The Case for Private Clouds

The Case for Private Clouds

If you've been reading this series, you now have a better understanding of the much-discussed term "private cloud." In the previous two parts of this series, I described the features and service capabilities of private clouds.

In particular, I noted that the move to private cloud computing requires the separation of infrastructure provisioning and business application resource consumption. In essence, a private cloud requires that resource requests and provisioning must interact as service requests and responses in an automated environment, avoiding any manual intervention.

Now I want to focus on benefits and challenges of a private cloud implementation. This week, I will discuss the "pros" of private clouds; next week, I will turn to the "cons."

Obviously, there's a lot of excitement about cloud computing. Many organizations are considering private clouds as the primary method to achieve cloud computing benefits. As an aside, private clouds are also sometimes known as internal, although a strong case can be made that the benefits of an internal cloud can also be obtained through a cloud provider, akin to a hosting service.

Since I've covered the overall benefits of cloud computing before, I won't repeat them here. There are many of them, which is why so many IT organizations are interested in the topic. Assuming you want to implement cloud computing and achieve those benefits, why does a private cloud make sense? The main advantages:

1. A private cloud leverages existing infrastructure With some incremental investment, a company's existing data center can be made cloud-capable. Almost every organization has large amounts of installed equipment, much of it of recent vintage. Many of these organizations also have recently gone through significant data center upgrades or expansions. Turning to external cloud providers would require scrapping the installed base of equipment, necessitating a write-off-no music to the CFO's ears.

Instead, existing infrastructure can be used as the foundation of a new cloud computing capability. This is smart, finance-wise-and IT-wise. The CIO avoids presenting senior management with a message of "You know all that investment we made over the past two years? Well, the latest thing in IT, cloud computing, requires us to trash it and start over with someone else's infrastructure." Instead, he or she can say "You know all of that investment we made recently? I know you'll be glad to hear that it will help us move to the next level of IT support of our business goals-quick response to computing demands and easy scalability to meet changing business conditions." I don't know about you, but I'd much rather have that second type of conversation!

Most of the major vendors are coming out with add-on bits of kit that can be integrated into existing IT infrastructures to support automated provisioning and dynamic reassignment of resources. With some amount of incremental investment, a data center can be moved from efficient (high utilization) to agile (quick flexibility in face of changing demand profiles).

2. IT has no profit motive External cloud providers have to turn a profit-and that profit comes from margin tacked onto basic costs. Internal IT, by contrast, focuses on providing efficient service in a cost-effective manner. By definition, running as a cost center bypasses the margin (i.e., cost) associated with profit. A private cloud offers the opportunity to achieve agility at a low price.

A more troubling prospect is the fact that so many IT organizations have been burned by previous outsourcing arrangements. You think the arrangements will be so much less expensive, but then it turns into a nightmare of change orders (more money), poor responsiveness (outsource provider cuts cost-heavy services to the bone), and lousy service (the carefully crafted SLA becomes a "target, not a commitment."). Internal IT is dedicated to one thing: business unit satisfaction. So keeping things inside and avoiding the need to turn a profit allows the overall company to benefit from cloud computing at the lowest possible price.

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