What is a private cloud?

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Discover its definition, benefits and drawbacks in this concise guide.

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The private cloud as we know it first came onto the scene in 2010 when companies like Microsoft, AWS and OpenStack developed private clouds that were reasonably functional. This is also when OpenStack created an open source, do-it-yourself and free cloud.

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What is a private cloud?

A private cloud is a single-tenant environment, meaning that only one organization uses the infrastructure and directly controls it. It can be hosted and managed in various ways, including utilizing resources and infrastructure that are already on-premises, utilizing separate infrastructure provided by a third-party organization or being enabled solely using virtualization software. Private cloud is one of three main cloud deployment models — private, public and hybrid. There is also multicloud that combines elements of all three.

Benefits of private clouds

Private clouds offer a host of benefits when compared to public cloud solutions. Perhaps most importantly, private clouds deliver higher levels of customization and control. This is due to the fact that private cloud environments are not shared with other organizations in the way that public clouds are. As a result, private cloud users have the ability to configure their applications and systems to meet their specific needs and requirements.

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In addition, private cloud solutions offer better security and compliance with certain regulations. For organizations that handle sensitive data, private clouds can provide an extra layer of protection.

Finally, private clouds are often deployed when public clouds are deemed inappropriate or inadequate. For example, mission-critical workloads exceeding risk tolerance levels may be better suited for private clouds.

Drawbacks of private clouds

Private clouds are becoming increasingly popular as businesses look for ways to improve efficiency and control costs. However, private clouds come with a number of disadvantages.

Increased complexity

One of the biggest challenges with private clouds is increased complexity. Private clouds require significant investment in hardware and software, as well as careful planning and management. As a result, they can be considerably more expensive to set up and maintain than public clouds.

Less scalable and flexible

In addition, private clouds can be less scalable and inflexible than public clouds, making them less able to deal with spikes in demand.

High costs

One of the main cost drawbacks of private clouds is the initial investment that is required for acquisition, deployment and support. For example, a company will need to purchase expensive hardware and software, as well as hire staff with the necessary expertise to maintain the system.

In addition, private cloud systems are typically more complicated than public clouds, which can also drive up support costs, and private clouds often require more maintenance than public clouds, further increasing expenses. As a result, private cloud can be a costly option for companies, especially compared to the pay-as-you-go public cloud model.

Hosted private clouds can also be expensive

Subscription costs of hosted private cloud can sometimes exceed the cost of total ownership. Customers can also face the same problem that public cloud customers encounter with poor configuration, provisioning, and overburdened servers.

These drawbacks have led to a gradual shift to hybrid and multicloud setups. According to the Flexera 2022 State of the Cloud report, 89% of organizations have a multicloud strategy. Out of these, 80% reported having embraced a hybrid cloud strategy, 7% have multiple public clouds, and 2% have multiple private cloud setups.

Types of private clouds

Private clouds differ in hosting and management and provide varying capabilities depending on the organization’s needs. There are four main types of private clouds.

On-premises private clouds

On-premises private clouds are owned and managed by the organization, typically using its own hardware and software. It offers the greatest level of control and customization but also requires significant resources for setup and maintenance.

Hosted private clouds

Hosted private clouds, also known as private cloud hosting, are provided by a third-party vendor where the hardware and software are owned and managed by the provider. This option can be less expensive but may not offer the same level of customization and control as an on-premises private cloud.

Managed private clouds

In managed private clouds, the hardware and software are owned by the organization but managed by a third-party vendor. This offers a balance between customization and control and cost savings.

Virtual private clouds

Virtual private clouds offer organizations access to public cloud resources while maintaining privacy and control through virtual private network technology.

However, the above only categorizes private cloud in terms of hosting and management. Other classifications consider the cloud infrastructure used:

  • Software only: This private cloud uses software to manage and deploy virtualized resources, but does not use dedicated hardware, and it offers lower upfront costs but may have less scalability due to the lack of dedicated hardware.
  • Software and hardware: This private cloud uses both software and dedicated hardware for management and deployment, offering greater scalability but also higher initial costs.

Some prominent private cloud vendors

Some major private cloud providers include Amazon Web Services, Microsoft Azure, Google Cloud, IBM Cloud and VMware. Each vendor offers a range of private cloud options with varying levels of customization and control.

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