What Is Private Cloud? 6 Key Benefits of Private Clouds

Private cloud is when a single business entity or end-user has sole access to the hardware and software resources designated in a specific cloud computing environment. Private cloud is similar to other forms of cloud environments in that it offers virtualized resources via physical components. Private cloud environments can be hosted at an organization’s on-site data center, although more organizations are turning to third parties that either act as a colocation facility or are providers of hosted private cloud services.

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 the cloud to get caught up in the hype that surrounds it.

To fully benefit from a move to the cloud, organizations must make a number of important decisions. In this resource, we’ll touch on:

• How private cloud works.
• The difference between public and private cloud. 
• The advantages and disadvantages of private cloud. 
• Examples of private cloud.

How Does a Private Cloud Work?

To get a thorough grasp of how private cloud works, it's important to revisit the concept of virtualization, since it forms the backbone of cloud computing. Virtualization is the process of creating virtual versions of things like operating systems, storage devices, servers, or network resources, hosted all within a cloud environment. IT organizations leverage the practice of virtualization to achieve greater efficiencies and economies of scale. 

A private cloud server is an isolated (otherwise known as single-tenant) and secure environment made up of resources pooled from multiple servers using virtualization. This type of cloud is only available to select organizations rather than the general public and, at the same time, ensures that those organizations are sufficiently isolated from each other. It is generally offered as a monthly lease.

In terms of who manages these environments, that can depend on who has official ownership of that private cloud server. As mentioned previously, private cloud servers can either be on-site or hosted on a cloud provider’s infrastructure/off-site data center. 

Public vs Private Cloud

As opposed to a private cloud, a public cloud can offer a shared cloud computing environment among several users (also known as multi-tenant environments). 

In a public cloud model, framework and resources are supplied by a major cloud solution provider (CSP) or a third-party provider. A few of the larger public cloud providers include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, among others. One of the major advantages of using public cloud is that these solutions offer a pay-as-you-go model for users. Organizations can scale their resources relative to their own growth, but this can lead to hidden costs over time. 

So while public cloud can offer increased scalability as the business grows its needs, private cloud offers increased isolation and compatibility with more types of workloads. 

Advantages of Private Cloud

The six main advantages of private cloud that organizations should know include predictable server usage, improved resource utilization, reduced costs, increased security, regulatory compliance, and more flexibility.

1. Predictable Server Usage

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 spending, and less likely to take full advantage of the elasticity that is one of the main strengths of the public cloud.

2. Improved Resource Utilization

Many of the benefits of private cloud are delivered by the virtualization technology that underlies all types of cloud computing. Most servers are underused, and virtualization provides private cloud users with improved resource utilization, meaning workloads can be deployed to a different physical server as demands change from services. Alternatively, resources dedicated to the particular server can also be adjusted to meet the changing demands of any specific application.

3. Reduced Costs

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-premises environment, but for some organizations, it costs less than a public cloud environment.

Low cost is generally considered to be the primary benefit of public cloud services, and it undoubtedly provides 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. Therefore, public cloud services make sense for companies such as Netflix.

Private cloud computing, especially if it’s running on single-tenant dedicated VMware, 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.

4. Increased Security

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, research by security vendor Ixia shows that 90 percent of them are concerned about data and application security in public clouds.

Ultimately, security experts tend to recommend a private cloud because it can provide security advantages over a public cloud. While any cloud environment requires robust antivirus 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.

5. Regulatory Compliance

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 Compliant Hosting. Some organizations may have little choice but to utilize a private cloud to gain the advantages of cloud computing while retaining regulatory compliance.

6. Legacy Application Compatibility

Organizations migrating from a legacy on-premises system often find it difficult to deploy their workloads to the public cloud, as it cannot be customized to support any application.

A successful migration is critical to achieving the intended benefits of the new environment, and the higher success rate of migrations to private clouds is another potential cause of a lower TCO than public clouds.

Disadvantage of Private Cloud: Management

Despite having so many advantages, private cloud is not the perfect solution for every organization. The truth is that managing a private cloud will require significant resources if you’re considering using your own data center. You’ll need to staff the appropriate IT professionals to work on this software. Additionally, the upfront CapEx costs for server infrastructure can be very expensive and need regular maintenance, which means more people you’ll need to bring on for full-time support. 

However, the negatives mentioned here can be negated by leaning on the expertise of a managed private cloud provider. In terms of management and maintenance, the potential cost savings increases when using these providers to let them handle these aspects. 

Private Cloud Examples and Use Cases

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

Required HIPAA Compliance

For some organizations, the private cloud will be the only realistic option to ensure regulatory compliance. For example, HIPAA requires that electronically-protected health information (ePHI) 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.

Acronis Cyber Backup and other security services are available for VMware Private Cloud to meet compliance requirements.

Need for Flexibility

Private clouds 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 what cloud deployment is required, an organization should evaluate:

• Flexibility needs.
• Security needs.
• Compliance requirements.
• Cost.
• Applications used.
• Suitable environments.
• Organizational capacities.

A quality cloud 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 VMware Private Cloud gives you cloud performance on fast, secure enterprise infrastructure. It’s like having your own personal data center that is fully managed, easy to migrate to, features a personalized login, and works on a simple and transparent pricing model. It is ideal for software vendors, agencies, and enterprises. 

Private Cloud environments are built using multiple nodes and thus provide redundancy for the environment, eliminate downtime, and significantly improve disaster recovery time. These capabilities enable Liquid Web to provide Service Level Agreements (SLAs) with 100% guarantees for all private clouds.