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The Importance of Private Clouds

What is the difference between public, private and community clouds as well as hybrid clouds

Few days ago I noticed a question on a LinkedIn group that made me thinking how important is the notion of private clouds. First, let's briefly look at what is the difference between public, private and community clouds as well as hybrid clouds. Once again those are very well defined in NIST Definition of Cloud Computing but stated with simple words they are:

  • Private Cloud is cloud infrastructure that belong to single organization (enterprise, university, government organization etc.) that is hosted either on or off premise and is managed by the organization or third party contracted by the organization. The key point for private cloud is that the infrastructure is dedicated to this particular organization. Very often though you will notice that the term is used for cloud infrastructure that is hosted in the organization's datacenter.
  • Community Cloud is very similar to the Private Cloud with the difference that instead belonging to a single organization it belongs to a community of customers (can be organizations). You can look at the community cloud as a special case of the private cloud.
  • Public Cloud is a cloud infrastructure that belongs to the cloud vendor and is open for use to the general public. What this means is that any organization or single individual can use the public cloud infrastructure to deploy and run their application
  • Hybrid Cloud is any mix of the above three. However most often the term "hybrid" is used to describe the extension of the private cloud to the public infrastructure for a specific organization.

PrivateSometimes you will also hear the term personal cloud. What it refers to is either a cloud simulation environment or scaled back cloud environment that you can run on your desktop. Personal clouds can also be specialized cloud appliances that are used for in-house development and testing.

Now, let's go back to the private cloud and look at why they are so important.

If you look back in time you will notice that organizations have been developing their own IT infrastructure for years. This infrastructure has been used and continues to be used to host business critical applications for the organization, and will exist for years to come. The two most important reasons why organizations will continue to build and manage their own data centers are:

  • Data sovereignity - they would like to keep business critical data internally and don't expose it through widely available public interfaces
  • Regulations - certain organizations deal with Person Identifiable Information (PII) and must comply with rules like PCI or HIPAA

But there are few others that lot of people do not consider right now.

The first one is the so called "vendor lock-in". With the lack of standardization between cloud providers moving workloads between those is still a hassle. There are of course third party vendors who make the process easier but this is at the expense of a higher price.

This brings us to the second reason that can make private clouds more attractive - the financials or more specifically the Operational Expenses (OpEx). At certain point the benefits of using public infrastructure start to diminish. This happens because the operational cost, although significantly reduced, continues to be carried by the organization (think of managing VMs or applications deployed on the public cloud the same as managing VMs and applications on-premise). At some point though the margin that you pay to the cloud vendor can outgrow the operational cost of managing the infrastructure on-premise. This may not be applicable for a business that runs tens or even hundreds of servers but is certainly true for enterprise that has needs for thousands of servers.

The last is also related to the financials but this time is the Capital Expenditures (CapEx). All this infrastructure that organizations have build over the years still needs to be utilized. They have the choice to continue using it in the traditional way and incur OpEx as until now or repurpose it into private cloud infrastructure and significantly reduce their management expenses.

With all the factors outlined above it is clear that the private clouds will play significant role in the cloud computing trends over the next couple of years.

More Stories By Toddy Mladenov

Toddy Mladenov has more than 15 years experience in software development and technology consulting at companies like Microsoft, SAP and 3Com. Currently he is a CTO of Agitare Technologies, Inc. - a boutique consulting company that specializes in Cloud Computing and Big Data Solutions. Before Agitare Tech Toddy spent few years with PaaS startup Apprenda and more than six years working on Microsft's cloud computing platform Windows Azure, Windows Client and MSN/Windows Live. During his career at Microsoft he managed different aspects of the software development process for Windows Azure and Windows Services. He also evangelized Microsoft cloud services among open source communities like PHP and Java. In the past he developed enterprise software for German's software giant SAP and several startups in Europe, and managed the technical sales for 3Com in the Balkan region.

With his broad industry experience, international background and end-user point of view Toddy has an unique approach towards technology. He believes that technology should be develop to improve people's lives and is eager to share his knowledge in topics like cloud computing, mobile and web development.

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