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This article was published on December 20, 2013

The private cloud: There are silver linings here

The private cloud: There are silver linings here
Ian Gotts
Story by

Ian Gotts

Ian Gotts is a tech CEO and non-exec director, author of 7 books and a challenging yet entertaining speaker. Having sold his last company to Ian Gotts is a tech CEO and non-exec director, author of 7 books and a challenging yet entertaining speaker. Having sold his last company to TIBCO he is now reinventing the event management space with his latest startup based in San Francisco / @iangotts

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The ‘private cloud’… Isn’t that just an internal network with a fancy name?

‘Private cloud’ is the phrase used to describe a cloud computing platform that is implemented inside the corporate firewall. But it is managed by the internal IT department, unless IT infrastructure has been outsourced. A private cloud is designed to offer many of the features and benefits of the public cloud, but removes the objections to the cloud computing model, such as security, data location and regulatory compliance.

So yes, it is an internal network, but it is responding to the more complex requirements of today’s business users at the same time as using the best techniques and technologies of the major cloud providers to minimise costs.

Rarely a private cloud

It is unusual that companies will be 100 percent private cloud. Even government departments understand and accept that not every system must be hosted internally.  So they have some non-critical applications that are public cloud. That means a hybrid cloud environment, which was discussed in a previous article.

However there are some companies in some industries that have a set of requirements that are so stringent that they cannot take advantage of public cloud based apps. But that doesn’t mean they cannot learn from public cloud hosting vendors.

By the way, those assumptions that your industry or your company can only use a private cloud need to be challenged. Often IT departments see cloud computing as a form of outsourcing that is putting their jobs at risk and therefore the ‘private cloud only ‘ arguments are put forward for reasons of fear and job preservation.

Whilst in a few situations a private cloud strategy is the only way, in the vast majority of cases, the new world of cloud is creating more interesting and more valuable roles in companies. Many staff may require retraining and support which enhances their CVs.

Clouds have silver linings

There are many benefits that an internal IT department can deliver with a private cloud, which will balance out the cost and risk of implementing a private cloud infrastructure. This can only improve the reputation of internal IT in the eyes of the business user. These benefits include:

  • Scalability: The greatest benefit is the ability to rapidly scale up servers automatically to satisfy peak or burst capacity requirements with no human intervention. That will probably mean migrating all legacy apps onto a common private cloud infrastructure to get the benefits.
  • Delaying hardware purchases: When server capacity is pooled using a private cloud infrastructure, then unused capacity is also pooled. Hardware resources can be distributed in real time to meet processing requirements. This approach will potentially free up spare capacity which can be used for any new application implementations. Before, a new application would have required its own servers, which could take months to procure. So there are not only savings on hardware, but also the speed to implementation and therefore benefits is accelerated.
  • Support for mobile devices: Increasingly large parts of the workforce are mobile. That means for some areas they want to use internally developed apps on mobile devices. And this get exponentially more complex if you have sanctioned a BYOD (Bring Your Own Device) policy. Apps need to be able to be downloaded onto devices, data needs to be wiped when devices are lost or stolen, and data needs to be synchronized to core systems. The app exchange and these other integration and sync services would normally be provided by the cloud app vendors. This now needs to be provided internally, and therefore your IT teams may need to learn whole new skillsets.
  • Resilience: Pooling IT server resources gives a level of resilience. Clearly this is nowhere near that of Amazon EC2 but it is certainly better than the situation of the single point of failure when each system is hosted on its own hardware.
  • Security: This is often cited as the greatest reasons for privately hosted apps is security and performance. But often the largest cloud vendors have consistently better security. They have all their servers on the latest patches and their business depends on high availability. So as it is their job, they probably are doing a better job than you are!

What ROI?

The first question is always one of ROI. With all the cost of implementing a new cloud infrastructure and the cost of migration, is it really worth it? What is the payback? If it is measured in years then there are other projects that IT could spend time and energy and get a far quicker return. A while ago I wrote an article talking about RBI (Return Before Investment), not ROI. There are some applications that are cloud hosted that can be implemented quickly and benefits are flowing before the first months invoice has event been raised.

The issue with moving to a private cloud is more than just cost. It is also risk and business disruption. It may be that not all internal applications are able to run on the private cloud infrastructure. That means leaving them where they are but updating the integration to those applications that have been moved. But the move to an internal cloud may be the catalyst required to update outdated existing systems which have their own ROI.

Many IT staff will not have the skills to select, procure, install and support the new cloud infrastructure. It will require a huge retraining activity combined with possibly poaching staff from the large cloud hosting providers.

The final word

IT departments should see public cloud not as a threat but as a role model. Based on this mindset strategies to improve customer experience whilst driving down costs can be devised. And private or hybrid cloud is at the heart of it.

Image credit: Shutterstock

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