Protecting your organization’s intellectual property is key to your business continuity and data security. Equally important is leveraging technology to stay competitive, agile, and innovative. In recent years the debate over advantages and benefits of public cloud vs. private cloud among analysts and IT decision makers have increased — at times introducing more confusion.

But even before your organization begins to review the benefits of public vs. private cloud — you should first determine whether you really need “the cloud” in the first place. Why is this important?

There’s no question that many use cases, which are not strictly cloud and being heralded as the poster children of the space — things like communications (email, instant messaging, etc.) and even generic virtualization. For example, hosted email by itself does not really require cloud computing. Likewise, “spinning up” and “spinning down” virtual machines can be done on any commodity hypervisor (free or commercial) without requiring full-blown cloud infrastructure and complexity. It’s the elasticity, the dynamic reconfiguration and increased utilization of resources, the self-service capabilities, and the accounting that really drives the need for cloud computing.

Having said this, if you are planning to use infrastructure to perform the same tasks all the time — this is just plain infrastructure —a simple cluster of servers can provide the services you would require. If your needs, scale, and users are constantly fluctuating then you may in fact need cloud services. So, once you’ve confirmed the need for cloud computing, then comes the decision of choosing which model — public or private cloud — would best meet your specific business needs. All other things being equal, assuming you are not forced into one model or another due to rules and regulations, and regardless of what types of services you are looking to consume, the decision to select public over private cloud really boils down to three major key factors: cost, skills, and time to value.



Computer systems have CAPEX (capital expenditure) and OPEX (operational expenditure) that contribute to TCO (total cost of ownership). So when considering costs, you must keep in mind the TCO that is calculated over a period of time (e.g., five years). There are many methods and formulae to calculate TCO. Basically the cost and depreciation of the equipment plus its operation (including human capital required), over a specific period of time determines TCO.

Generally speaking, if you plan on using your cloud 100% of the time for long periods, then private cloud is simply the better choice. In this model either your organization or your service provider owns the equipment, which is solely dedicated for your use. If you choose this model and commit to a long-term contract, many service providers will provide dedicated gear at a much lower price than pay-per-use for the same capacity. If your organization owns the equipment then of course you would need to invest in buying or leasing it. When you consider the cost of floor space (or hosting), power, cooling, system administrators to manage all this — not to mention productivity loss during downtime, etc.,— owning your own equipment would make sense only if you plan sustained, heavy usage of the infrastructure. Even if you don’t consume it, you still end up paying for it. In most public cloud models on the other hand, you only pay for what you use. If you consume it less than full time, it is typically less expensive in TCO terms than a private cloud.



Another factor in determining whether public or private cloud is the best model for your organizations is to consider your core competency. If it’s anything other than information technology (IT), then you should favor public cloud over private cloud. If you don’t have the in-house experts you must either hire them or outsource them. But beware: Just as IT people don’t usually make great mechanical engineers (for example), neither do most mechanical engineers possess great IT skills. These are very specialized fields, and each requires its own set of experts. If you think it’s expensive to hire these experts, keep in mind that it’s even more expensive not to when you consider the cost of crippling (or potentially fatal) IT mistakes.

No doubt, building private clouds is not an easy task, no matter what technology you use. Neither is building public clouds, but the experts have already done it. One way or the other you have to pay the experts, be it in salary or computing time. Your decision should be based on whether you need the cloud full time and whether the cost of paying experts on hourly basis to run the private cloud makes best business sense for you. Otherwise, it’s better business to pay only when needed, which is included in the hourly (or monthly rate) of the compute time from your public cloud provider.


Time to value

If you are new to the cloud and need to build the infrastructure from scratch, keep in mind the time investment required to get a cloud functioning and ready — which can take weeks, months, or years depending on the approach. Remember, infrastructure is just a means to an end. What you really need to do is solve problems — so cloud should only exist to help you solve problems. Applications help solve problems. But until the cloud is up and running, you won’t be able to run applications and reap the benefits or see results. This should also be factored into TCO as part of the cost decision factor. Planning for jobs you will need to run in the next six to 12 months is different for jobs you need to complete by “this Friday.”

Finally, make sure you don’t assume you are halfway there just because your IT staff has a few VMware ESXi servers running. Well-run private clouds are much, much more than just commodity hypervisors. First, your infrastructure needs to be multi-tenant, since end-users will begin to operate it directly. They’ll also need self-service mechanisms including portals and APIs, accounting, and reporting, and of course, service catalogs of platforms and/or applications to get their work done. Finally, clouds, unlike other IT services, are designed to fail. This means distributing compute, network, data, and other systems so that individual component failures result in minimum impact. And don’t forget about security. In short, building private clouds is expensive, difficult, and takes time to tune and perfect. Don’t do it unless you really need to.


Other factors

When considering public cloud versus private cloud, there are additional factors to keep in mind, including:

  • Security: How much do you trust your own internal methods vs. those of your service providers, who are generally certified and well prepared?
  • Types of jobs: Determine what types of job — HPC, CRM, web services, etc. — you would be running, and make sure the cloud infrastructure you pick (private or public) is well suited to these use cases. Not all clouds were created equal.
  • Types of users: Determine the types of users who are part of your organization — task, mobile, power/developers, etc., to name a few others. Clouds are self-service, so always consider end-user skills, habits, and expectations.

Whichever model you choose — public or private cloud — be sure to take a comprehensive view and account for as many details as you can of the needs of your organization. There are many options to choose from whether you are building your own or leveraging an entire ecosystem of cloud service providers’ offerings. However, determining which model is best for your organization should begin by considering the initial three factors detailed above, and the rest will generally fall into place.