What is a private cloud?

Here's a clear definition of private cloud that should help lift some of misconceptions about what private cloud is and is not, and reaffirm that private cloud is definitely not dead.

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Private clouds make efficient use of storage, compute, and memory resources, can provide faster response times for enterprise applications, and help comply with regulations about where data is stored.

What is a private cloud?

The concept of a private cloud is relatively simple and straightforward. NIST defined it in its NIST Cloud Computing Standards Roadmap back in 2013 with this description: “The private cloud infrastructure is provisioned for exclusive use by a single organization comprising multiple consumers (e.g., business units).”

One important aspect of the NIST definition, which has now become accepted as the worldwide standard, is that a private cloud infrastructure does not need to be located on-premises or even owned by the organization that is using it.

Enterprises can enlist cloud services providers like IBM, Microsoft and others to host their private clouds. They can enlist companies such as Amazon (Outposts) or HPE (GreenLake) to build and manage an on-premises private cloud. Or they can take the do-it-yourself approach and modernize their existing data center into a private cloud.

No matter which approach an enterprise takes, one thing is clear: private clouds are on a growth path. IDC predicts that total cloud spending, which includes cloud services, hardware, software, and professional/managed services, will surpass $1.3 trillion by 2025, growing at a compound annual growth rate of 16.9%. Private cloud services, which IDC now calls dedicated cloud, will grow at a faster rate of 31.0%.

Breaking out the subcategory of private cloud infrastructure, IDC reports that spending increased 11.8% to $22.5 billion for the full year 2021. Of that infrastructure, 46% was deployed on customer premises, which means enterprise deployments of private cloud are pretty evenly split between on-prem and hosted.

Private cloud vs. public cloud

The fundamental difference between a private cloud and public cloud is that that all of the resources and infrastructure for a private cloud are partitioned and separate from the public infrastructure. It may be partitioned using software or even fully exist on its own hardware, but the resources for that private cloud are available for the exclusive use of a single customer.

By contrast, in the public cloud, individual customers have their slice of the cloud provisioned for their use, but the resources available to all users within that cloud is shared. Those resources are allocated to individual tenants depending on their cloud use contracts, but multiple workloads from different tenants could be consuming CPU resources running on shared physical servers at the same time.

Of course, the data is logically isolated and provisioned to individual tenants, so one tenant can’t manipulate, read or even know about another’s data, but the overall resource pool they all use is still shared.

Benefits of private cloud

The overall trend is certainly toward enterprises shifting more resources into the public cloud, whether that’s migrating existing apps or adopting a cloud-first strategy for developing new applications.

However, certain government agencies as well as organizations that work in highly regulated industries may be required to have more control over certain types of data than public cloud providers can offer. This includes not just the security around the data itself, but also control over the resources that are hosting them. For those groups, a private cloud may be needed.

There may also be certain legacy systems and programs that would not work well, or at all, within a public cloud instance. But they may be able to run in a private, virtualized environment designed specifically to support them.

In addition to compliance and regulatory concerns, private clouds give enterprises more control over their data and applications. And for companies that are running real-time applications which require low latency, keeping that business process on-premises can provide the type of performance that would be difficult for a public cloud service provider to match.

Challenges of private cloud

Organizations can build and manage their own private clouds, but that is a capital-intensive proposition because in order to create almost any cloud, you need to have a pretty vast computing infrastructure.

A privately owned cloud operating on-premises would need to be able to support technologies like virtualization and software defined networking. It would also need to have a large degree of resource expandability, plus the bandwidth to support both the users and the applications that run within it.

But if an organization has its own data center, configuring those resources to operate as a private cloud is a viable option. For many organizations, the transition to a private cloud occurs as part of a data center modernization effort. Instead of a simple hardware refresh, organizations take the opportunity to add cloud-like features, such as self-service provisioning of resources, containerization, ans data lakes. And on a strategic level, private clouds can serve as the foundation for an enterprise-wide digital transformation.

Private cloud vs. hybrid cloud vs multicloud

Most experts believe hybrid cloud will see the most growth over the next few years. It’s the most flexible type of cloud deployment and is suitable for organizations that are just starting to reach for the clouds while also maintaining a large on-premises infrastructure. It also works for companies that maintain large public cloud deployments, but also need to host sensitive or highly regulated data in a private cloud.

In general, a hybrid cloud deployment can incorporate public clouds, private clouds and on-premises infrastructure. They key to the success of most deployments is a unified management interface where administrators can control everything from a central location. This gives organizations the flexibility to maintain and access their data wherever it can be most effectively stored, used, and protected. That flexibility also translates into cost savings, which is another reason why hybrid cloud deployments continue to grow in popularity.

Another term that applies in the hybrid cloud realm is multicloud, in which the public cloud portion of the deployment is situated within the infrastructure of multiple cloud providers. For example, if an organization uses both IBM Cloud and Microsoft Azure for its public cloud instances, merging them together with other computing resources would result in a hybrid multicloud as opposed to a straight hybrid cloud.

Although they remain functionally the same today as when they were initially conceived, the reasons for deploying hybrid clouds have evolved over time. Initially, they were mostly used to help transform parts of a company’s on-prem infrastructure over to a private cloud and then securely connect to a public cloud so the data could be more easily accessed and used.

These days, the emphasis is on making sure that workloads are portable across every environment, including the new containerized cloud platforms like Docker. A process or workload might even span multiple clouds, automatically spinning up and operating wherever it is most efficient, cost effective or necessary. To some extent this requires a good automation platform, such as Kubernetes.

What are private cloud architectures?

Private clouds share five characteristics with other types of cloud architectures, according to NIST. The first is on-demand self-service, which means that end users from different business units within the company can provision compute resources themselves without asking for permission or assistance from IT.

The second is broad access, which means that private-cloud resources are accessible to end users on a variety of devices, including tablets and smartphones. The third is resource pooling, which is required for the efficient use of compute resources. So, various end users end up sharing resources, but those resources are internal to that company; as opposed to public cloud, where resources could be shared among customers from different companies.

The fourth is rapid elasticity, which enables resources to be scaled up or down as needed and releasing resources for use by others when the need passes.

Finally, private cloud requires a method for measuring usage, whether that’s storage, processing, bandwidth, or the number of user accounts. Whether companies actually take the next step and deploy some type of internal chargeback mechanisms is an individual decision, but companies should be able to track and understand the usage of private-cloud resources. 

How to deploy private clouds

While the technology behind private clouds will likely remain unchanged for the foreseeable future, the way that the clouds get deployed continues to evolve. Many organizations will probably opt for a private cloud that is owned and maintained by a third party.

Some providers even offer highly specialized private-cloud deployments. For example, Amazon’s GovCloud is designed to host sensitive data and regulated workloads while also addressing the most stringent U.S. government security and compliance requirements.

Private clouds can exist either on premises or as a hosted deployment at any of the major cloud providers that offer private-cloud services. This follows the trend that it's not actually the cloud type that is important these days, but instead making sure that all data and workloads are able to go wherever they can be handled most efficiently or where they may be required to reside based on relevant security frameworks or regulations.

Private clouds within public cloud infrastructure may actually have security benefits. The fallacy that public clouds are inherently less secure than private ones has largely been disproven by numerous studies over the years. In fact, a well-maintained public cloud, especially one where the infrastructure is managed by a top-tier provider, is probably going to have all of the latest patches and protections. That likely makes a private cloud deployed within it more secure than a private-cloud instance managed on-prem by a company that doesn’t specialize in cloud deployments or cybersecurity.

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