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What is Private Cloud? A Deep Dive

Answering "what is private cloud?" starts with understanding abstraction, as well as single versus multi-tenant infrastructure. Join us as we investigate this type of cloud computing.

Michael Nicholson

Michael Nicholson

Cloud Solution Engineer

What is Private Cloud?

Private cloud is a form of cloud computing where resources are owned by and dedicated to a single-tenant.

Private cloud enables organisations to leverage the abstraction and flexibility of cloud computing without sharing the infrastructure with other organisations. At a high-level, private cloud generally offers more control and more potential security than public cloud. However, private cloud also usually comes with more capital costs and management complexities than public cloud.

Here, we’ll take a closer look at private cloud, the pros and cons of different types of cloud computing, and help you decide if private cloud is right for you. As a bonus, we’ll also explain why – despite what you may have read on IT forums – “private cloud” isn’t an oxymoron. To do that, we need to take a step back and consider what is – and isn’t – cloud infrastructure. So, let’s dive in!

Understanding Private Cloud infrastructure

Controversial take: cloud infrastructure isn’t about where the resources are located. It’s about how resources are presented to end-users.

That’s controversial because we live in a world where “the cloud is the Internet” is a common way to explain things to beginners and “the cloud is just someone else’s computer” is a popular tech meme. While those oversimplifications are fine for non-technical audiences, they don’t get at the core business benefits of the cloud when we want to look deeper.

So what defines a cloud infrastructure? In a cloud infrastructure resources are abstracted by a software layer and made accessible over a network. With a public cloud, the resources are owned by a third party (e.g. AWS, Azure, Google Cloud Platform or private servers) and “the network” is usually the Internet. With a private cloud, the resources are dedicated to a single-tenant and accessed via an intranet.

However, in both cases, the secret sauce is the abstraction layer. It makes it possible for organisations to leverage UIs and APIs to get the functionality they need without the complexities of cloud infrastructure management.

For example, AWS EC2 instances are effectively the same compute resource as an on-premises virtual machine. The business value of EC2 instances is that you can easily spin them up or down and configure them using the AWS console or APIs. This provides end-users with flexibility and scalability that isn’t possible with traditional bare-metal servers or hypervisors.

However, using AWS over the public internet is just one example. It’s possible to leverage platforms such as Divio to create the abstraction layer required for “cloud infrastructure” on a private network. And creating this abstraction layer on-prem offers enterprises a unique set of benefits, which leads us to…

The benefits of Private Cloud

Private cloud offers businesses a unique combination of control, privacy and flexibility. A private cloud abstraction layer for on-premises compute, storage and network resources enables organisations to provide the agility and flexibility of cloud computing without the potential risks of multi-tenant infrastructure. Let’s take a closer look at private cloud’s benefits.

Improved control and customization

With private cloud infrastructure, the enterprise dictates the architecture from the ground up. This offers enterprises the ability to customise their infrastructure to meet business and data security requirements in a way that may be impossible with public cloud solutions. A textbook example of this benefit is virtual machine sizing. With public cloud providers you can pick from a variety of predetermined CPU, RAM and storage capacities that are suitable for many common use cases. However, you’re still constrained by the options the public cloud provider makes available. With private cloud, you can go a step further and fine-tune resource allocation to meet specific application requirements with precision.

Privacy from isolated single-tenant infrastructure

In general, public cloud providers do an excellent job of maintaining their side of the shared responsibility model. However, traditional hyperscale public cloud platforms are also inherently multi-tenant and that means enterprise resources are shared across customers (e.g. AWS EC2 spot instances). This can lead to data sovereignty and security concerns that are inherent to shared infrastructure. Isolated and dedicated public cloud resources (e.g. AWS EC2 dedicated instances) have emerged as a method to address this challenge in public clouds. With private cloud, the infrastructure is always dedicated to a single organisation and completely isolated from other parties. In both the case of dedicated and isolated public cloud infrastructure and private cloud, the additional isolation allows enterprises to achieve compliance and security objectives that can’t be achieved on shared infrastructure.

Flexibility and more efficient resource utilisation

Private cloud isn’t the only on-premises approach enterprises can use to isolate their workloads on-premises. The traditional approach of running bare-metal servers and network infrastructure is also an option. However, managing individual servers isn’t as flexible or efficient as using a private cloud abstraction layer. For example, running workloads on dedicated servers means that all the resources of that server are often used for a single business app, regardless of utilisation. Additionally, the availability of the business app is dependent on specific servers. With private (or public) cloud, not only are the underlying server hardware resources abstracted away, but so are the servers themselves. As a result, apps can seamlessly move from server to server without impacting business users.

Is a Private Cloud right for your business?

There’s no one-size-fits-all answer to deciding whether or not to use a private cloud. Private cloud has its benefits, but there are tradeoffs in the form of cost and complexity. For many enterprises, some workloads are best suited for private cloud while others are ideal for public cloud. Additionally, the tradeoffs between public and private clouds aren’t binary. Rather, they exist on a spectrum where costs (particularly CapEx) and infrastructure management complexity, as well as privacy and control, are correlated.

To put it another way, while public cloud solutions like SaaS apps are zero CapEx and zero infrastructure management, they offer you very little control and are almost exclusively multi-tenant backends. On the other end of the spectrum, isolated private clouds are expensive to build and maintain but give you complete privacy and control over the infrastructure.

So, how can you decide if a given use case calls for a private cloud? Evaluate it across these three criteria.

Level of control

“Control” should be viewed through the lens of both functionality and data security. Understand what level of customization your business apps require from a functionality perspective. If you can perform all the required business functions with existing public cloud solutions, you may not need a private cloud. However, from a security and compliance standpoint, regulatory requirements for data sovereignty may dictate that multi-tenant platforms you don’t control are a non-starter.

Level of isolation

Do your security or regulatory requirements dictate that your data must reside on infrastructure you control? Would “noisy neighbour” problems cause performance issues you cannot tolerate in production? If so, the complete isolation of a private cloud may be the answer.

Level of cost

CapEx is the obvious cost of private cloud. You’re responsible for the server, storage, networking, power cooling and additional labour resources to run the infrastructure. However, there are also operational complexities such as patch management, hardware lifecycle management and infrastructure monitoring. At large scales, the upfront investment in private cloud might make sense from a pure cost perspective, but in most cases you’ll need to weigh the upside of private cloud against the additional cost and complexity.

If the business requirements call for high levels of control, customization or isolation, private cloud is probably the right choice. If you can get by with an off-the-shelf public cloud solution, the additional cost and complexity of a private cloud probably isn’t worth it.

Final thoughts: Balancing cost, control and complexity

As we can see, private cloud isn’t an oxymoron because cloud infrastructure is about abstraction, not location. Once you understand the answer to the “what is private cloud?” question, you can see that single-tenant private clouds offer enterprises the flexibility of cloud infrastructure while giving them more control than they could achieve on a multi-tenant public cloud platform.

However, going the private cloud route comes with CapEx and management complexity tradeoffs, and it isn’t right for everyone. You have to understand the tradeoffs and make the right decision for your use case. If you can get the tradeoffs right, you can help your organisation optimise the scalability, control and security of your infrastructure. In many cases, enterprises have found that a mix of public and private cloud solutions is what works for them.

For example, workloads subject to strict data security requirements may reside in an isolated and dedicated public cloud or run on private cloud infrastructure while other business apps are offloaded to the public cloud. Integrating and managing these multi cloud environments can become complex, and that’s a challenge Divio was purpose-built to address.

Divio makes it possible to unify on-premises private cloud and public cloud resources, and manage and deploy workloads across clouds from a single consistent interface.


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