The most famous modern example of repatriation comes from 37signals, the company behind Basecamp and HEY email. Their public, detailed accounting of the decision makes it the canonical reference for this conversation.
The Problem
In 2022, 37signals was spending $3.2 million per year on AWS. Their business was mature. Their traffic was stable and predictable. Their growth was linear, not exponential. Yet they were paying cloud prices designed for companies that need to scale from zero to millions of users overnight — a flexibility they simply did not need.
The Move
They invested approximately $600,000 in purchasing high-density Dell servers (a one-time CapEx expenditure) to replace the rented AWS instances.
- Immediate result: Operational spend dropped by $1 million per year.
- Payback period: The hardware paid for itself in under 7 months.
- 5-year projection: They estimate $10 million in cumulative savings.
Key Lesson
David Heinemeier Hansson (DHH), 37signals' CTO, framed it plainly: "Renting computers is (mostly) a bad deal for medium-sized companies with stable growth."
The critical qualifier is "medium-sized with stable growth." This is not a strategy for a Series A startup that might need to triple capacity next quarter. It is a strategy for a company that has found its steady state and is paying a flexibility premium it no longer needs.
What They Kept in the Cloud
Importantly, 37signals did not exit the cloud entirely. They kept workloads that genuinely benefit from cloud elasticity — things like email delivery infrastructure that must handle unpredictable spikes — in the cloud. This is the hybrid model in practice.