Which type of private cloud should I use?

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I recently had an interesting meeting with colleagues in Raleigh, N.C. We presented the classification of public cloud, private cloud and hybrid cloud. Some colleagues challenged the word ‘private’.

In IBM’s definition, ‘private’ cloud means the cloud is inside an enterprise’s boundary and only serves the in-house business of the enterprise. However, as my colleague emphasized, ‘dedicated’ may be more suitable. ‘Private’ means an enterprise ‘reserves’ some resources on ‘public’ cloud.

The following diagrams show the differences between the two ‘private’ clouds:

types of private cloudsprivate cloud in public cloudThis is very interesting for enterprises who would like to begin using cloud technology in their IT solutions.

The value proposition

There are many reasons for a CIO to adopt cloud solutions. Just like choosing a smartphone, a tech savvy young person might select a sleek and complicated one; a young graduate may select the most powerful CPU; my parents would like to choose a simple one with large keys. The value belongs to the user, but is provided by the operator.

Then, I would like to just prompt three value points for the solution:

  • Reduce IT cost
  • Improve IT services level
  • Minimize the IT operation risks

From the above diagrams, I would like to call the IBM ‘private’ one as ‘private in dedicated’ cloud and my colleague’s as ‘private in public’ cloud.

No. Value Private in Dedication Private in Public
1 Reduce Cost No Yes
2 Improve Services Yes Yes
3 Minimum Risks Yes Yes or No

The key value for ‘private in dedicated’ is security. Everything in hand means everything is under control. The question is: why should an enterprise adopt this model at a higher cost?

On the other hand, cost may be saved with the ‘private in public’ model. However, the operators have to reserve dedicated resources for the user. Then what will actually be improved from the traditional Internet Data Center model, with a potentially higher cost?

‘Private in dedicated’ cloud helps the enterprise to leverage cloud technology to improve the internal IT delivery model. ‘Private in public’ cloud helps the enterprise to leverage cloud technology at a ‘pay-as-you-go’ cost with guaranteed services level.

Both models will bring the enterprise an integrated value chain with different value points. The points will benefit the enterprise’s IT in cost reduction, services level improvement and risks mitigations.

Unfortunately, both solutions may be too complex to deploy. And, they may be too expensive. Please consider the cost structure in the ‘private in dedicated’ model:

  • Dedicated servers & storages
  • Dedicated networks bandwidth
  • Shared operation services
  • Shared resiliency
  • Virtualized software
  • Scalability

Doesn’t it look similar to with a traditional Internet Data Center (IDC) from item one to item four? The structure may be more expensive for an enterprise. So, when should you adopt such solutions?

When and where to use

when to use private cloudI have been involved in several large enterprises that would bring cloud technology in their IT business. It is the most common case for adopting the ‘private in dedicated’ model that the enterprise would like to make both cross geography and cross business units operations for the generally available business. Meanwhile, another benefit may be the faster response to Internet challenges by the pre-defined delivery model.

It looks like another campaign which is similar to the previous efforts for data center consolidation. Operations and application are consolidated. Now it’s the turn for architecture components.

The architecture components include computing resources, software, applications or even business processes. The consolidated computing resources will bring both an improved services level and a set of mitigated risks.

For example, a traditional bank in China will use several development centers to develop its business applications. The centers will use different library of application frameworks, different technologies and different operation mechanisms. If there is a ‘private in dedicated’ cloud model, the pre-defined technology architecture will help them to come back to the common platform again.

Another example is a cross geography logistic giant. The giant could have a lot of warehouse management systems which are operated separately. The ‘private in dedicated’ model helps them to use a centralized warehouse management system for consolidated processes.

These examples tell us why enterprises might adopt the model at a higher price.

I have also helped a large enterprise to prompt its business events with software as a service (SaaS) and other contents interactions. The problem in China is that there are three telecommunication operators who seldom support each others’ subscribers. I have to design a ‘private in public’ model. The model helps them to provide content distribution as well as scalability in all IDCs. This will help the enterprise to improve their services level to different subscribers.

Another example is that a logistic enterprise could leverage the local cloud (or global cloud provider with local resources, such as IBM SmartCloud Enterprise). This may solve both regulations (servers should be behind the great firewall in China) and local speed (geography CDN).

The Opportunity

private cloud opportunityThe models provide a good opportunity to combine ‘private’ in and outside enterprise together. We could think it is a hybrid cloud which integratse the capabilities from internal and external IT providers.

For example, the hybrid model could be adopted by a global logistic enterprise. The enterprise could build a warehouse management system on ‘private in dedicated’ for consolidated operations. And it could also leverage a cloud provider in China to use ‘private in public’ model to collect near real-time data. The data may include warehouse in-out tracking, vehicle GPS tracking and customer mobility access portal.

In this hybrid example, the enterprise could leverage the values of both secure access and be fast to deploy. However, this may bring to another problem — how to manage the resources together.

IBM Global Technology Services has some investment on the ‘cloud aggregator.’ A cloud aggregator will provide three items:

  1. An integrated portal to apply resources across different cloud provider
  2. An integrated BSS to consolidate the metering and billing
  3. An integrated monitoring system to monitor the virtual servers

The aggregator would bring possibilities to adopt the ‘private’ hybrid model. It will help the enterprise to use an integrated system to access cloud services. Thus the burden of IT to separate the resources will be relieved somehow.

Will it be in production soon? I think the model of hybrid ‘private’ will be adopted by several enterprises in the coming year.

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