The Days of Private Cloud Are Far from Numbered

A recent topic of discussion in social media circles has been the imminent demise and grieving for enterprise private clouds.  The argument suggests that CxOs will ultimately realize that no business can compete with the scale or resources of large public cloud providers and will therefore eventually join the crowd in adopting public cloud for all their IT needs. Only in a public cloud model, these advocates suggest, can they gain true unit cost advantage as well as the ongoing investment in areas like security that is difficult to manage on their own.

I should start by stating that I am personally a big advocate of public clouds.  They have forever changed the IT landscape and allow small businesses to operate like much larger businesses, despite the disparity of resources or size of their balance sheets.  Perhaps their most significant value is speed. Public clouds help create a much more agile IT platform than most businesses are used to seeing with traditional solutions.

There’s life in the private cloud yet

Despite these significant values, I do not believe we will see the demise of the private cloud any time soon.  Nor do I think will it merely take a back seat to public clouds.  As I have mentioned in the past, I believe strongly in a hybrid cloud model for the foreseeable future. For many businesses, that hybrid model will include aspects of private cloud.  The reasons for this lie in the values that only private clouds can offer and the limitations of public clouds. Five key factors include:

1. Business intimacy: 

Let’s face it, in-depth business and industry knowledge is as critical, if not more so, than IT smarts.  Very few public cloud service providers will have or even aspire to have intimate knowledge about your business. They are in the business of selling utility services and want you tap into their utility just as all their other customers do.  A key question to ask when evaluating public and private solutions is: How important is it to work with someone that knows the specific needs of your business and industry?

2. Application differentiation and customization:

Regardless of the technical elegance of any public infrastructure- or SaaS-based cloud service,a public cloud are is a fairly generic solution that has to be adapted to the unique needs of your business, or to create differentiation in your business applications. A purpose-built private cloud will always give you more ability to customize.

3. Legacy system integration:

The launching pad for public clouds were technology start-ups that could build and scale rapidly using a public cloud platform in order to validate business success. However,most businesses rarely enjoy such a ‘green field’ opportunity; they have the complex task of cross-system design, integration, and interoperability with myriad systems that run their business. As they use elements of public clouds they must always keep an eye towards integration with their legacy systems.

4. Sunk investments:

Having invested heavily in support systems and facilities, businesses face a technology refresh cycle before their CFOs will realistically consider scrapping sunk costs for the sake of migrating applications to public clouds. Making those business cases work considering migration costs is a significant hurdle, especially when you consider the life span of enterprise data center investments.

5. Economics:

Ironically it is assumed that public clouds, with all their scale, offer substantial savings over private clouds, which are asset-heavy. To that I’d say, “Buyer beware!” Granted, public clouds get lots of attention by advertising cheap raw capacity. However it is important to understand what you need and your ongoing usage patterns. It’s also important to consider beyond any one commodity element and across your entire solution to understand total cost of ownership of the application, infrastructure, networking, security and support.

Regardless of where you stand on the public-private cloud debate, It’s critical for all technologists to understand the services that are available. Even if you don’t choose to use them now, many of your competitors will. If you choose to use private clouds in lieu of — or in combination with — public clouds it’s important to do so effectively. To be competitive you will need the agility, on-demand capabilities, and dynamic scalability of a public cloud built into your private cloud model.  In some cases a business will be sophisticated enough to do this for themselves, and in others they will need to turn to a skilled private cloud service provider for guidance.

It’s easy to jump to the conclusion that a powerful new IT model will displace all that has come before, to become the “go to” model for future success. In this case, though, I anticipate a hybrid world comprised of both public and private clouds for many years to come.

What do you think of the public-private cloud debate? Is your organization abandoning private clouds in favor of public cloud models? Why or why not?


Steve Caniano Networked Cloud Solutions Vice President AT&T About Steve