Mid-market tech companies shift from public cloud to bare metal

Mid-market software companies are increasingly transitioning from public cloud providers to bare metal infrastructure to manage rising costs. While hyperscalers like AWS, Azure, and Google Cloud offer scalability and convenience for hyper-growth startups, companies with predictable traffic patterns are finding the premium costs for elasticity and managed services unsustainable.

Key financial drivers for this shift include high markups on compute instances and significant egress taxes. Data transfer costs, particularly when moving data out of a cloud ecosystem, represent a major impact on profitability for companies with stable usage baselines. For example, some B2B platforms report that a significant portion of their cloud expenditure is driven by outbound bandwidth and managed database instances rather than core compute needs.