Moving an E-Commerce Backend from Cloud to On-Premises, Reducing Hosting Costs by 60%

Client Profile

A Copenhagen-based e-commerce company selling home and lifestyle products across Scandinavia. The team of 90 operates an online platform serving over 200,000 monthly active customers in Denmark, Sweden, and Norway.

Industry E-commerce
Location Copenhagen, Denmark
Company Size ~90 employees
Duration 5 months

Technologies Used

AWS Kubernetes Terraform Ansible

Business Challenge

The client’s monthly cloud bill had grown to over €10,000 as their product catalogue and order volume scaled. Analysis revealed that their backend services — inventory management, order processing, and reporting — ran at predictable, steady loads and did not benefit from cloud elasticity. Only the customer-facing storefront and CDN required on-demand scaling. The challenge was reducing costs without disrupting the customer experience.

Solution

We designed a hybrid architecture, migrating backend workloads to dedicated servers in a co-located data centre near Copenhagen while keeping the storefront, CDN, and payment processing on AWS. Kubernetes provided a consistent deployment layer across both environments. Terraform and Ansible automated provisioning for the on-premises hardware. A secure VPN tunnel connected the two environments with sub-5ms latency.

Outcome

Monthly hosting costs dropped by 60%. Backend services ran on predictable, cost-efficient hardware while the storefront retained full cloud elasticity for traffic spikes during sales events. The hybrid architecture was fully operational within five months with zero customer-facing downtime during the transition.

Process

1

Workload Analysis

Profiled every service by CPU, memory, storage, and network usage over 90 days. Classified workloads as elastic (cloud) or predictable (on-premises candidates).

2

Hybrid Architecture Design

Designed a split architecture with Kubernetes on both sides, connected via secure VPN. Defined clear boundaries between cloud and on-premises responsibilities.

3

On-Premises Provisioning

Provisioned dedicated servers in a co-located data centre, automated with Ansible for OS configuration and Terraform for Kubernetes cluster setup.

4

Service Migration

Migrated backend services one at a time using blue-green deployment, validating each service in the on-premises environment before cutting over production traffic.

5

Database Synchronisation

Migrated databases with continuous replication during the transition period, ensuring zero data loss and enabling instant rollback if needed.

6

Validation and Handover

Ran both environments in parallel for two weeks, comparing performance metrics. Conducted training on the hybrid operations model and monitoring setup.

Conclusion

Not every workload belongs in the cloud. By analysing actual usage patterns and separating elastic from predictable workloads, the client achieved significant cost savings while maintaining performance and reliability for their customers.

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