Weekly Update

Are Private Clouds Worth It?

The Enterprise Management Associates (EMA), sponsored by Cisco, created a recent research study that focuses on the reasons for adopting private cloud computing.  The results were what you might expect, with 52%-62% of respondents reporting that agility, performance and resiliency, and resource optimization topped the list of reasons that enterprises are moving to private clouds.

A list of applications that respondents planned to host in the cloud included e-mail, CRM, VDI, custom applications, ERP, accounting, HR, telephony, and even older mainframe-based applications.  The private cloud seems like a convenient approach for most within Global 2000 IT, considering that it’s a “cloud,” and also remains in the corporate data centers.  Thus, there is a sense of both security and control.

The use of private clouds has always been a bit of a controversial issue in the emerging world of cloud computing.  When the term was first coined several years ago, and named specifically in the NIST definition of cloud computing, it flew in the face of much of what cloud computing stood for.  This included the ability to share public hardware and software and thus reduce our costs, complexity, and even our carbon footprint.

These days, private clouds are an acceptable architectural approach to leveraging cloud-based technology, and they include systems inside of enterprises that mimic the features of the public clouds.  These features include self- and auto-provisioning of resources and use-based accounting of leveraged services.

However, not all that is sold as “private clouds” are actually clouds at all.  The confusion and hype within this space is to the point of dysfunction.  Most hardware and software providers have used the concept of a private cloud as a convenient way to rebrand their existing enterprise hardware and software products as “a cloud.”   No matter if it provides the accepted capabilities of a cloud-based platform or not.  Thus enterprise IT remains confused.

Last year Gartner chimed in on what private clouds are not, including:

  • Private Cloud Is Not Virtualization
  • Private Cloud Is Not Just About Cost Reduction
  • Private Cloud Is Not Necessarily On-Premise
  • Private Cloud Is Not Only Infrastructure as a Service (IaaS)
  • Private Cloud Is Not Always Going to Be Private

While this is pretty obvious stuff in the world of cloud computing, many enterprises have often mistaken virtualization as private clouds.  Also missed on many occasions is the fact that the true value of private cloud computing comes from the ability to support business agility, which is actually more of a business benefit than operational cost reductions.

Of course, the public cloud providers and software providers offer private cloud versions.  These are either software instances that run within a data center, such as the solutions from Eucalyptus, or versions of OpenStack and CloudStack.  Or, perhaps virtual private clouds that exist in public clouds, with clear firewalls and secure network connections back to enterprises, such as Amazon Web Service’s Virtual Private Cloud (VPC).

The value that private clouds have for your enterprise comes down to a few core questions, including:

  • Will the use of public cloud computing put the business at risk?
  • What is the value that you place on business agility?
  • Will you be able to repurpose existing hardware?
  • How much will the organization have to change?

The use of private clouds typically means that public clouds are not an option due to some kind of security or regulatory concern.  However, in many instances, it comes down to the comfort level of those in IT who are charged with maintaining core enterprise systems.  They just cannot fathom the concept of trusting a third party with their core business processes and data.

If the use of public clouds will truly put the business at risk, or if the cost of risk is too high, then the use of private clouds maybe indicated.  However, this comes at the cost of diminished value for the use of cloud computing technology, perhaps even to a point where no cloud computing technology, public or private, should be employed.

The value of agility varies from company to company.  It’s difficult to say that the use of private cloud technology that may provide additional business agility is always the right choice.  Those charged with selecting a path to private cloud technology should balance the cost of the technology with the ability to quickly align the business to new market opportunities.  Both the cost and the value will vary greatly

Private clouds are internal systems.  Thus, unlike public clouds, you have to purchase, configure, and maintain the hardware and software.  In many instances, there has already been money spent on new hardware, and the more that this hardware can be repurposed for private clouds, the more value that private clouds will bring.

Finally, you need to determine organizational readiness for the use of private cloud technology.  In many instances, the use of a private cloud may be the exact right path to follow, but there is little talent to be found internally around the design, installation, and maintenance of this technology.  Upgrading the expertise with new personnel or consultants is expensive, and seems to be getting more expensive as we progress with cloud-based technology and the demand for talent rises.

So, the worth of private cloud technology is really largely business dependent.  While many in IT see this is a way to “do the cloud, without using a cloud” the value that private cloud technology may bring is not typically as obvious as when using public cloud technology.  You need to run the numbers first.