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Hosted private cloud: Key benefits and drawbacks

Christopher Null Freelance writer

A recent Gartner report claims that 28% of spending in key IT segments will shift to the cloud by 2022. While that growth signals an increased desire for the flexibility of the cloud, the fact is the remainder of the IT budget, representing the bulk of organizations' workloads, still resides in the secure confines of the corporate data center.

Amazon, Google, and Microsoft are increasingly trying to lure those workloads into the cloud with the concept of "hosted private cloud." To that end, within the last three years, we've seen those companies' respective introductions of AWS Outposts, GKE (Google Kubernetes Engine) On-Prem, and Azure Stack

Each promises to combine the security of the traditional corporate firewall with the agility and innovation of the vendors' existing public cloud offerings. It's an attractive pitch, but what does a hosted private cloud really offer your business?

Here are key benefits and drawbacks to be aware of.

From in-house to hosted

The benefits of deploying cloud technology on your own infrastructure are well documented. Traditional private cloud solutions eliminate the "noisy neighbor" problems inherent to public, shared cloud platforms. This is where the workload in one container, container pod, or virtual machine ends up hogging most of a machine's resources.

That makes private cloud sound seductive on paper, but in practice private clouds have so far proved more difficult to deploy and maintain than initially thought, said Todd Matters, chief architect and co-founder of RackWare, a cloud services provider.

Shouldering the weight of hardware and software costs and other resources has simply been too big a burden for many companies, which has caused numerous private cloud initiatives to fall short of expectations (particularly ROI goals), or to suffer from delays and setbacks.

To help customers bridge the gap between expectations and the difficult realities of deploying and maintaining private clouds, providers have started advertising services that leverage their own proven technology in single-tenant environments, Matters said.

These services have been alternately advertised as "managed private cloud" and "hosted private cloud," though there’s really no conceptual difference between them.

"The major differences are not in category but rather in individual provider offerings and services."
Todd Matters

With hosted private cloud solutions, companies can tailor the hardware to their requirements without having to manage every technical aspect of it. Customers also have full control over their security footprint and can safely host applications not suitable for multi-tenant public cloud, such as those governed by regulatory issues.

In short, hosted private cloud gives organizations complete oversight of the environment while relaxing the need for on-premises hardware management.

Economic and operational benefits

Traditional, on-premises private clouds require knowledgeable systems administrators to manage capacity planning and other aspects. Jonathan Sullivan, CTO of network-services provider NS1, said this team needs to know how to run co-located systems, including procuring and upgrading hardware, shipping and racking/stacking logistics, troubleshooting, and replacing failed hardware.

If an organization doesn't have that knowledge in-house, he said, it will have to decide whether it can, or even wants to, build that team, or if it would be better off investing in other parts of the organization.

Conversely, hosted private cloud pushes everything on the infrastructure side up to the cloud provider, said Mark Runyon, a principal consultant for Improving, a technology management and consulting services firm. The provider is in charge of managing the resources, and the organization can tap into many of the benefits of the public cloud, such as ease of scalability and performance advantages, through this conduit.

You also don't need experienced staff on hand to manage it.

"With the hosted private cloud, you aren’t incurring the sizable cost of furnishing the hardware and software licensing. These represent considerable cost savings for most organizations."
Mark Runyon

Security's the big thing

Of course, the key driver behind most private cloud implementations tends to be security. Compliance concerns like HIPAA or PCI often dictate the need for a private cloud environment.

Do compliance issues prevent companies from taking advantage of a hosted private cloud? Not at all, said Runyon. The main benefit of on-premises private cloud—shielding your apps and data from the world outside the firewall—is also offered by a hosted private cloud.

Cloud hosting providers cover the physical server access and security required to achieve compliance, relieving the organization's responsibility to implement those controls.

Selection criteria

So which hosted private cloud platform is best for your business? While the big three cloud platforms are similar in many ways, a few particulars can make one or another more attractive.

"The key differences I see is that AWS owns the infrastructure whereas Azure lets the client interact with their vendor partners for management, said Runyon, who has experience working with both services.

"This makes Outposts a simpler option to deploy since it is controlled through the AWS console. On the other hand, Azure Stack is the more seasoned service, while AWS Outposts is a newer offering."
—Mark Runyon

On balance, however, he believes they offer very similar services, and organizations are best served looking at which cloud platform as a whole makes the most sense when making the choice between them.

Is hosted private cloud right for you?

As with most business computing strategies, the old adage of choosing the right tool for the job applies here. The first question to ask is whether any type of private cloud makes sense for your organization. 

For most, the answer should be yes, Improving's Runyon said. Data breaches are an all-too-common occurrence these days, and taking steps to wall off critical data from the outside world has become a necessity. It is even more important for those organizations dealing with compliance issues.

Although in most cases a hosted private cloud will be the way to go, Runyon said, there may be exceptions.

"The one place I can see on-premises winning out is if an organization has a significant investment and contractual obligation to hardware and software providers and is a large enough enterprise to take on the additional cost."
—Mark Runyon

RackWare's Matters said that another plus to hosted services is that the vendor often provides the customizations necessary to ensure that the private cloud is successful.

"Perhaps, in the future, cloud stack software, its functional semantics, and APIs will become stable enough to make it easier for companies to take on these deployments themselves. In the meantime, hosted private cloud will serve to fill that gap."
—Todd Matters

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