Industry executives and experts share their predictions for 2027. Read them in this 19th annual VMblog.com series exclusive.
By James Mercer, Principal, Metro Colo Advisory
For most of the past decade, the infrastructure question has been framed as a choice: stay in the public cloud or leave it. That framing is breaking down. The companies making the best decisions today are looking hard at which part of their usage runs every hour of every day, and asking whether they are paying cloud prices for capacity they could rent or own for less. In 2027, several forces arrive at once to put that question on more agendas: a hard deadline in European law, a power market with almost nothing left to lease, a memory shortage, and a steady run of VMware renewals. Here is where I expect it to go.
1. Partial moves replace the all-or-nothing exit
Full cloud exits make headlines, but they are rare and hard to pull off. The pattern in the data is narrower. In a Cloudera survey of 1,500 IT and data architecture leaders fielded in June 2026, 66% said their organizations had moved AI workloads from public cloud back to private cloud or on-premises infrastructure in the past year. Yet hybrid environments were still the most cited place to run AI inference. Companies are placing workloads rather than picking a side. In 2027, selective repatriation becomes the default plan: move the steady core of the largest workloads, and keep bursts, experiments and hard-to-replace managed services in the cloud. The projects that disappoint will be the ones that size owned infrastructure for peak traffic and then watch it sit idle most of the year.
2. Leaving gets cheaper on January 12, 2027
From that date, the EU Data Act bars cloud providers from charging switching fees, including data egress charges, to customers moving to another provider or to their own infrastructure. The large providers began waiving egress fees for departing customers in 2024, but those waivers come with conditions and have to be requested. A legal requirement is different. Next year, exit costs become a standard line in cloud renewal negotiations, and companies with European operations will use the new rules as leverage well beyond the EU.
3. Power, not price, decides where workloads land
CBRE’s report for the first half of 2026 put vacancy in Northern Virginia, the largest data center market in North America, at 0.2%, with 10.8 MW available. Across the primary markets, vacancy was 1.4%, more than 80% of capacity under construction was already preleased, and average asking rents rose for every major deployment size. Hyperscalers and AI tenants will keep absorbing the large blocks. The squeeze in 2027 lands on the mid-size buyer who needs a few hundred kilowatts to a couple of megawatts on a fixed timeline. Expect more of those buyers to land in secondary markets, and more to rent capacity from providers that already hold it rather than wait in line for space in a top-tier market.
4. Memory prices make “rent first, buy later” the smart sequence
On Micron’s latest earnings call, its CEO said memory and storage supply will be “much tighter in calendar 2027 and 2028 than they were in 2026.” Server memory prices have already climbed quarter after quarter, which raises the cost of buying servers just as more companies want to own them. In 2027, bare metal, meaning rented dedicated servers, becomes the common first step out of the cloud. It needs no capital, can often be live in weeks, and proves the savings on real traffic. Once the numbers hold, the steadiest load can move to owned hardware when pricing eases. Right-sizing helps as well. Counterpoint Research says enterprises often waste 30% to 50% of memory by provisioning for peaks that rarely occur.
5. Every VMware renewal becomes a placement decision
In CloudBolt’s January 2026 survey of 302 North American enterprises, 86% said they were reducing their VMware use and 59% had seen price increases above 25%. Yet only 2% had moved three quarters or more of their environment. Exits are happening one workload at a time, on three-year renewal cycles. That makes each renewal a natural moment to ask a bigger question than which hypervisor to run: where should this workload live at all? In 2027, more teams will treat a VMware renewal as the trigger for a placement review that weighs public cloud, bare metal, colocation and private cloud together.
6. Finance makes the call
Infrastructure placement used to be settled in architecture reviews. It is moving to the CFO’s office. In the same CloudBolt survey, 41% of IT leaders reported more executive pressure on their VMware strategy, led by the CEO, the board and the CFO. Owned hardware also changes how costs show up: depreciation sits below EBITDA, so a move can improve EBITDA by far more than it reduces total cost. For companies preparing for an IPO or a sale, that difference matters. Next year, more of these decisions will be built in finance models that put the EBITDA view and the fully loaded view side by side.
7. One number decides it
The single most useful figure in these analyses is the steady share: the portion of a workload’s usage that runs in nearly every hour of the year, measured from twelve months of hourly data. It sets how much can move, how many servers are needed and how quickly a move pays back. In 2027, the steady share becomes the standard opening measure for placement decisions and the first number serious buyers ask for. At Metro Colo Advisory, it is the first thing we measure, before any provider is contacted.
None of this means the public cloud is losing. It remains the right home for variable demand, fast experiments and services that are hard to rebuild. What changes in 2027 is the question being asked. The companies that come out ahead will not be the ones that left the cloud. They will be the ones that measured what never sleeps and moved only that.
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ABOUT THE AUTHOR
James Mercer is Principal at Metro Colo Advisory, an independent data center consulting and advisory firm. The firm helps companies decide where their infrastructure should run and represents them with colocation, bare metal and cloud providers. Metro Colo Advisory does not own data centers. https://metrocoloadvisory.com/
