

Several channel execs point to the moment of clarity that comes when customers realise their ‘lift and shift’ approach to cloud didn’t magically reduce their bill.

“Quite often customers have made the jump to one end or the other of the cloud vs on-prem spectrum, without sufficient due diligence or planning,” notes Neel Dev, practice director for cloud services at Trustmarque.

“There has also been a misconception that moving workloads to the cloud always leads to cost savings. If migration is not coupled with planning and modernisation, then costs can often spiral out of control. This has been one of the drivers of moving certain workloads back to on premises from the cloud.”

On the next page: Partners discuss data sovereignty...

Sovereignty, security and the big US of A question

For some, repatriation is less about pounds and pence and more about data sovereignty and risk mitigation.

It’s less “cloud is too expensive” and more “where exactly is our sensitive data?”

Even the European Commission has been negotiating with French provider OVHcloud to rescue it from Azure Cloud following concerns raised by a US executive order that led to the shutdown of Microsoft services for an employee of a European-based institution.

“It can come down to regulations,” Axians UK’s Parker states. “Some countries have different regulations and compliance for certain things. And of course, the government is upstepping their cybersecurity governance, guidance and compliance to prevent these threats from happening.

“From my experience it’s more about control.”

But looking into smaller alternatives as the European Commission is doing has its own drawbacks.

“The question I get most of the time is, how reliable are these smaller organisations in Europe?” says Parker.

“We know very well how Microsoft operates. Microsoft is huge and has a lot of resilience built in.

“European cloud providers are still quite immature vs the American ones. Meaning they’re more expensive, have fewer services, are less easy to use, less resilient, and less secure.

“So people are torn between moving to something which may be less stable, or at least, is slightly unknown, and staying with Microsoft and hope that sense prevails.”

Click next to hear whether US hyperscalers should be concerned...

Should the US hyperscalers be worried?

“I think so, and I think they are, which is evidenced by Microsoft banging the drum about their data sovereignty programmes,” says Axians’ Martin on the tech giant’s June announcement of its new sovereign cloud services for Europe.

“But is there a risk of seeing a complete failure of one of these big organisations? No.”

SEP2’s Starr also doesn’t predict the complete removal of Microsoft, Google and AWS from the EU/UK market, but does believe there will be providers who capitalise on this potential to provide more EU/UK focused services. But this will be measured in years, not months.

“However, conversations are happening and therefore we need to take this interest seriously and help educate customers on how we might be able to better protect their data and IP within these environments, rather than making sweeping statements like on-prem first,” Starr urges.

O’Neill of Lemongrass also doesn’t believe repatriation is a threat to the hyperscalers.

“I think the momentum is strongly a tailwind for AWS, Microsoft and Google,” he says.

But he does acknowledge some flaws of their reliance.

“There’s concern about dependency on a small number of providers,” he says.

“There’s basic tech resilience, the idea that if you’ve got one solution looking after everything then that’s a point of vulnerability.

“It creates a point of vulnerability. If that gets hacked, are all your eggs in one basket?”

Coming up: What will the future of cloud look like?

Is this a pendulum or a U-turn?

That depends on who you ask.

O’Neill is in the former camp: “Think of it like a pendulum. If the left side is on-prem and the right is cloud, we’re still moving toward cloud. Some workloads might go back, but the momentum is still very much toward cloud.”

Parker, on the other hand, has a more nuanced take, rooted in two decades of industry shifts: “It’s an evolution. First, there’s excitement and over-adoption. Then, fine-tuning. We’ll see more hybrid – maybe a 70/30 cloud/on-prem split. Public cloud may get smaller, but it’s not disappearing.”

Nearn echoes this sentiment: “We call it a ‘cloud smart’ approach. Place applications into the most natural home – whether that’s public cloud, private, or even edge.”

It’s less about moving off cloud and more about moving towards maturity.

Continue reading for the channel partner opportunity...

What does this mean for the channel?

If you're a partner in the UK channel and haven’t at least heard the words ‘cloud repatriation’ in a boardroom lately, consider this your wake-up call. This isn’t a trend to chase, but it is an ongoing conversation.

“Partners should be having these conversations,” says Martin at Axians. “Not panicking. Not flogging something new. Just asking clients what they’re worried about.”

O’Neill from Lemongrass agrees: “All change creates opportunity. But don’t push sovereign cloud on a customer who doesn’t understand it. Partners need to give honest advice.”

Thinc’s Stathers puts it plainly: “For partners able to scale, this is a chance to offer cost-effective private or hybrid cloud solutions. Those without the scale can still seize the opportunity through partnerships or value-added services.”