What Is A Private Cloud?

CloudHealth Tech Staff
May 24, 2019
4 minute read

There is no absolute answer to the question what is a private cloud, as definitions differ according to who you speak with. We explore the different interpretations of what is a private cloud and investigate what drives a business to use a private cloud by looking at the potential advantages and disadvantages.

Ask a selection of people the question “What is a Private Cloud?” and you’ll likely get a choice of answers varying between a data center located in a business’s private premises, and a private data center located within a third party service provider’s premises. Strictly speaking, the second explanation is more accurate, as it conforms to the definition provided by the National Institute of Standards and Technology (NIST).

Nonetheless, while a private cloud is a private cloud if it’s operated and managed by a private business regardless of the data center location (according to NIST), some people prefer to differentiate between an on-premises private cloud and a remote private cloud by referring to data centers hosted within a third party service provider’s premises as “Virtual Private Clouds”. The distinction is further confused by bare metal servers.


Private Clouds vs. Virtual Private Clouds vs. Bare Metal Servers

A comparison of on-premises private clouds, virtual private clouds, and bare metal servers shows little variation from NIST’s answer to the question what is a private cloud. However, each has its own advantages and disadvantages that may drive a business to prefer one over the other.

The Advantages of On-Premises Private Clouds

The primary advantage of on-premises private clouds is that businesses have full control over every element of the set-up. This can be an important factor in regulated industries in which compliance with HIPAA, PCI, Sarbanes-Oxley, etc. is a necessity. On-premises private clouds also provide the opportunity for businesses to customize the infrastructure in order to meet specific requirements.

The Disadvantages of On-Premises Private Clouds

The biggest disadvantage of hosting a private cloud on-premises is the cost. Businesses following this path have to pay for hardware and software licenses without benefiting from the economies of scale enjoyed by remote data centers. On-premises private clouds are less scalable than virtual private clouds and lack flexibility —  making it harder to respond to changing market conditions.

The Advantages of Virtual Private Clouds

The advantages of virtual private clouds are that businesses don’t have the capital expense associated with on-premises data centers and get access to scalable and flexible services on demand - which are provisioned on a private IT infrastructure for the dedicated use of the individual business. The service provider also takes responsibility for maintenance and software updates.

The Disadvantages of Virtual Private Clouds

The disadvantages of virtual private clouds are that they’re more expensive to operate than public clouds, can be complicated to set-up, and businesses in regulated industries don’t have control over the physical environment. Often, the lack of control isn’t necessarily a problem. It’s the way in which virtual private clouds are utilized that leads to data breaches —  businesses treating them the same as on-premises private clouds, and failing to take adequate security precautions in day-to-day operations.

The Advantages of Bare Metal Servers

Bare metal servers come in two formats —  Dedicated Instances and Dedicated Hosts (using AWS terminology). Dedicated Instances are virtual machines that are physically isolated at the host hardware level from instance that belong to other AWS accounts, while Dedicated Hosts are physical servers with an EC2 instance capacity solely dedicated to the business’s use.

The Disadvantages of Bare Metal Servers

There aren’t a lot of negative things to say about bare metal servers. The single-tenant environment ensures there’s no competition for the host hardware’s resources, for a small fee per hour. Though they  can be difficult to configure, if used correctly bare metal servers are just as secure as on-premises or virtual private clouds, and can be an excellent way for business running on-premises infrastructures to expand capacity at short notice.  

Managing Multiple Private and Hybrid Cloud Environments

Managing resources in a single private cloud can be complicated, but once you step outside the single environment and start using bare metal servers or public cloud services, the management of resources multiplies many times over. In these circumstances, it’s advantageous to have a cloud management platform such as CloudHealth to gather data from all sources to provide complete visibility into your multiple private or hybrid cloud environments.

CloudHealth enables you to analyze and manage multi-cloud costs, usage, security, and performance in one place. You can automate control over cloud costs, resources, and governance—saving an average of 30% to 40% in multi-cloud costs every month.


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