Private Clouds Are Making a Comeback

Once upon a time, all data was kept in-house. Then came cloud computing. Almost overnight, data migrated from on-site to the cloud. Drivers such as low cost, ease of use, and the elimination of on-site infrastructure made the public cloud very attractive.

But some organizations baulked. They needed security and compliance assurance. They wanted to have full control over all data. They kept their data on premises.

But two trends have caused the public cloud to lose some of its luster: rising and hidden costs for public cloud storage and services; and the rise of private clouds as a way for enterprises to retain full control over their cloud assets.

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The Case for Private Clouds

According to Statistica, half of all corporate data is stored in the cloud, up from 30% in 2015. While the vast majority of that is stored in public cloud assets, private cloud storage is steadily gaining ground.

“Businesses are moving workloads away from public cloud into private clouds,” said Steve Wallo, the CTO of Vcinity. “Private clouds are offering more tailored services, and are seen as less risky and offering more performance than public clouds.”

Although the volume of public cloud storage and services is much larger, performance is not always what enterprises require. To gain higher levels of performance, they often have to pay for higher-tier services, or for more compute resources. Over time this adds up. The cost advantages promoted for the cloud soon dissipate.

Enterprises are demanding full control of their assets, and that leads many to the private cloud.

In terms of risk, the public cloud continues to be perceived as less secure. Despite the fact that the mega-cloud providers have far more resources at their disposal for adding more layers of the latest technology services, the fact is that it is ultimately not their data.

Yes, they will do a lot to protect it. Some do a fine job. But in some ways it is similar to the old adage about home owners caring far more about property than renters. Ownership tends to add more responsibility. Thus, enterprises are demanding full control of their assets, and that leads many to the private cloud.

“More and more businesses are mandating that data cannot be moved to the public cloud, in part due to data breaches, data corruption, and vendor lock-in,” said Wallo. “Although public clouds have a greater, more varied set of services, egress charges (among other costs) are driving the industry to find alternative solutions.”

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The Hierarchy of Storage and IT Services

This is giving rise to a hierarchy of storage and IT services. The highest value corporate jewels are kept close at hand, typically on-premises in highly secure systems. Next comes the private cloud, where mission-critical enterprise applications and data reside. Lower down the totem pole come public cloud services, which might be used for large, low-value data stores or for applications not deemed sensitive.

The point of differentiation is often based upon the consequences of a breach. If a breach happens, data exposed in the public cloud should not lead to acute corporate embarrassment or serious consequences to users. Further, the enterprise should be willing to have a relatively leisurely recovery time objective with regard to that data.

For private cloud and onsite assets, however, the security of information is everything. If a breach happens, the consequences could be dire. A ransomware attack on such systems could seriously injure profitability, image, and competitive advantage. Thus, private clouds are evolving, offering more assured security and compliance.

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