Is Private Cloud Right for Your Business?

Private cloud is a dedicated cloud infrastructure where all IT resources are allocated to one organization, rather than divided among business users, like in public clouds. The private cloud is managed by the organization itself or by provider and can be hosted within their offices, or offsite in their own data center. Companies can either place their private cloud equipment at a provider’s data center, thus getting such benefits as access to internet connectivity, and protection from fire, theft, etc.

Here is an overview of why business might need a private cloud, what is the difference between public cloud and private cloud models and what it takes to deploy a private cloud.

Why use private cloud solutions?

Once an organization has determined its cloud priorities, it is able to decide if a private cloud is a proper type of IT environment. Private cloud is ideal for companies that wish to make IT resources available on-demand, but for certain reasons cannot move to public cloud.  

As a rule, this model is chosen by large enterprises that have the opportunities to organize their own IT infrastructure: banks, public sector, insurance companies, telecom operators, medical organizations. Let’s find out why.

For some organizations, the private cloud is the only possible option to ensure regulatory compliance. Companies with relatively predictable and consistent resource demands should as well consider this model.

Companies that have hardware-only infrastructure face many challenges:

Capital expenditures. If an organization builds a data center from scratch, expenses are incurred even at the stage of searching an appropriate site. A lot of money is spent on the design and construction, the installation of utilities, purchasing of hardware and software, their adjustment, testing and commissioning.
In addition, organizations do not know exactly how much capacity they will need as well as cannot predict the development of technology and business growth for more than two or three years while data center is under construction. This means that there is a potential risk of overbuying resources and paying for unused capacity.

IT-department cannot react quickly to business needs. For instance, if you need to increase the capacity of databases, hardware purchase and configuration takes weeks, and implementation usually means downtime.

In case of equipment breakdowns, it takes time to get new one. This risk of downtime is eliminated for critical functions by means of purchasing redundant equipment, which will idle and incur extra capital and operating costs.

In such a situation, it is worth switching to cloud infrastructure to reduce costs and create a flexible IT environment:

1. Save on physical hardware. Cloud virtualization helps increase the amount of projects and information that the data center can handle on the same amount of physical hardware. In other words, the hardware is used more efficiently.
2. Scale up infrastructure quickly and easily. This is important if infrastructure is growing or company opens new branch offices in regions. The cloud dynamically allocates IT resources to different workloads on demand. There is one nuance: in a private cloud infrastructure, the scalability is limited by the total capacity of the company's physical hardware, compared to the scalability of a public cloud. But resources are still used more efficiently and are redistributed between projects much faster than with the traditional approach.
3. Rapidly deploy virtual environments for development needs. To test new services and applications you need separate environments, i.e. additional resources for testing new products. If there are few tests, you can do with a relatively short number of additional physical servers. When there are a lot of tests, you need virtual test environments that can be quickly and cost-effectively deployed in the cloud.
4. Speed up and simplify the work of IT Department. In cloud environment most services and applications can be deployed in minutes from a template. With traditional infrastructure, it is required to install and configure software on a server; installing from an image is possible, but it is time consuming and varies depending on the operating system and server type. In the cloud, a company can deploy applications for their business needs more quickly and bring new products to market. By automating processes in the cloud, errors are reduced.
5. Reduce the risk of downtime. All of the company's servers are combined in a cloud where all applications operate without downtime, shifting between servers based on current hardware load and performance.

As a result, migration from a traditional IT infrastructure to a private cloud is typically cost-effective. IDC research shows that private cloud prices rise, although public clouds are still ahead of them in popularity.

Virtual data center and private cloud: what is the difference?

Virtualization is not the only characteristics of a private cloud. Rather, virtualization can be described as a key and vital private cloud technology. An important part of public cloud belongs to automated management tools that dynamically distribute resources (networks, servers, storage systems, applications and services) based on workloads. Therefore, unlike a typical data center with virtual machines a private cloud involves virtualization, automation, scalability and elasticity + self-service.

Self-service (or automation) allows users to prepare and run new virtual machines without direct involvement of IT staff. For example, to deploy a new server application for a particular department, employees themselves create a VM, add the necessary computing resources, install the application and perform other related tasks. They do not need any support from IT-department. Besides, users can independently manage consumption. If a new application needs more (or less) memory, processors, or disk space, users can adjust the amount of all these resources themselves.

Private cloud solution also contains reporting and billing tools. This allows tracking the actual consumption of resources, as well as optimize costs depending on the situation. As a result, VM owners see the direct impact of consumption on costs, which encourages them to use resources more efficiently. For example, it's much easier to get rid of an unnecessary VM than to continue paying for it monthly.

Who chooses private clouds over public clouds?

All companies are looking for the benefits of cloud and want to get more flexible IT infrastructure at lower maintenance costs. Nevertheless some businesses can't store data or commercial information in public clouds.

There are two main reasons why companies are deploying their own private cloud rather than outsourcing their data to the public cloud:

1. Using a public cloud could mean violating regulations and result in penalties. This is true for regulated verticals like healthcare and financial services. A private cloud would give your company direct control over where sensitive data is stored and who has access to it, making regulatory compliance requirements easier to meet. If the company is dealing with data that are subject to certain legal requirements, FSTEC, FSB and other regulators then it is obliged to certify the system for a certain class of protection.
2. Organization needs to have a full control over where its own commercial secret  information is stored. In this case, the information security department may be against its transfer and storage in the public cloud or on the provider's servers. While private clouds are single-tenant solutions, enterprises have direct control over the security of IT infrastructure - data center, hardware, network, and other elements.