Private Cloud Hosting: Benefits and Limitations

January 16, 2020

What is Private Cloud

If an organization is engaged in the private cloud, it means their computing resources are isolated and delivered via a secure private network, hosted in either an on-premise environment or a 3rd party vendor’s off-site location. The primary technical difference between public and private cloud hosting providers is that, in the case of private hosting, providers offer their clients a dedicated and secure environment that cannot be accessed by other customers.

In its formative years, the private cloud was considered a trusted solution by infrastructure and operations experts because it allowed them to 1) Collect the increased cost and performance advantages of the public cloud while 2) Maintain visibility and control over their infrastructure to maximize security efforts. Essentially, it enabled IT to make their own decisions regarding the risk exchange level between their security and performance.

In highly regulated industries, companies that required stronger control/security over their IT workload would easily invest in a private hosting provider due to its cost and efficiency gains and the reduced responsibility that came from outsourcing infrastructure resources. However, where the decision to deploy private cloud was once a no-brainer, infrastructure, and operations experts now face what could be their greatest IT challenge yet.

Due to the advent of public cloud, businesses can now create highly customizable IT solutions that not only improve efficiency but also serve as the business’s unique source of differentiation over competitors through the procurement of long-term cost reductions, agile performance improvements, and scalability. Because of this, infrastructure and operations experts are receiving an onslaught of pressure from upper executives and competitors in their market to quickly configure the perfect solution for their company. It’s no longer IF you plan to migrate to the public cloud, it’s WHEN, and to WHAT capacity? The public cloud has reset the standard, and all this talk has private cloud advocates and IT professionals worldwide wondering,

Benefits of Private Cloud

Optimal Hybrid Cloud Deployment

A worldwide market study conducted by the International Data Corporation found that sales of IT infrastructure equipment were growing 48.4% year by year, reaching 15.4B in Q2 of 2018. Of this investment, private cloud contributed 4.6B, 28.2% from the year prior. While this doesn’t equate to the growth we are seeing in the public cloud sector, it’s evident that businesses across the globe are still including private clouds in their discussion of how to operationalize their IT workloads.

According to Forbes, private cloud still occupies its own respective category, but it maintains a dominant presence among companies employing a hybrid cloud strategy. Therefore, your business may benefit from integrating private cloud alongside your public cloud workloads in order to gain the performance and scalability you need to address the needs of your business.

Despite this, you shouldn’t feel obligated to deploy a hybrid cloud strategy within your business to validate your private cloud. The impact of private cloud on your business operations is not dependent on a supporting public cloud solution. Depending on your unique business model and market segment, much of your needed business value can still be realized through private hosting.

Improved Resource Availability

Private Cloud is a great way to realize business value now. According to Gartner, business demand for private cloud is justified in accelerated application deployment, which enables improve availability and reliability. If you are committed to improving resource usage, private cloud is a solution you can use to immediately optimize your workloads. With its low costs and quick efficiency gains, you’re able to keep workloads internal thanks to the private cloud’s virtualization automation features.

Virtualization Automation is an extension of the virtualization management environment and the first step in building your IaaS private cloud. It enables your IT to offer virtual machines, container hosts, and network and storage resources as an automated service.

According to Gartner, x86 servers typically run at performance levels of 7 – 15%. This leads to a desire to increase productivity that private cloud VA solves for. A typical server at low utilization levels operates between 60 – 70%. Therefore, you may reduce costs by driving these servers to higher utilization levels or by creating virtualized images whenever possible.

Cost savings are not always the top priority, but for all, you cost reduction fanatics out there, if your business’s workloads run steady and the CPU utilization is stable through virtualization, the 3 – 5 year cost projection of private cloud computing in your on-premise data center may be less than the cost of using public cloud services, according to Gartner.

If security, cost reductions, and resource availability are your top priorities, you may significantly benefit from Private Hosting. Government agencies for example have a vested interest in private hosting. According to Gartner “Governments will implement private cloud at twice the rate of public cloud through 2021.” This is due to their strict requirements for security and control and the predictable price models of their business that Private Cloud can accommodate. However, businesses outside the government sector often have similar needs.

Limitations of Private Cloud

Regardless of its rapid growth, the public cloud still has its drawbacks. These come from the numerous reasons that a workload may not be suitable for migration to public cloud. According to Gartner, some examples include:

  • Limited/poor connectivity
  • Compliance requirements
  • Locale-dependent requirements (control systems, medical systems)
  • Limited time for, or value from, IT agility or elasticity
  • Core systems are not x86 based (mainframe, proprietary UNIX)

This list is non-exhaustive but serves to offer some explicit examples of workload environments that are immediately incompatible with the public cloud.
Therefore, in these scenarios, per Gartner, “Where Public Cloud is not an option, consider hosted Private Cloud.”

Selecting a Private Cloud Hosting Provider

Your framework for your private cloud hosting Provider depends on the nature of your business. If you have done your research and have decided on furthering your investment with a private cloud hosting provider, here are some important criteria to consider so that you can secure the most out of your investment.


Continual improvement should be a guarantee listed by your private cloud provider, and they should be very clear in how they plan to ensure it. Many recipients of private cloud hosting find the initial processes of implementation to be smooth sailing, only to be subject to mediocre service down the road. Two of the most important areas to look for in vendor investment are the efforts towards internal DevOps and proprietary IP, and external connections to value-adding partners.

Infrastructure Modernization

IT experts have been placing a lot of emphasis on this term because it’s an additional way to improve agility. A cloud hosting provider that invests in Infrastructure modernization can drive improvement in standardization, simplification, IT automation maturing, rationalization, and retirement, and consistency in workload placement.

Cloud Inspired Infrastructure

Cloud-inspired infrastructure refers to the practical adoption of public cloud aspects in a private cloud setting. Ideally, your private cloud is emulating most if not all aspects of public cloud to serve as grounds for its adoption in the first place. Various architectural elements are associated with public cloud IaaS. Their basis rests in the goal of perfecting the repeatability of infrastructure provisioning. The methods vary in how your private cloud hosting provider will manage their services and software deployments on IT resources. Discover whether your private cloud provider is emulating the resource provisioning requirements of IaaS and maintaining absolute flexibility and responsiveness.


While the case for this has already been made, you want to ensure some level of Automation in your private cloud hosting provider to reduce the number of repetitive tasks and focus energies on proper provisioning, monitoring, and management. This is an essential ingredient if you wish to take advantage of the optimizing effects that private cloud offers for your resources. It will streamline your IT operations, allowing for speedy deployment to simplify your business processes. Simplification is the key to your optimal resource usage.


Your private cloud hosting provider should be very clear in how they plan to integrate with your organization’s existing and future workflows. Discuss their data exchange protocol to estimate the risk associated with integrating. Create an outlined approach to user identity management to avoid unnecessary barriers in end-user handling as well. You’ll want to use a cloud that uses protocols with verified success in use cases like yours. Through integration, you can create seamless interoperability and prevent performance disruptions.

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