Large Enterprises Embrace the Private Cloud

The global market for cloud computing was predicted to grow over 18 percent in 2013, to a total worth of $131 billion. While small business are increasingly looking to the cloud, large companies have been the early adopters of cloud technology and are poised to continue innovating infrastructure, services and vendor relationships within the cloud.

While much of the focus on cloud computing has been, thus far, on public cloud infrastructure, this is not actually the largest area of investment in cloud computing. Instead, so-called private clouds or virtualized, dedicated data centers represent the largest growing area of investment.

Private clouds essentially double in-house IT utilities. These private clouds may be owned and operated by the enterprise itself, as is becoming more common, or it may be hosted and run for the enterprise by an IT services company, such as a cloud vendor or hosting firm. IT vendors stand to benefit from the growth of private clouds, because companies need additional hardware and software to maintain their clouds.

Private cloud hosting packages offer greater scalability and potential for capacity utilization than the traditional onsite data center. Companies can benefit from the speed, flexibility and economies of scale of the cloud while maintaining the same degree of privacy as with an in-house server. The private cloud also sidesteps the security concerns found in public clouds, where several businesses’ data co-locates on the same physical server.

For companies with compliance requirements, private clouds offer the same security as traditional in-house storage and may be an ideal, scalable solution for storage that meets requirements. Additionally, private clouds can save money over present computing expenses by consolidating existing resources, which may be split among multiple data centers, into one or two virtual servers located in one data center. Not only does this save money, it represents a green solution and can be touted as an environmentally-friendly move.

At some point, private clouds pay off a diminishing return: More capacity gains require the type of scale that can only come from shared infrastructure and services, a.k.a. the public cloud. While private clouds are experiencing major growth right now, they may end up a transitional technology to a public-private cloud hybrid, appropriately termed a “hybrid cloud.” Some experts are predicting a rise in industry-specific or community clouds, which green light those industry-specific processing, applications, security and compliance requirements.

Hybrid clouds offer the affordability and economies of scale of public clouds while maintaining the privacy and security found in private clouds. Because hybrid clouds consist of public and private cloud resources, businesses can leverage the cloud infrastructure to their advantage. Applications running on the private clouds can burst into the public crowd to run more efficiently or prevent downtime.

With most large enterprises already utilizing the cloud, or planning to do so, cloud is no longer the defining buzzword. Expect to see increasingly diverse usage of the cloud, more adoption of private clouds and greater collaboration and resource-sharing as cloud vendors promote hybrid clouds that aggregate vendor resources among like-minded clients.