Own vs rent: the real economics of your compute.

The market has already changed its mind.

Quietly, over the last three years, the most cloud-committed operators on the planet started moving workloads back. In IDC's survey, 86% of CIOs planned to repatriate at least some public-cloud workloads in 2025 — the highest rate ever recorded. Only around 8% plan a full exit. The story isn't "cloud was a mistake." It's that the default was.

The waste data explains why. Flexera's 2025 State of the Cloud report found organisations estimate roughly 27% of their cloud spend is wasted — paid for, not used. For a business spending €5,000 a month on cloud services, that's around €16,000 a year buying nothing.

The most public receipt: 37signals.

The clearest documented case comes from 37signals, the company behind Basecamp and HEY. Their cloud bill was running at $3.2 million a year. They spent roughly $700,000 once on their own Dell servers, moved seven applications onto them, and watched the annual bill fall by about $2 million — with five-year savings projected around $10 million, rising further after leaving cloud storage entirely.

They're not alone at scale: Dropbox famously saved about $75 million over two years after building its own infrastructure. The pattern repeats because the economics repeat: steady workloads don't need elasticity — and elasticity is what you're paying the premium for.

Scale the same logic down to a 40-person business and the shape holds: modern server hardware is extraordinarily capable, warranties run five years, and well-specified machines routinely serve seven. Meanwhile the rented equivalent bills you every month, forever.

Capitalise vs expense: the accounting is half the story.

Two businesses run the same workload. One owns the infrastructure; one rents it. Their operations are identical — their accounts are not.

• Owned compute is capitalised. It sits on the balance sheet as an asset and is depreciated over its useful life, typically three to seven years. Depreciation lands below EBITDA.
• Rented compute is expensed. It hits the P&L every month as an operating cost — directly reducing EBITDA, the exact figure your valuation multiple is applied to.

At the multiples typical of UK & Ireland SME transactions — an average around 5.3× in recent lower mid-market data — every €10,000 of recurring compute cost you eliminate is worth roughly €50,000 of enterprise value. That's the multiplication that makes this a shareholder decision rather than an IT preference.

When renting genuinely wins.

Honesty cuts both ways — public cloud and SaaS earn their place in specific, predictable situations:

• Genuinely variable demand. Customer-facing products that scale with usage, seasonal spikes, unpredictable growth.
• Commodity collaboration. Email and file collaboration belong in Microsoft 365 — the economics and security of doing this yourself stopped making sense years ago.
• Early stage. Before your workload patterns are known, renting is the right way to learn them.
• Global distribution. Serving users across regions where owning presence would be absurd.

The destination for most established SMBs is hybrid: rent the elastic and the commodity, own the steady — each workload placed deliberately, with the EBITDA effect on the table.

The five questions to ask.

• Which of our workloads are actually variable? List them. Most SMBs find fewer than they expect.
• What is our all-in monthly rented compute cost? Including the licences and egress fees that hide in the invoice.
• What would the owned equivalent cost — once? Hardware, hosting, and management, over a realistic five-to-seven-year life.
• What's the payback period? For steady workloads it is frequently measured in months, not years.
• What does each option do to our EBITDA? The question your provider should have asked first.

If your current provider can't work through those five with you — commercially, not just technically — that's a signal about which conversation they're equipped to have.