Why the world (still) needs private clouds

We know what people say about private clouds; we hear it all the time. “Why would anyone want a private cloud when they could be reaping the benefits of the public cloud?” Well, don’t write private cloud off too fast. While we (obviously) agree that there are remarkable benefits to using a public cloud, the most future-proof model that most enterprises are moving toward is actually a hybrid cloud model--a combination of both a private and a public cloud.  

It’s likely that you’re already aware of the benefits of using a public cloud, because they’re so popular and growing fast, with providers like AWS, Azure, and Google. Hybrid clouds enable organizations to combine their own personal data centers with public cloud assets in order to reap the combined benefits of both. 

So today, in making our case for a hybrid-cloud approach being best for most businesses, I’m going to walk you through the top 9 reasons to consider adding a private cloud to your strategy. 

In private clouds with over 2,000 virtual machines, our customers are seeing a cost reduction of 40-60% when compared to public clouds. (See examples of a credit card company, a media giant, and an enterprise CRM SaaS vendor.) Another successful OpenStack user, Tubemogul, publicly claims a 30% savings and a reduction in server footprint by using OpenStack instead of AWS for their VM-based applications. These types of savings are also validated by the 451 Cloud Price Index. 

Long-term savings from private cloud use can add up to substantial funding for something else--investing more in application delivery, perhaps. The long-term ROI of a private cloud is easy to understand when you compare it to paying for someone else’s servers on a public cloud--convenient at first, costly over time. 

Unless you are a brand new startup, you probably have legacy systems with which your new applications need to integrate. Perhaps it’s a customer database, perhaps it’s an inventory system. Of course, it doesn’t have to be legacy data. It could be new IoT, analytics or other digital data you will be generating. Unless you plan to host all of this data on the public cloud, you need to consider a private cloud. 

Sure, you could purchase a direct link to a public cloud and host your apps there, but all this data transfer is likely to get very expensive with a lot of data going back and forth. One of our media customers chose a private cloud because one set of their apps needed access to an on-prem image database. They continue to use the public cloud for other apps.

Public clouds are not available everywhere in the world. If you operate in geographies without a public cloud and need to meet specific data residency laws, a private cloud may be your only option. One of the reasons why the Volkswagen group chose a private cloud is because they operate in 167 locations around the world with varying data residency policies. 

Regulations like Europe’s GDPR may restrict or dictate where data can be sold, and where computing can happen. This could cause considerable operational hassles at best, and legal trouble at worst. Many organizations who house sensitive data or have high demands from their customers regarding security may opt for a private cloud, because all these risks are eliminated when the data is stored securely on your premises. 

In a public cloud, governments can issue subpoenas and get access to your data (see AWS or Azure agreements). Further, see the recent fight between the government and Microsoft over secret demands for customer data in which the government can make blind subpoena requests, and the owner of the data will never even know that their data was relinquished.

The plot thickens.

Even if your data is not subpoenaed, it could get turned over if you and the subpoenaed tenant are sharing the same hardware--a distinct possibility in a multi-tenant public cloud. Don’t be alarmed… but the status of metadata is not specified in the above agreements. For example, is the pattern of how many VMs you start and stop, rate of I/Os to your storage volumes or buckets, and traffic in and out of your workload protected by public cloud providers’ privacy policy? Or are the public cloud vendors and their partners able to see that metadata? So, unless you are 100% comfortable with your data potentially being turned over to the government and other gray areas in terms of privacy, private clouds might be something to consider.

A large SaaS customer of ours providing security-related services felt there was no way they would move their company secrets and proprietary technology to the public cloud, and instead chose a private cloud--or the peace of mind it ensured them. 

If you are in highly-regulated industries with strict compliance requirements, you might have to stick with a private cloud. Take the gaming industry, for example. In the US, a casino cannot host any of their games on a public cloud, and that is why one of our customers is using a private cloud. Even without hard government restrictions, if you need things like detailed security logs in the event of a breach, you might not be able to get them from a public cloud provider when you need them--or ever. 

A large telco customer chose an OpenStack private cloud because AWS was unwilling to provide access to all the information they needed to meet their compliance needs. So if your compliance needs are substantial or unpredictable and a lack of information could put your business at risk, a private cloud serves as a safeguard here: You have all the data you need to access at your fingertips, any time of the day or night. 

One more thing to mull over: public clouds handle traffic from millions of users at the same time, which increases security risks and opens up the doorway for potential vulnerabilities with your data. Your private cloud, on the other hand, consists of physical infrastructure, so you’ll have more control of your network. 

Businesses come and go. High-flying technology companies such as DEC, Sun Microsystems, Palm, Blackberry, and AOL were once infallible. Over the course of several years, there is no guarantee that your public cloud provider will still be in business. The problem with technology is that a new innovation can literally blow incumbents out of the water, and as consumers, we have no way of knowing what’s just around the corner. 

You might think this isn’t your problem; you’ll be long gone by that time, and your replacement can migrate all your workloads. But that's easier said than done. Even disregarding proprietary API differences between cloud providers, if your organization puts petabytes (or zettabytes by then) of data into a public cloud, moving your workloads is not going to be fun. It will be a race against time, as the end-of-life letter will have a finite time frame, at the end of which the cloud will be turned off--whether you're finished or not. 

In simple terms, this translates to: you could lose a ton of data if you don’t move fast enough. And there’s no guarantee you’ll be able to move fast enough, because you can’t predict these timelines. Better to err on the safe side and have a backup strategy that doesn’t run the risk of going out of business.

There really is something to be said for predictability. 

See Nirvanix’s cloud demise where customers were given just a couple of weeks to change providers. Could you imagine having just a few weeks to move 100% of everything? This is why research labs, governments and public institutions are adopting private clouds. Once again, for the peace of mind it ensures them. 

Even if you are not worried about long-term issues, you might want flexibility in moving your workloads between public clouds and possibly a private cloud. In this case, you don’t want to be locked into one particular cloud vendor’s APIs. By using a private cloud with open APIs or an open CMP (cloud management platform) you avoid vendor lock-in and can seamlessly move workloads to virtually any public cloud. 

Keeping yourself and your organization safe from vendor lock-in means you’re keeping your options open. You can be flexible when you need to be, so you can make the choices that are best for your business. 

If your team requires specific features not available in a public cloud, you will need to consider a private cloud. This fact might be obvious, but it is worth stating anyway, because your requirements may be more "unique" than you think.

For example, if your team needs a specific FPGA adapter for deep learning, a server with specific network function virtualization (NFV) acceleration features, VM flavors not available on the public cloud, specific network traversal requirements or integration with a specific PaaS vendor, you will need to create a private cloud. Indeed, as new technologies appear more and more frequently, this becomes more of an issue.

In addition to performance SLAs, there may be unique requirements on support SLAs as well that could drive the need for a private cloud

Unless you're spending many thousands of dollars, public cloud support options are usually extremely limited; if you can't access your application, filing a ticket and waiting for a response is likely not going to be enough for you. You could be waiting a while, and even then, there’s no guarantee of a helpful response. 

What's more, even the public cloud SLAs that are available might fall short of meeting your needs; they typically only provide availability SLAs, and the partial refunds for failing to meet them are not exactly thrilling--and don't help the fact that your business was offline. If your team needs better availability, data durability, I/O latency, performance or other SLAs, a private cloud--and an associated support contract--may be your best bet. 

Here’s a recent example of several businesses affected by public cloud failures. Similarly, putting the primary copy of medical images or golden images of your blockbuster movie in a public cloud that lacks data durability SLAs, might raise concerns.

Want to learn more about why the world still needs private clouds--and why you might, too? We’ve got you covered. We’re hosting a webinar on January 31 on the very topic. In the webinar, we’ll be discussing why companies are moving back to private cloud, or implementing it alongside their public cloud for a more hybrid strategy. How can you make sure your company remains cloud-native, agile, and self-serviceable? We’re sharing everything we know. Register here and save your seat.

WEBINAR // TUESDAY, JANUARY 31

Why the world (still) needs private clouds

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