The Cloud Trap Few Saw Coming

When choice turns into constraint — and how strategic leaders are regaining control

When “Digital Transformation” Starts to Feel Like a Toll Road

For the last decade, we’ve all benefited from extraordinary innovation in cloud computing. Elastic scale. Quick deployments. Global reach overnight.

But many technology and finance leaders are now asking a hard question:

If the cloud was designed to accelerate innovation and reduce cost, why does it increasingly feel like a trap?

Just like streaming platforms that lure us with convenience only to slowly chip away value over time, hyperscalers have followed a predictable economic playbook: attract customers with flexibility and favorable pricing, then gradually introduce friction, lock-in, and rising operating costs.

This isn’t mismanagement by IT teams.
It is a commercial strategy — and it’s playing out across industries worldwide.

At STG, we support organizations navigating this experience every day. We sit on your side of the table — helping you understand the landscape, avoid the traps, and build a compute strategy that maximizes flexibility, performance, and control.

The Incentive Problem: A Business Model Designed to Extract Value Over Time

Like any dominant platform, hyperscalers follow three stages:

The Hook — generous pricing, rapid innovation, frictionless onboarding
The Squeeze — gradual price increases, support degradation, opaque billing, proprietary tools that increase dependency
The Harvest — lock-in, limited portability, and cost structures that become harder to unwind each year

What began as a story of innovation has increasingly become one of dependency management — and rising bills without rising value.

An Example: Stretching Infrastructure Beyond Its Intended Life

A lesser-known but telling example: server depreciation schedules. Starting in 2020, major cloud providers extended the “useful life” of their infrastructure — not because hardware became materially more resilient, but because it improved financial optics.

AWS: from 3 → 4 → 5 → 6 years
Microsoft Azure: 4 → 6 years
Google Cloud: 3 → 6 years

This accounting strategy generated billions in operating income. But in practice, aging hardware increases failure risk, operational overhead, and customer exposure.

When latency-sensitive AI workloads entered the mix, the model broke — and hyperscalers reversed course. Performance mattered again, and suddenly infrastructure needed to refresh faster.

The takeaway:
When value extraction conflicts with performance, performance eventually wins — but only after customers absorb increased risk and cost.

Lock-In by Design: Fees, Tools, and Architecture

1. Egress Fees — A Departure Tax

Moving data out of hyperscaler environments often carries a premium 8–12x higher than alternative providers. In many cases, egress fees represent 10–15% of a cloud bill — paid simply to access your own data.

These fees are not aligned with customer value — they are designed to discourage optionality.

2. Proprietary Platforms — Convenience with Strings Attached

Services like Lambda, DynamoDB, and proprietary AI frameworks deliver speed — but embed workloads deeply into closed environments. Migration becomes:

technically complex
operationally risky
financially costly

This is not an accident.
It’s an ecosystem strategy.

The Extreme Case: VMware, Broadcom & a Warning Sign

The VMware/Broadcom shift is widely regarded as a case study in platform lock-in taken to an extreme:

Price increases up to 1,050%
Perpetual licenses discontinued
Partner model reset overnight

If it can happen in virtualization, it can happen anywhere.
CIOs and CFOs are now asking the same question:
How exposed are we — and what does strategic control look like going forward?

Recognizing the Pattern — and Acting Before Pain Arrives

Rising cloud bills, reduced support quality, and unexpected architectural friction are not isolated frustrations. They are structural signals.

And strategic leaders are responding:

86% of CIOs plan to repatriate workloads.
73% already run hybrid.

Names like Dropbox, GEICO, and 37signals are well-publicized examples — but behind the scenes, finance and technology leaders across industries are reevaluating workload placement through the lens of control, performance, and cost certainty.

This shift is not anti-cloud.
It is pro-choice, pro-value, and pro-resilience.

The Modern Model: Strategic Hybrid Cloud

Cloud is extraordinary — when it’s used intentionally.

The highest-performing organizations are:

✅ Keeping elastic, unpredictable workloads in cloud
✅ Running predictable, steady-state workloads on optimized private infrastructure or alternative platforms
✅ Avoiding proprietary complexity where portability matters
✅ Treating cloud as an operating tool — not a destination

This is not “leaving cloud.”It is modernizing cloud strategy.

Conclusion: The Question Isn’t Cloud vs. Not Cloud

The question is control.

If your cloud costs are rising faster than value, you are not alone — and you're not doing anything wrong.

The incentive model shifted.
Now the strategic model must shift too.

At STG, our role is simple:

Evaluate your current footprint objectively
Identify workloads that benefit from alternative execution models
Build optionality and resilience back into your operating model
Serve as a trusted extension of your team — not a reseller incentivized to sell more cloud

Cloud remains essential.
Vendor choice remains essential.
Control is non-negotiable.

The hyperscaler model assumes it is too difficult to leave.
The winning playbook — for finance leaders, technology executives, and boards — is to prove that assumption wrong by design, not by urgency.