One of the greatest benefits of cloud computing, at least according to the vendors who are selling it, is that an organisation does not have to bear the up-front capital expenditures that would otherwise be required to provision the services in-house. That benefit is wonderful, but the marginal utility of the no-capex benefit decreases as the size of the installation increases. That’s because the cost of cloud services (ongoing monthly licensing fees) at some point over time, especially if there is a large number of users, will reach a point of equilibrium compared to the amortized cost of an in-house data centre to provision the same services.
Given that economic reality, one must wonder about the benefit of installing a private cloud, and when it might become economically advantageous.
Cloud computing is becoming a common term for tech-geeks, small-business owners, and large corporations. With technology moving at a rate beyond belief (yeah, the recurring phrase we so often hear—year after year), it is advantageous to understand the main components of the most current topics and trends. The difference between most trends and cloud technology in particular…cloud computing has substance, and will be around for a long time.
Most companies seemingly use the Internet as a source of sending, receiving, and storing data; the source of the data is a public, third party company selling chunks of service to vying clients. If someone wants more space, they use more space. That is the wonderful thing about cloud computing. However, just when people started getting the hang of basic, public cloud computing, the rise of private cloud computing came along.
The concept of a private cloud is gaining ground, although the exact definition seems to be a moving target. (See Wikipedia definition) Essentially, it brings the cloud concept—using a common set of hardware and software to provision services, usually over the Internet to multiple end users in multiple locations—to a more closely-held level with greater control. The question is, do you really need to keep it in-house to have that level of control? In most cases, no. There are of course, some enterprises and government agencies that remain reluctant to put highly sensitive data into the traditional public cloud, which is based on a multi-tenant architecture. Even though that multi-tenant architecture is virtually separated and firewalled, if you’re a government spy agency, the military, or you need to keep the Colonel’s secret recipe safe from the competition, it makes sense to go the extra mile to have an absolutely private environment with no chance whatsoever of penetration.
Besides the security consideration, the private cloud may also be optimal for larger companies that have a need to control to a more granular level the allocation of services for accounting purposes.
It’s not for everyone—and probably not even for most. It’s a long stretch before you reach that level of equilibrium between cost for cloud services and cost for amortised cap-ex, but should you be in such a position, there are some things to consider when deciding whether or not to use a private cloud.
[ Cloud computing has fuelled renewed interest in outsourcing, resulting in enterprises reassessing their IT service sourcing strategies. The Cloud, Managed Hosting, Colo or In-house? complimentary research outlines some interesting considerations when deciding on public / private cloud. ]
You’ll want to be sure your company is prepared for a major technology transformation. Remember, one of the other main benefits of cloud computing is simplicity—and the ability to let other people handle the day-to-day grunt work of managing a data centre. When you’re running your own private cloud, you’re taking that responsibility back into your own enterprise. Simply put, it makes sense for larger, high-traffic companies to switch to the private cloud; however, until the resource reaches full capacity, it will be more economically friendly for start-up companies to stick with the public cloud computing option. It will not be worth the time and money to switch to the private cloud until it becomes cheaper and more widely used. It is faster, safer, and more productive in comparison to the public sphere, but what is most important is that cloud technology is here to stay—and this is only the beginning.