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To Private Cloud or Not to Private Cloud? By @ShelleyMPerry | @CloudExpo #Cloud
Each enterprise continues to mature its cloud strategy and rethink the earlier role of cloud

Private, public or hybrid cloud? This is the question that is being asked by C-level executives and IT professionals across the globe, as each enterprise continues to mature its cloud strategy and rethink the earlier role of cloud and whether to move away from an all public or private environment and embrace a hybrid cloud strategy.

Benefits of a private cloud in a hybrid strategy
The private cloud has a very particular role within a hybrid cloud strategy. Its main advantage is to address the most challenging of security concerns by dedicating the use of exclusive resources by an enterprise, versus a shared pool across multiple enterprise customers hosted by a cloud vendor. The private cloud is a ‘'best of both worlds" solution that combines the benefits of public cloud - dynamic resource allocation, automation, improved uptime and reliability - with dedicated resources previously only achieved through traditional enterprise infrastructure models and ‘enterprise DIY private clouds.' The tradeoff for the security offered by the private cloud is the economic consideration. The more dedicated resources, the higher the impact on the overall hybrid cloud financial model.

Private cloud is adopted by those enterprises' that have a high security and compliance requirement - either business or technical - for specific applications and services that are considered to be highly regulated. Additionally, enterprises turn to private clouds when its most valuable information and corresponding applications need to have a private cloud located in proximity to other enterprise resources due to latency issues. These applications can include mission critical, customer facing applications such as a mobile banking backend solution, Enterprise Resource Applications (ERP), financial applications and highly regulated/ governmental applications and data. The industries adopting private clouds are those that deal with highly sensitive and restricted data comprising of financial institutions, retail/payment associations, healthcare, education, insurance and government agencies.

To truly maximize the benefits of a hybrid cloud strategy, there are ways to balance the economic impacts of private cloud. For those enterprises that want to lessen the financial impact of a private cloud, they may dive further into the application design and architect a solution that includes only running certain transaction types for the data being processed and stored in a private cloud. For instance, a customer's personal data such as credit card processing, product and catalog selection may be best kept in a private cloud before adding to a customer order in a public cloud where the rest of the application is run in a shared resource pool.

Beyond security, the other benefit of the private cloud is the reduction in latency that will accommodate application connections that require a high degree of integration running in a particular location. Each enterprise will have to balance the economic impact of private cloud resources against other options including application modernization, migration to a new platform or traditional IT infrastructure.

How to deliver the private cloud service
Once a decision has been made to include a private cloud in the overall hybrid cloud strategy, IT professionals are faced with the next major decision for the enterprise: how to deliver the cloud services. Enterprises can select whether to build, buy or rent cloud services in a managed or consumptive environment from a provider.  In any option, private cloud requires access to massive resources, most notably skills and capital.

An enterprise that makes a decision to build and support its private cloud will need to retain in-house talent and capital investments for expansion, product updates and the addition of innovations to meet with user demands. Most important, IT teams will need an individual who has a dedicated focus on security requirements and regulations. The security aspects are critical, as the reason an enterprise typically selects a private cloud is often based on the security requirements for the applications and data that require additional protection. The requisite investment is substantial, especially at scale, and will be in addition to the investments needed to develop, operate and innovate the cloud services and applications. It is a consideration that should be weighed against the goals of the enterprise. Today, one of the biggest barriers to cloud adoption is the ability to both attract and retain qualified staff, second only to security. The staffing risk is increased as an enterprise will need to operate both the cloud maintenance team, as well as the group to build and manage the applications that will run in that cloud.

Considerations for managed private clouds
Alternatively, most enterprises that have selected a private cloud choose to reduce the talent and security risk by partnering with a managed private cloud provider. The managed cloud providers can recruit and retain talent in this area, due to the scale of the business and invest heavily in a pool of trained specialists in each area - including security. The enterprise will be renting the cloud service and benefit from the knowledge of a much larger group of professionals than they would be able to recruit and employ. The professionals not only drive innovation in the cloud offering, but they will also partner with the private cloud customers to help them understand the benefit of the features in the enterprise market. Also, most cloud providers offer complementary services and platforms that extend the private cloud options, such as business continuity and recovery options as well as micro-services such as single sign-on, performance analytics, etc. The enterprise must consider the cost/value of these add-ons in the make vs. buy decision.

A managed private cloud is a ‘rental' option. The managed cloud provider will build, operate maintain and continue to innovate a private cloud for the enterprise in a range of dedicated options, whether on-premise or in a selected cloud data center. A managed private cloud provider takes on the risk of capital expense, staffing, upgrades and continued innovation and can either provide additional services to operate applications or the enterprise can opt to do the later in-house. Many enterprises select the managed private cloud option to obtain the benefits of a private cloud and to free up internal technical staff to innovate specific business applications and services that propel the products and services it offers its customers. Managed private clouds are offered in a range of commercial constructions including fixed monthly fees for a reserved size, minimum commitments with consumption for growth to fully consumptive. The commercial models typically require a higher rate for a greater level of dedication; i.e. the less shared resource pools, the higher the price.

It is important for the enterprise to conduct an analysis of the most important features they are looking for in a managed private cloud. As the market evolves, the managed cloud providers are offering ‘niche' private cloud options that are optimized for specific applications and vertical industries.

A sample of the list of considerations includes:

  • Geographic requirements - including cloud hosting locations and local support staff, government certifications and regulations required
  • Data protection and location and the ability to define where the data resides
  • Industry specific applications and certifications that require specialized access including payment card industry (PCI) or HIPPA standards
  • Specific application requirements such as high bandwidth for video or other processing requirements
  • Storage requirements including high I/O for optimal performance, encryption and business continuity requirements
  • Segmentation and security access requisites
  • Level of service required ranging from only minimal on the private cloud platform or more advanced services such as managed application services
  • Internal audit requirements and access
  • Monitoring and transparency requirements, even if the enterprise is buying managed cloud services
  • Customer access constraints through an application or employees only
  • Types of integration required for adjacent systems, partners and ecosystems
  • Predictable usage or variable which is critical for deciding on best commercial models

Using the evaluation criteria and clearly stating the objectives the enterprise is trying to achieve using a private cloud will make the decision/selection process of which private cloud is best suited for the intended outcome.

Once IT leaders have selected the private cloud, it is critical to ensure that the applications that reside in the private cloud are designed and implemented in such a way that supports some level of abstraction to more easily migrate applications and workloads in the future. Each enterprise must map out its strategy for building, deploying and operating applications in the cloud with an understanding of risk and migration options should the business objectives and relationships change. Every public and managed cloud provider is going to continue to innovate in different areas. It will be important to incorporate a health check and evaluation of the services to ensure the cloud is meeting the needs of the business. While migration introduces risk, carefully designed and implemented development/operations help to minimize risk and disruption while ensuring the enterprise maximizes the benefit of ‘adopting the best of both worlds.'

About Shelley Perry
Shelley Perry is the chief product officer for Cloud Solutions at Dimension Data where she is responsible for product strategy and management for the Cloud Business Unit. With her extensive 20-year technical career in engineering, R&D and product management, Shelley has a passion for designing and developing ground-breaking solutions that deliver real value to businesses. Shelley identifies speed to market, rapid scalability and agility as the three key elements of cloud computing having the biggest transformational impact on businesses today.

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