What is Private Cloud?

October 30, 2018 Jake Fellows

Cloud computing has benefits for numerous types of organizations, but as is the case with many new and powerful technologies, it is easy for those considering adopting cloud to get caught up in the hype that surrounds it. In order to fully benefit from a move to the cloud, organizations must make a number of important decisions.

First, you must decide what kind of cloud environment to adopt. While hyperscale public cloud providers include some famous companies with familiar names, for many organizations, a private cloud is a more appropriate choice.

But what do ’public’ and ‘private’ mean in this context?

‘Public’ cloud is defined by Gartner as “a style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external customers using Internet technologies.” It is generally offered on a pay-per-use model, as a multi-tenant environment, meaning data for multiple organizations may reside on the same physical server. While this can create economies of scale and cost savings, this is not always the case, as explored below.

‘Private’ cloud is defined by Gartner as “a form of cloud computing that is used by only one organization, or that ensures that an organization is completely isolated from others.” It is generally offered as a monthly lease. Because it is dedicated to a single organization, a private cloud can be architected to meet that organization’s specific needs.

A private cloud offers flexibility, cost savings, security, and control benefits. These benefits are particularly valuable for businesses with predictable workloads or customization requirements, and businesses in regulated industries.

The Benefits of Private Cloud

The main benefits organizations can attain by running their IT systems in a private cloud environment are flexibility, guaranteed resource availability, strong security, and regulatory compliance, and in some cases, cost savings.

Many of the benefits of cloud computing are delivered by the virtualization technology that underlies all types of cloud. Most servers are underused, and virtualization provides private cloud users with improved resource utilization, as workloads can be deployed to a different physical server as resource demands change.

virtualization private cloud

One of the reasons this is possible is the flexibility provided by virtualization, enabling multiple applications and even operating systems to operate on the same physical machine. Additionally, if the resource requirements of an application change, the resources dedicated to the particular virtual server that runs that application can be adjusted to meet them.

Liquid Web’s Private Cloud has virtually endless usage possibilities, with the ability to create, move, resize, and destroy any number of virtual instances.

This flexibility and improved resource utilization can help organizations ensure application performance, but also reduce costs by getting the most out of their servers. A private cloud environment will not only save money over a traditional on-premise environment, for some organizations it costs less than a public cloud environment.

Low cost is generally considered to be one of if not the primary benefit of public cloud services, and it undoubtedly provides the greatest cost savings to some organizations. Netflix, for example, is not in a heavily regulated industry, it predominantly runs one kind of workload, and its usage constantly fluctuates throughout every time zone around the world.

Private cloud is actually less expensive for many businesses, as shown by a recent study from 451 Research. Experts suggest that due in large part to hidden charges, including network bandwidth, businesses are often not aware of the total cost of ownership (TCO) of a public cloud until the bill arrives, and the research shows that 41 percent of IT decision-makers find their private cloud to be less expensive than a comparable public cloud. Further, 24 percent said they pay a premium of 10 percent or less for their private cloud, which is well worth it for organizations benefiting from the other advantages of the private cloud.

Security statistics comparing cloud environments can be contradictory or misleading, due to methodological choices such as grouping on-premises and hosted private cloud environments together, or comparing different environments without considering the different types of organizations that use them (as explored below). IT professionals have clear views, however, as research by security vendor Ixia shows 90 percent of them are concerned about data and application security in public clouds.

Ultimately, security and compliance experts tend to recommend private cloud because it can provide security advantages over a public cloud. While any cloud environment requires robust anti-virus and firewall protection, a private cloud runs on certain physical machines, which makes its physical security easier to ensure. Cloud access is also more secure with a private cloud environment because it is accessed through private and secure network links, rather than the public internet.

private cloud is secure

The popularity of private cloud environments for organizations with compliance concerns is partly due to its security and control benefits. Another reason is that service providers offering hosted private clouds can help address significant compliance elements such as HIPAA Compliant Hosting and PCI. Some organizations may have little choice but to utilize a private cloud to gain the advantages of cloud computing while retaining regulatory compliance.

Having at least one more server than required for daily operation of a private cloud builds redundancy into the environment. A redundant server or a storage area network (SAN) enables system maintenance to be performed without causing downtime, and can also significantly improve disaster recovery time. These capabilities enable Liquid Web to provide service level agreements (SLAs) with 100 percent guarantees for all private clouds.

Organizations migrating from a legacy on-premise system often find it easier to deploy their workloads to the private cloud, as it can be customized to support any application. A successful migration is critical to achieving the intended benefits of the new environment, which the higher success rate of migrations to private clouds is another potential cause of a lower TCO than public cloud.

Who Should Use a Private Cloud?

Once an organization has determined its cloud needs and priorities, it can determine if the private cloud is the right kind of IT environment.

For some organizations, the private cloud will be the only realistic option to ensure regulatory compliance. For example, HIPAA requires that “electronic protected health information” (e-PHI) is created, received, stored, and transmitted in a way that ensures its confidentiality, integrity, and availability.

The security and privacy protections of HIPAA were expanded by the Health Information Technology for Economic and Clinical Health Act (HITECH). Liquid Web is HITECH-certified by a third-party auditor, providing organizations with the assurance that their private cloud environment meets the standards specified by HIPAA’s Privacy Rule and Security Rule.

hipaa compliant private cloud

In addition to those with HIPAA or other compliance concerns, organizations with relatively predictable and consistent resource demands should consider using a private cloud. Those organizations are more likely to be able to maximize their resources, and therefore cloud spends, and less likely to take full advantage of the elasticity that is one of the main strengths of the public cloud.

Private cloud should also be considered by organizations that can benefit from the increased flexibility of a virtualized environment. Many organizations, particularly among medium and large businesses, run a variety of different applications, each residing on its own hardware. Virtualizing a server that runs a certain application, such as email, allows the organization to increase or decrease the resources available to it. This enables performance improvements, as servers running more resource-intensive applications are provisioned with more computing power or memory. It also delivers cost savings, as the increased resources are drawn from otherwise-underutilized servers, rather than leased or purchased separately.

To determine if it will benefit from deploying a private cloud, an organization should evaluate its flexibility, security, compliance, and cost requirements. It should also consider the applications it uses and what environment is suitable for them, and its own capacities. A quality service provider offering hosted private cloud solutions can help with these evaluations, and make recommendations specific to the organization.

Ready to Deploy a Private Cloud?

Liquid Web’s Private Cloud is like having your own personal data center that you can control and configure to the needs of your organization. A great solution for resellers, agencies, and enterprises. Or, if you are still not sure what your business hosting needs require, download our Hosting Buyer’s Guide to get more information on the different types of hosting, management levels, and scalability options available to your business.

About the Author

Jake Fellows

Jake Fellows is an Associate Product Manager for Liquid Web's Managed Hosting products and services. He has over 10 years of experience involving several fields of the technology industry including hosting, healthcare, and IT system architecture. On his time off, he can be found in front of some form of screen enjoying movies, video games and researching into one of his many technical side projects.

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