37signals Dumps AWS: Millions Saved by Cloud Repatriation

2:25 AM | 10 May 2025

37signals Completes On-Prem Move, Deletes AWS Account to Save Millions

Industry ‘pulled a fast one convincing everyone cloud is the only way’ says CTO David Heinemeier Hansson

Web software biz 37signals has started to migrate its data out of the cloud and onto on-prem storage – and expects to save a further $1.3 million (£980,000) a year after completing its high-profile cloud repatriation project and getting off AWS once and for all.

We'll delete our entire AWS account and finally say goodbye to our ~$1.5m/year S3 hosting bill

37signals operates the project management tool Basecamp and a calendaring service called HEY. In 2022 the biz's CTO David Heinemeier Hansson (who created Ruby on Rails) started to quit AWS after being horrified by an annual spend exceeding $3.2 million (£2.4 million).

Hansson compared the cost of running workloads in the public cloud to the sums required to acquire and operate some hefty Dell servers, concluded enormous savings would be possible, and decided to make the move. In 2024 he shared the results of the compute repatriation project: after spending $700,000 (£530,000) on some Dell boxes that run workloads once hosted in AWS, cloud bills fell by some $2 million (£1.5 million) a year.

After that success, Hansson decided to also migrate 37signals’ data from Amazon’s Simple Storage Service (S3) to on-prem arrays provided by Pure Storage. On Wednesday he used LinkedIn to reveal data migration is “about to start.”

That effort is off to a good start because AWS has waived $250,000 in egress fees – the cloud giant’s charge for downloading data. “It took a while to get it approved, but in the end we got it,” Hansson wrote.

“This means we'll be able to delete our entire AWS account this summer when the data is out. That'll be cause for quite some celebration when we finally say goodbye to our ~$1.5m/year S3 hosting bill!” he added.

37signals spent $1.5 million on 18 petabytes worth of Pure Storage kit that Hansson wrote will cost less than $200,000 a year to operate - a savings of $1.3 million a year in operating costs. He predicted those savings will “rack up pretty quick” once Chicago-based 37signals amortizes the cost of the arrays.

“Much easier to swallow than $1.5m/year!” he wrote, before adding that his company’s overall yearly infrastructure bill will drop from a cloudy $3.2 million “to well under a million” on-prem – without having to add extra staff.

“Cloud can be a good choice in certain circumstances, but the industry pulled a fast one convincing everyone it's the only way,” he concluded. “No wonder you see cloud vendors and ads and PR everywhere. There's so much money in convincing everyone that owning your own hardware is impossible or that operating Linux servers is too hard!” ®

The Great Cloud Repatriation: 37signals' Journey Back On-Prem

37signals, the company behind Basecamp and HEY, is making headlines with its decision to move its infrastructure from Amazon Web Services (AWS) back to on-premise servers. This move, dubbed "cloud repatriation," is projected to save the company millions of dollars annually and challenges the widely held belief that the cloud is always the most cost-effective solution.

The $3.2 Million Wake-Up Call

The catalyst for this shift was a staggering $3.2 million annual AWS bill that horrified 37signals' CTO, David Heinemeier Hansson. Known for creating Ruby on Rails, Hansson questioned the cloud's cost-effectiveness and began exploring alternatives. He compared the expenses of running workloads in the public cloud to the costs of acquiring and operating Dell servers, leading him to believe significant savings were possible by bringing their infrastructure back in-house.

Compute Repatriation: The First Victory

In 2024, Hansson shared the initial results of their compute repatriation project. By investing $700,000 in Dell servers to run workloads previously hosted on AWS, 37signals reduced its cloud bills by $2 million annually. This success fueled the decision to migrate their data from Amazon's Simple Storage Service (S3) to on-premise arrays provided by Pure Storage.

Data Migration and AWS's Generous Exit

The data migration process is now underway, with AWS waiving $250,000 in egress fees – the charges for downloading data from their cloud. This gesture significantly eases the transition and allows 37signals to delete its entire AWS account, marking a complete departure from the cloud platform.

The Promise of Pure Storage: A $1.3 Million Annual Savings

37signals invested $1.5 million in 18 petabytes of Pure Storage kit, which Hansson estimates will cost less than $200,000 per year to operate. This translates to a $1.3 million annual savings in operating costs, a figure that will quickly accumulate once the company amortizes the cost of the arrays.

Why Repatriate? Unmasking the Cloud's Hidden Costs

37signals' decision to repatriate its infrastructure raises important questions about the true cost of cloud computing. While the cloud offers scalability and flexibility, it can also lead to unexpected expenses and vendor lock-in.

Challenging the Cloud-Only Narrative

Hansson argues that the cloud industry has successfully convinced businesses that it's the only viable option, often overlooking the potential benefits of owning and managing their own hardware. He believes that the perceived difficulty of operating Linux servers and managing on-premise infrastructure is often exaggerated to promote cloud adoption.

The Allure of Predictable Costs

One of the primary drivers behind 37signals' repatriation is the desire for predictable and lower infrastructure costs. By moving to on-premise servers, the company gains greater control over its expenses and avoids the unpredictable billing cycles associated with cloud services.

Data Control and Security

While not explicitly stated in the article, data control and security are often cited as reasons for cloud repatriation. Some organizations prefer to maintain complete control over their data and security protocols, which can be challenging in a shared cloud environment.

The Future of Cloud: A Hybrid Approach?

37signals' story highlights the importance of carefully evaluating the costs and benefits of cloud computing. While the cloud remains a valuable tool for many organizations, it's not always the optimal solution for every workload or business. A hybrid approach, combining on-premise infrastructure with cloud services, may offer the best of both worlds – scalability, flexibility, and cost-effectiveness.

Key Considerations for Cloud Repatriation

Before considering cloud repatriation, organizations should carefully assess the following factors:

Workload characteristics: Identify workloads that are well-suited for on-premise infrastructure based on their resource requirements, performance needs, and data sensitivity.
Cost analysis: Conduct a thorough cost analysis to compare the total cost of ownership (TCO) of cloud versus on-premise solutions, including hardware, software, labor, and energy costs.
Technical expertise: Ensure that the organization has the necessary technical expertise to manage and maintain on-premise infrastructure, including server administration, networking, and security.
Compliance requirements: Consider any regulatory or compliance requirements that may impact the choice between cloud and on-premise solutions.

The Rise of FinOps: Optimizing Cloud Spending

The increasing awareness of cloud costs has led to the emergence of FinOps, a discipline focused on optimizing cloud spending and maximizing the value of cloud investments. FinOps practices can help organizations identify and eliminate wasted cloud resources, negotiate better pricing with cloud providers, and improve overall cloud financial management.

Conclusion: A Wake-Up Call for the Cloud Industry

37signals' decision to abandon AWS and embrace on-premise infrastructure serves as a wake-up call for the cloud industry. It demonstrates that the cloud is not always the most cost-effective solution and that organizations should carefully evaluate their options before committing to a cloud-only strategy. As more companies begin to question the cloud's dominance, we may see a growing trend towards cloud repatriation and a more balanced approach to IT infrastructure.

The Last Word

The move by 37signals is not just about saving money; it's about challenging the status quo and encouraging organizations to think critically about their IT infrastructure choices. By sharing their story, 37signals hopes to inspire others to explore alternatives to the cloud and find the solutions that best meet their unique needs.