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In conversation with Philipp Mutschler: Why cloud repatriation is gaining importance
CEO Philipp Mutschler discusses current trends in the software industry
In politically uncertain times, more and more companies are rethinking their IT strategy. Complete migration to the cloud, which was hailed as a future trend just a few years ago, is now proving to be a costly dependency model. The relocation of workloads from the public cloud, also known as cloud repatriation, is becoming a strategic tool for greater control and cost efficiency. Our managing director Philipp Mutschler explains why this paradigm shift is taking place and what role used software plays in it.
What trends are currently driving the software industry and how is the relationship between cloud and on-premise changing?
At the moment, we are seeing a clear trend toward hybrid licensing models—cloud repatriation is becoming increasingly important. Cost pressure on IT budgets is rising, which is driving demand for affordable alternatives. Audit security is also becoming increasingly important. As manufacturers continue to restrict on-premise products, awareness of the secondary market is also growing. Although cloud computing is booming, on-premise remains an integral part of the market, especially in regulated industries.
What is cloud repatriation and why is it becoming increasingly relevant for companies?
Cloud repatriation refers to the relocation of workloads from the public cloud, such as Microsoft Azure, to private clouds or on-premise infrastructures. The aim is to control costs, maintain data sovereignty, and become independent of complex cloud pricing models. Many companies are finding that cloud costs are not as predictable as they had hoped – especially for ongoing workloads. The public cloud is increasingly perceived as a lock-in model, for example with SQL, Exchange, or M365. Repatriation creates strategic options, especially for standard workloads such as file servers, SQL databases, or domain controllers. Technologically, this has long been feasible and often makes economic sense.
We live in politically turbulent times. To what extent are you seeing increasing skepticism among your customers toward US-based cloud providers, and what role does the geopolitical environment play in this?
We are observing growing concern about digital sovereignty: the access options available to US authorities through the Cloud Act are unsettling many customers. GDPR-compliant processing is difficult to implement with purely US solutions, especially in regulated industries such as healthcare or public administration. With the possible end of the Data Privacy Framework in mind, many medium-sized companies are becoming increasingly uncertain – they must increasingly weigh up whether the use of US-based services is still compatible with the GDPR. At the geopolitical level, we are seeing a strengthening of European IT sovereignty through initiatives such as Gaia-X and national cloud programs. Customers do not want to find themselves contractually dependent on a provider that arbitrarily adjusts its licensing models, prices, and migration paths. Pure cloud models are economically opaque, causing customers to lose control. Microsoft's “cloud-only” strategy, according to which Exchange Server SE, for example, is only available as a subscription, is increasingly being critically questioned.
How is the used software market developing?
Demand is stable and growing, especially for standard products such as Microsoft Office and Windows Server. Interest is noticeably increasing in the public sector and among small and medium-sized businesses, and large system houses are also expanding their portfolios accordingly. Used software is increasingly being used as a strategic means of cost optimization, as not every application fits perfectly into the cloud. The price advantages are enormous.
Our customers include primarily small and medium-sized businesses, public sector clients, and international companies that value cost-efficient IT.
What path is Soft & Cloud taking to position itself for the future?
We are continuously expanding our offering – both in the area of on-premise licenses from remarketing and in the area of cloud solutions and license advisory services. In order to serve our customers even better, our partner network is also growing continuously. In addition, we are developing our own consulting products for license optimization, including cloud repatriation. Our goal is to be a comprehensive solution provider for cost-efficient license management – also on an international level. We already work with more than 1,500 specialist retail partners and offer comprehensive support ranging from training to joint marketing campaigns.
What is your conclusion on the current development of the software industry?
The market for used software has long since ceased to be a niche market and is now an integral part of modern IT strategies. With over 4,500 customers, we are one of the leading providers in Europe. For many companies, used software is not a stopgap solution, but the most economically sensible decision. Especially in uncertain times, it offers planning security, full functionality, and independence from expensive subscription models.
