Private cloud is a type of cloud computing system that only a single organization can exclusively use to address their business needs internally. It is usually presented as a monthly agreement and often completely isolated from others. It can be managed, owned and operated by the organization, a third party or a combination of both. It may exist on or off premise.

Private cloud is dedicated solely to assist in achieving the goals and needs of that specific organization. It can be designed to perfectly address the business’ computing needs. In addition, it delivers flexibility, security, control, and cost-saving benefits. These benefits are most valuable for businesses with stable workloads or customization requisites and companies in regulated trades.

Similar to a public cloud in terms of expandability and managing your own account, private cloud lets you do these through an exclusive infrastructure. Unlike public cloud which provides services to several organizations, private cloud is devoted to the needs and goals of one company.

How does Private Cloud work?

The basic principle of private cloud is that the end-users (organization) can get access to any IT resource specifically storage, CPU resources, software, and memory over the internet every time the need arises.

An internal IT team needs to begin from the end-user experience. They must align the technology assets to meet the associated requirements of the business. To the end user, it is essential that they have the control through a self-service interface that enables them to quickly access, request, and allocate resources according to the needs of their project. The IT team is able to reduce overhead costs that might be required to address those user requests efficiently disseminating available resources to the end users on demand.

Using private cloud, there is lesser friction between the IT team and the end-users. With a reduced process of opening troubled ticket requests, the end-users can become more productive. There is a decreased waiting time for IT teams to troubleshoot less strategic requests so the IT can focus more on essential technology decisions.

What is the difference between Private Cloud and On-Premise?

Private cloud hosting services have two primary types:

The differentiation lies in the level of maintenance support and available features.

On-Premise vs. Hosted Solutions

On-Premise Private Cloud, also known as Internal Cloud, is hosted inside an organization’s own data center and can provide an in-house solution for hosting needs. Since an Internal Cloud is entirely controlled internally, you can often have flexibility.

However, you have to prepare for the maintenance costs of the server including the installation of front hardware, software licensing and even hardware failures.

Additionally, you will need to have a qualified System Administrators on staff to monitor and maintain the systems.

Hosted Private Cloud Solutions

A third-party service provider owns and operates the Hosted Private Cloud like the Liquid Web. The server infrastructure has a much larger customer population. Your organization can benefit from the economies of scale. Another benefit you can get in a hosted private cloud is that it has more resources that can provide more on-demand expandability options for the end-users.

The third-party service provider will offer support, maintenance, and management of the servers.

When to use Private Cloud?

When an organization has determined its specific data needs and priorities, it can also determine if the Private Cloud if the suitable kind of IT technology for them. There are types of organization that private cloud is the only option to ensure compliance with the regulations. For example, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) required that electronic protected health information (e-PHI) must be received, created, stored and transferred in a strictly confidential, integrated, and accessible manner.

In addition to compliance concerns or those with HIPAA regulations, business entities with relatively predictable and stable resource demands should take into consideration the use of private cloud. Those types of organization can generally take full advantage of their resources and therefore cloud spends.

Organizations can also take advantage of the enhanced flexibility of a virtualized environment.   Many medium and large-scale businesses use a variety of applications that reside on their own hardware. Virtualizing a server that runs a certain application (such as email) permits the organization to increase or decrease the resources available to it.

As a result, it enables performance improvements as servers running a large number of resources are given with more computing power or memory. It also brings cost savings as the increased resources are taken from an underutilized server rather than leased or bought separately.

To determine if private cloud is the right IT environment for your company, an organization should calculate its security, flexibility, compliance and cost requirements. IT should also think through the applications it uses and what data storage environment is appropriate for them and its own sizes. A quality private cloud service provider can help with these deliberate evaluations and can recommend specific points to the organization.

Private Cloud pros and cons


Private clouds are often utilized when public clouds may prove to be inadequate or inappropriate for the needs of the business. A public cloud might not give the kind of service availability or uptime that an organization needs.

In other cases, some organizations consider a public cloud too risky for their data and systems to be stored. Security and regulatory concerns could also be compromised in a multi-user environment. A high-risk organization might choose to invest in private cloud to secure their resources while maintaining total control and ownership of its environment.


While it has a lot of benefits, it comes with disadvantages too.

Private cloud technologies – user self-service and enhanced automation – may bring complexities to a business. These aspects could require an IT team to restructure some of its data design and management tools. This could result in hiring more IT staff to successfully implement private cloud. This is not the case for a public cloud where they have the ones to handle systems management and maintenance.

Cost can be another disadvantage of private cloud. The organization should bear all the acquisition, deployment, maintenance, and support costs which can be very expensive. In a public cloud, the cost is mitigated through the use of computing as a utility. End-users will only pay for the resources they have used.