What Is Private Cloud?

Private cloud is an IT architecture where an organisation internally provisions and manages IT resources to support a service based consumption model for applications and data. It can be managed, owned and operated by the organisation, a third party or a combination of both. It may exist on or off-premise in a colocation facility.

A private cloud can be designed to perfectly address the organisations IT requirements. A well designed and implemented private cloud platform can provide significant flexibility, security, control, and cost-saving benefits.

Private cloud architectures can provide significant benefits to stable workloads with low change cadence requirements. Private cloud deployments are suitable to any organisation. In some cases it may be the only option for organisations in regulated industries.

Private cloud environments can support dynamic changes in capacity and requirements without the expensive overhead associated with provisioning dedicated systems and infrastructure.

Unlike public cloud which provides services to several organisations, 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 organisation can utilise any IT resource, specifically infrastructure, applications and databases as required, within the corporate network.

Resources are typically provided using a “self service” approach under a consumption based chargeback model. This can be a very cost effective approach to utilising expensive enterprise IT assets efficiently to service a range of users and use cases.

Using private cloud, there is less effort required to design, provision and manage system components. Scalability, availability, and resource management are all baked into the design of the private cloud platform. All application workloads can benefit from the capabilities of a well designed private cloud which typically results in less downtime and greater performance.

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

The difference between private cloud and on-premise can be summarised as:

Private Cloud

  • Designed to support a service based consumption model for delivering IT services within the organisation.
  • Investment in tools and procedures required to support dynamic changes in workload requirements.
  • Supports consolidation of different workloads across the organisation.
  • Supports service tiering of different workloads to different performance, availability and security requirements.
  • All workloads benefit from enterprise class technologies required to deliver modern private cloud platform. Investments in high-end infrastructure capabilities can deliver benefits across the whole organisation.

Hosted Solutions

  • Similar design goals and benefits to a private cloud platform.
  • Typically runs off infrastructure owned and managed by a third party specialist provider.
  • All the availability, security, scalability and cost benefits of private cloud without the overhead required to manage the underlying infrastructure platform.
  • Typically consumed under term based agreement.

On-Premise Solutions

  • Typically refers to monolithic applications and systems provisioned and running inside the corporate data centre.
  • Adopts siloed design approach with systems provisioned on dedicated infrastructure as opposed to consolidated or hyperconverged infrastructure.
  • Expensive and time consuming to change capacity or add new, unplanned workloads.
  • Ability to support digital innovation limited to the capabilities of the underlying platform for specific applications.

On-Premise vs. Hosted Solutions

On-Premise private cloud, also known as an internal cloud, is hosted inside an organisation’s own data centre and runs off the organisations IT assets. Private cloud offers 100% control over the design, implementation and operation of the private cloud platform.

The technologies and skill sets required to deliver an enterprise level private cloud are diverse. Multiple enterprise level technologies are required to be correctly designed, implemented and supported to ensure the private cloud platform can meet requirements.

Hosted private cloud provides similar benefits to on-premise private cloud without the requirement for the organisation to manage and support complex IT infrastructure. Hosted private cloud can range from physical infrastructure up to SaaS based offerings on a consumption model.

Hosted private cloud is typically designed, implemented and managed by specialist organisations with appropriate skills and procedures required to support critical applications.

When to use Private Cloud?

Under what circumstances would a private cloud platform make sense? Typically the elements of cost, flexibility and security are major decision points when evaluating a private cloud. These factors can be:

  • Regulatory requirements around the security of data.
  • Internal security requirements for protection of highly sensitive data.
  • Integration latency cost requires that systems be located within the same data centre.
  • Sunset applications that are required to be retained for historical reporting or compliance requirements.
  • Application workloads that are consistent and well optimised can often be cheaper to run in a private cloud.
  • When there is strong alignment between the application requirements and the private cloud capabilities.

Private Cloud Pros and Cons



Data is a critical asset to most organisations. Private cloud deployments allow organisations to maintain complete control of their data whilst realising the benefits of cloud-like provisioning and management.


Well designed and managed private cloud environments are efficient and cost effective to run. With modern technology a private cloud may offer significant cost savings over alternative options. The incremental cost of additional workloads should be significant less than comparative public cloud services.


Private cloud environments do not introduce the complexities of noisy neighbours or right sizing public cloud services. Private cloud allows for the complete control over the resource management of the IT environment. This allows for much greater alignment between expensive enterprise grade infrastructure and the organisations most critical workloads.


Security in a private cloud can be designed and implemented exactly to requirements. Security solutions can accommodate specific and unique requirements without having to compromise based on the cloud service providers offerings.


Private clouds are often utilised when Public Clouds may prove to be inadequate or inappropriate for the needs of the business. For example, a Public Cloud might not give the kind of service availability or uptime that an organisation needs.


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


Enterprise level private cloud environments are complex to design and operate. Complex infrastructure and software with many features is required to support the private cloud operation. Problems become more difficult to resolve and maintaining service levels requires a team of skills managers and engineers.

Typically a private cloud is deployed on shared infrastructure, increasing the blast radius in the event of failure. System changes can be difficult to test and validate even when there is a matching test environment. Validating consolidated workloads on a test environment can be nearly impossible.


Aside from the IT infrastructure required to run the private cloud – highly skilled resources are required to maintain and design the private cloud environment. This cost is amplified when key staff members leave the organisation and take knowledge and expertise about the private cloud environment with them.


The private cloud ability to support digital innovation is limited to the technology footprint deployed. It may be unfeasible to constantly introduce new technologies and capabilities to the private cloud to maintain the pace of innovation required in the organisation. Stability concerns, cost justification and skill capabilities can all prevent adoption of new technologies into a private cloud environment once it is established.

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