Welcome!

@CloudExpo Authors: Liz McMillan, Elizabeth White, Pat Romanski, Kevin Benedict, Yeshim Deniz

Related Topics: @CloudExpo, Microservices Expo, Containers Expo Blog

@CloudExpo: Article

Why You Really, Truly Don’t Want a Private Cloud

There’s generally little or no solid business reason to build a private Cloud

The more you focus on the business benefits of Cloud, the more likely you'll be leaning toward public over private deployment models. Furthermore, this mind shift isn't all about security risks. Once you work through the issues, you'll likely come to the same conclusion: there's generally little or no solid business reason to build a private Cloud.

I had the pleasure of speaking at two quite different Cloud Computing conferences last week: Opal’s Business of Cloud Computing in Dallas and UBM’s CloudConnect in Bangalore. As the conference names and locations might suggest, the former was the more business-oriented while the latter was chock full of techies. What I didn’t expect, however, was that the business Cloud crowd had a more mature, advanced conception of Cloud than the technical audience. While the techies were still struggling with essential characteristics like elasticity, trying to free themselves from the vendor nonsense that drives such conferences, the business folks generally had a well-developed understanding of what Cloud is really all about, and as a result, focused their discussions on how best to leverage the approach to meet both tactical and strategic business goals.

Perhaps the most interesting contrast between the perspectives of these two audiences was their respective opinions about private Clouds. The techies at the Bangalore conference, having drunk too much of the vendor Kool-Aid, were generally of the opinion that public Clouds were too risky, and that their organizations should thus focus their efforts on the private deployment model. The Dallas business crowd, in contrast, generally held that the public approach was the way to go, with some folks even going so far as to claim that public Cloud was the only true approach to Cloud Computing.

This distinction is remarkable, and aligns with ZapThink’s thinking on this matter as well: the more you focus on the business benefits of Cloud, the more likely you’ll be leaning toward public over private deployment models. Furthermore, this mind shift isn’t all about security risks. We recently debunked the notion that public Clouds are inherently less secure than private ones, and many people at the Dallas conference agreed. But there’s more to this story. Once you work through the issues, you’ll likely come to the same conclusion: there’s generally little or no solid business reason to build a private Cloud.

The Problems with Private Clouds
The best way to understand the limitations of the private deployment model is to take the business perspective. What are the business benefits behind the move to the Cloud, and how can you achieve them?

  • Cloud will shift capital expense to operational expense – instead of having to invest in hardware and software, you can pay-as-you-go for what you need as an operational expense, and write it off your taxes right away. Except, of course, with private Clouds, where you have to build out the entire data center infrastructure yourself. If anything, private Clouds increase capital expenditures.

  • Cloud increases server utilization while dealing with spikes in demand – instead of setting up a data center full of servers that run idle most of the time on the off chance you need them to deal with the occasional Slashdot post or Justin Bieber tweet, the Cloud improves utilization while its elasticity deals with those annoying spikes. Except, of course, in private Clouds, unless your organization is so huge that multiple divisions look to your Cloud to handle many different spikes in demand, that you fervently hope arrive at different times. But what if that Kim Kardashian visit to your corporate HQ causes traffic to all your divisions to spike at once? Fugeddaboutit.

  • Cloud keeps infrastructure costs very low for new projects, since they don’t have much traffic yet – again, works much better in a public Cloud. How many such projects do you expect to have at any one time? If the number isn’t in the hundreds or thousands, then private Cloud is massive overkill for this purpose.

  • The elasticity benefit of the Cloud gives us the illusion of infinite capacity – infinite capacity is all fine and good, but it’s an illusion. And illusions work fine until, well, until they don’t. Elasticity provides the illusion of infinite capacity as long as there is always sufficient capacity to meet additional demand for Cloud resources. You’ll never consume all the capacity of a public Cloud, but your Private cloud is another matter entirely. It’s only so big. If one of your developers has the bright idea to provision a thousand virtual machine instances or a petabyte of storage for that Big Data project, and your private Cloud doesn’t have the physical capacity to do so, then bye-bye illusion.

  • We already have a significant investment in our existing data center, so converting it to a private Cloud will save us money while enabling us to obtain the benefits of the Cloudin your dreams. One essential requirement for building an effective private Cloud is rigorous homogeneity. You want all your physical servers, network equipment, virtualization technology, storage, etc. to be completely identical across every rack. Look at your existing, pre-Cloud data center. Homogeneity isn’t even on your radar.

  • We don’t want to be in the data center business. That’s why we’re moving to the Cloud – guess what? Building a private Cloud puts you in the data center business!

  • Whatever cost efficiencies the public Cloud providers can achieve we can also achieve in our private Cloud – this argument doesn’t hold water either. Not only to the leading public Clouds—Amazon, Microsoft Azure, Rackspace, etc.—have enormous economies of scale, but they’re also operating on razor-thin margins. Furthermore, if they can wring more efficiencies out of the model, they’ll lower their prices. They’re taking this “price war” approach to their margins for all the regular business school reasons: to keep smaller players from being competitive, and to push their larger competitors out of the business. It doesn’t matter how big your private Cloud is, it simply cannot compete on price.

OK fine, you get it. Private Clouds suck, fair enough. You’ll even buy our arguments that public Clouds may actually be more secure than private ones. But you’re in a regulated industry or otherwise have stringent regulatory requirements about data protection or data movement that the public Cloud providers can’t adequately address. The only way you can move to the Cloud at all is to build a private Cloud.

Not so fast. While it’s true that regulatory compliance business drivers and limitations are becoming an increasingly important part of the Cloud story, any regulatory drawbacks to using public Clouds are essentially temporary, as the market responds to this demand. A new class of public Cloud provider, what is shaping up to be the “Enterprise Public Cloud Provider” marketplace, is on the rise. The players in this space are putting together offerings that include rigorous auditing, more transparent and stringent service-level agreements, and overall better visibility for corporate customers with regulatory concerns.

The incumbent public Cloud providers aren’t standing still either. For example, while Amazon built their public Cloud (and with it, the entire industry) on a “one size fits all” model aimed initially at developers, startups, and other small to midsize companies, they have been working on building out their enterprise offerings for a while now. While you may not be able to get solutions from the big players that meet your regulatory needs today, you can be sure it won’t take them long to figure out how to compete in even the most regulated industries. In a few years, if you look back on your decision to build a private Cloud on the basis of regulatory compliance, you’ll likely feel quite foolish as your competitors who waited will soon have fully compliant public alternatives, while you’re stuck paying the bills on your private Cloud initiative that will have become an expensive money pit.

The ZapThink Take
So, should any organization build a private Cloud? Perhaps, but only the very largest enterprises, and only when those organizations can figure out how to get most or all of their divisions to share those private Clouds. If your enterprise is large enough to achieve similar economies of scale to the public providers, then—and only then—will a private option be a viable business alternative.

In many such cases, those large enterprise private Clouds essentially become community Clouds, as multiple divisions of an enterprise share a single internal Cloud provider that operates much like a public Cloud, albeit for internal use across the enterprise. This community model makes sense, for example, for many federal governments. They can achieve the cost efficiencies of public Clouds while maintaining the control benefits of private Clouds by supporting the Cloud initiatives across multiple agencies.

Virtual Private Clouds (VPCs) also give many organizations the best of both worlds, as they leverage the public Cloud but run logically on your private network. Many hybrid Clouds follow the VPC approach, as hybrid on premise/Cloud models typically leverage private networks. ZapThink predicts this hybrid VPC model will become the predominant deployment model in the enterprise.

Still not convinced? Well, ask yourself why, and the answer is likely to be a question of control. Many executives will still be uncomfortable about public Clouds, even when we address the security and compliance issues that currently face public Cloud providers, simply because they don’t control the public Cloud. Our answer? Distribution of IT control is essential to the ZapThink 2020 vision, and is at the heart of the Agile Architecture Revolution. The Web doesn’t have centralized control, after all, and it works just fine. The app store model for enterprise IT, the rise of bring your own device (BYOD), and the fundamentally mobility-driven architecture of the Internet of Things are all examples of the broader shift to the notion decentralized control over IT. Fighting to maintain control is a losing proposition, and as a result, by 2020, private Clouds will be a mostly-forgotten bump on the road to the next big thing.

More Stories By Jason Bloomberg

Jason Bloomberg is a leading IT industry analyst, Forbes contributor, keynote speaker, and globally recognized expert on multiple disruptive trends in enterprise technology and digital transformation. He is ranked #5 on Onalytica’s list of top Digital Transformation influencers for 2018 and #15 on Jax’s list of top DevOps influencers for 2017, the only person to appear on both lists.

As founder and president of Agile Digital Transformation analyst firm Intellyx, he advises, writes, and speaks on a diverse set of topics, including digital transformation, artificial intelligence, cloud computing, devops, big data/analytics, cybersecurity, blockchain/bitcoin/cryptocurrency, no-code/low-code platforms and tools, organizational transformation, internet of things, enterprise architecture, SD-WAN/SDX, mainframes, hybrid IT, and legacy transformation, among other topics.

Mr. Bloomberg’s articles in Forbes are often viewed by more than 100,000 readers. During his career, he has published over 1,200 articles (over 200 for Forbes alone), spoken at over 400 conferences and webinars, and he has been quoted in the press and blogosphere over 2,000 times.

Mr. Bloomberg is the author or coauthor of four books: The Agile Architecture Revolution (Wiley, 2013), Service Orient or Be Doomed! How Service Orientation Will Change Your Business (Wiley, 2006), XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996). His next book, Agile Digital Transformation, is due within the next year.

At SOA-focused industry analyst firm ZapThink from 2001 to 2013, Mr. Bloomberg created and delivered the Licensed ZapThink Architect (LZA) Service-Oriented Architecture (SOA) course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, which was acquired by Dovel Technologies in 2011.

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting), and several software and web development positions.

@CloudExpo Stories
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
"We're focused on how to get some of the attributes that you would expect from an Amazon, Azure, Google, and doing that on-prem. We believe today that you can actually get those types of things done with certain architectures available in the market today," explained Steve Conner, VP of Sales at Cloudistics, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
"Venafi has a platform that allows you to manage, centralize and automate the complete life cycle of keys and certificates within the organization," explained Gina Osmond, Sr. Field Marketing Manager at Venafi, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018.
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors!
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
We all know that end users experience the internet primarily with mobile devices. From an app development perspective, we know that successfully responding to the needs of mobile customers depends on rapid DevOps – failing fast, in short, until the right solution evolves in your customers' relationship to your business. Whether you’re decomposing an SOA monolith, or developing a new application cloud natively, it’s not a question of using microservices - not doing so will be a path to eventual ...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
We are seeing a major migration of enterprises applications to the cloud. As cloud and business use of real time applications accelerate, legacy networks are no longer able to architecturally support cloud adoption and deliver the performance and security required by highly distributed enterprises. These outdated solutions have become more costly and complicated to implement, install, manage, and maintain.SD-WAN offers unlimited capabilities for accessing the benefits of the cloud and Internet. ...