Blog about Cloud Computing, SaaS, and "All Things" as a Service

The increased interest in private clouds and the ongoing debate has puzzled us. Predictably, there is a lot of noise from a wide spectrum: the public cloud fanatics who believe private clouds will be doomed any day now, to those who have an incessant fear of security and privacy at public clouds, and to those who think hybrids are the way to go. So as public cloud enthusiasts, have we misjudged the value of private clouds, and the reasons for an increased interest in them?  Well, the answer may surprise you.

First let’s get a few issues out of the way: the arguments about the value of private versus public cloud are about large enterprises. The debate is resolved in favor of public clouds for SMB’s who simply cannot match the cost, reliability, and security of public clouds.

Security and privacy are primary concerns expressed by enterprises about the public cloud, an issue Gartner’s Tom Bitman confirms in his polls. These concerns revolve not just around infrastructure security, but are those of personnel and processes also. Other concerns like maturity and performance of the technology, compliance, and integration round up the top five. The Microsoft report on the cloud provides more details, but we urge people to read it with caution. Unfortunately, many of the debates, reports, and blogs fail to either purposefully or unintentionally discuss a key issue which has had a significant impact on public cloud adoption, and the rise of alternatives like private clouds.

The public cloud induces a fear of an enormous change in the status quo of enterprise IT, and is critical to understanding the current interest in private clouds. To emphasize this point further, the biggest change in the enterprise due to adoption of public clouds affects the groups and  employees leading the adoption themselves (the IT and Data Center groups) – a situation rife with conflicts of interest between the enterprise and its technology workforce.  Needless to say, in any outsourcing scenario these concerns exist, but they are especially significant considering the nature of public clouds. This is because the economies of scale are so much in favor of public clouds, that once outsourced to them, data center functions will most likely never return back to the enterprise. That is not to say that private clouds will be completely eliminated.  Enterprises will always have some information and systems that need to be internal, but they will represent small workloads. Other domains like banking may never get comfortable with public clouds.

For the above reasons, the increased interest in private clouds will continue despite offering comparatively much lesser value. But in our view this will be temporary; public clouds simply represent too strong a value proposition, and will become the dominant computing resource for enterprises over time.

Disruptive technologies have a long adoption curve, and many alternatives always arise – private clouds being one of those. It will be a long haul for public cloud adoption in the enterprise,  but we are confident that eventually the chasm will be crossed…..