Three Reasons to Consider a Private Cloud

This article, written by Balasubramanian Somasundaram, Enterprise Architect, Microsoft Corporation India, was originally published 4 April 2012 on InformationWeek.

There have been a wide range of discussions and opinions over private clouds on the blogosphere. Some say the term ‘Private Cloud’ itself is an oxymoron, claiming cloud can’t be private. If it’s private, it’s just not cloud. It’s a trendy name for an optimized data center.

There have also been claims that ‘Private Clouds’ are zero sum games – in a scenario where the existing shared service model in an IT organization gets transformed into a private cloud, the organization needs to incur significant capital expenses and the operating expenses fluctuate based on the number of consumers.

Before getting into the scenarios where private cloud can add value, it’s necessary to understand the definition of the term private cloud itself. As renowned columnist David Chappell puts it in simple terms:

“Cloud Computing allows self-service access to an elastic pool of IT resources. When this pool is provided by physical resources dedicated to a single organization, it is viewed as private cloud. When this pool is provided by physical resources that are shared by multiple organizations, it is viewed as public cloud.”

With countless claims and counter-arguments, it’s natural to wonder if private cloud is for real and if it makes business sense to build one. This article highlights the three key business scenarios where private clouds can add significant business value. If your organization is facing any of these scenarios, it would be worthwhile to consider building a private cloud.

1. Transforming to a Service-Oriented Business Model
Many CTOs who develop software products and contribute to a company’s topline growth are actively contemplating to transform their business model from shrink-wrapped products to a software-as-a-service delivery model. To enable this change, they see private cloud as a critical enabler in two ways: one to transform their internal software product line development infrastructure into a private cloud, and another to provision their end products in a Software-as-a-Service model to their customers. In this scenario, private clouds would act as the stepping stone for the company to becoming a public cloud provider. One can correlate this scenario to Enterprise SOA deployments that were actively discussed a few years ago. Enterprise SOA generated huge waves in the beginning, invited criticism later, but it made business sense only when there was the realization that just the customer facing business functions be service-oriented.

2. Data Volume & Security
Organizations that need to meet regulatory requirements (e.g. governments / public sector companies / banks) are considering building data-centric private clouds to manage data volume and data security in a single solution.

3. Data Center Optimization
Organizations that consume large amounts of IT resources – be it compute or storage – are building their own private cloud to optimize the data center operations. The key objective here is not to compete with public clouds, but to streamline the existing data center by introducing virtualization and then providing more effective and automated ways to manage the virtual machines, applications and other IT resources within an integrated infrastructure on the company’s premises.

In summary, it’s critical for organizations to look beyond the insignificant disputes around technical jargon and implementation nuances of private cloud and take informed decisions so that private cloud solutions get deployed to suitable business situations.

Balasubramanian Somasundaram is an Enterprise Architect at Microsoft Corporation India. He has 13+ years of experience in the IT industry with a focus on IT Architecture and Business Technology Solutions.