The meteoric rise of the public cloud has certainly created pressure for companies with existing IT infrastructure and data center operators to emulate the speed and efficiency of Web-scale providers. Public clouds make it incredibly convenient to spin up developer resources in an instant, creating pockets of "shadow IT" and leaving on-premises hardware underutilized. But as more and more internal users forego on-prem infrastructure resources to flock to the public cloud, costs can quickly escalate with the pay-as-you-go model and extensive utilization.
"Even just taking the sticker price of a medium virtual machine running 24x7, associated with 50GB of storage and a 5 percent to 10 percent growth rate, and snapshots and operating system licenses, you can start to see how quickly that stuff starts to add up," stated Gartner analyst Kyle Hilgendorf, according to TechTarget.
Granted, the public cloud's near-infinite elasticity and scope make it incredibly appealing, especially to startups that are reticent to spend precious budget to manage their own infrastructure and who have an acute need for resources that scale as smoothly as possible alongside operations. There's the perception that public cloud is inherently cheaper than private cloud if only because the expenses are small chunks of OPEX rather than large CAPEX outlays on servers and equipment.
But is private cloud really that costly relative to public cloud? It is easy for customers to end up paying hundreds of thousands of dollars a month just to run non revenue-generating operations on someone else's infrastructure. Plus, while the private cloud may have been beyond the means of many companies in the past, it is increasingly affordable now due to open source software and better tools for automating development, testing and deployment.
3 Reasons for Choosing Private Cloud: Security, Performance and Cost
As a set of systems under the direct management of the organization rather than an external provider, the private cloud is definitely attractive to anyone with high data security or compliance requirements. Trend Micro solutions architect Udo Schneider told ComputerWeekly that keeping assets in house has strong appeal for companies that fear losing control over key assets.
Security isn't the only reason to pick private cloud, though, even if it is one of the most commonly cited ones. Far from being a cost center, today's private cloud can enable fuller utilization of IT and stable costs over the long term.
"In some cases, enterprises and government agencies cannot get the hardware or infrastructure that a particular application needs from a public cloud provider," XC Cloud Solutions CEO Sean Mathieson told ARN. "[S]ecurity or governance issues [also] force enterprises and government agencies into using a private cloud."
More specifically, paying the upfront cost for a top-flight server can turn into a sound investment. Dev/test and operations teams retain control over infrastructure and be confident in what level of performance to expect.
Public cloud instances may be inexpensive at first or in moderation, but they can become more difficult to deal with as requirements change and overall utilization - not just by one organization, but by many others accessing the same machines - fluctuates. Reliability may degrade from one day to the next, incurring significant costs in terms of lost business opportunities, service outages and damage to brand reputation.
Private Cloud as a Complement to Public Cloud
Open source software and rich functionality has made private clouds easier than ever to set up, manage and get good ROI on. Moreover, companies no longer have to make a stark choice between public and private cloud - the two can work together as part of a hybrid cloud computing architecture that leverages the best features of each in workflows such as cloud bursting.
"It's much cheaper for companies to spike at peak loads to a public cloud than trying to plan a complete transition to a public cloud," wrote Cloudyn CEO Sharon Wagner for VenutreBeat. "From a financial perspective, enterprises will maximize existing investment in their data centers."
Hybrid cloud showcases the best of private cloud, namely security, control and the ability to keep costs in check by running particular workloads internally. According to Gartner, more than half of large enterprises will have a hybrid cloud in place by 2017, underscoring the importance of private cloud within the IT environments of the future.