The disclosure provides an approach for transferring files to cloud storage so as to reduce usage of on-premise storage units, and for dynamically reading ahead from cloud storage to improve read performance. In one embodiment, each storage unit in an on-premise storage system is considered independently, and a decision made to move files from a storage unit to cloud storage when utilization of that storage unit reaches an associated mid-water-mark. In particular, files may be transferred beginning with least-recently accessed and smallest files and proceeding until utilization percentage of the on-premise storage unit decreases to an associated low-water-mark. In addition, while files are being transferred to cloud storage, additional files may be written to the on-premise storage unit until an associated high-water-mark is touched, at which point any further writes are redirected to the cloud storage until usage of the on-premise storage unit is reduced to the low-water-mark or more.