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What is private cloud?

Private cloud (also known as an internal cloud or corporate cloud) is a cloud computing environment in which all hardware and software resources are dedicated exclusively to, and accessible only by, a single customer.

Private cloud combines many of the benefits of cloud computing—including elasticity, scalability and ease of service delivery—with the access control, security and resource customization of on-premises infrastructure.

Many companies choose private cloud over public cloud (cloud computing services delivered over infrastructure shared by multiple customers) because private cloud is an easier way (or the only way) to meet their regulatory compliance requirements. Others choose private cloud because their workloads deal with confidential documents, intellectual property, personally identifiable information (PII), medical records, financial data or other sensitive data.

By building private cloud architecture according to cloud native principles, an organization gives itself the flexibility to easily move workloads to public cloud or run them within a hybrid cloud (mixed public and private cloud) environment whenever they’re ready.

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How private cloud works

Private cloud is a single-tenant environment, meaning all resources are accessible to one customer only—this is referred to as isolated access. Private clouds are typically hosted on-premises in the customer's data center. But, private clouds can also be hosted on an independent cloud provider’s infrastructure or built on rented infrastructure housed in an offsite data center. Management models also vary—the customer can manage everything itself or outsource partial or full management to a service provider.

Private cloud architecture

Single-tenant design aside, private cloud is based on the same technologies as other clouds—technologies that enable the customer to provision and configure virtual servers and computing resources on demand in order to quickly and easily (or even automatically) scale in response to spikes in usage and traffic, to implement redundancy for high availability and to optimize utilization of resources overall.

These technologies include the following:

  • Virtualization, which enables IT resources to be abstracted from their underlying physical hardware and pooled into unbounded resource pools of computing, storage, memory and networking capacity that can then portioned among multiple virtual machines, containers or other virtualized IT infrastructure elements. By removing the constraints of physical hardware, virtualization enables maximum utilization of hardware, allows hardware to be shared efficiently across multiple users and applications and makes possible the scalability, agility and elasticity of the cloud

  • Management software gives administrators centralized control over the infrastructure and applications running on it. This makes it possible to optimize security, availability and resource utilization in the private cloud environment

  • Automation speeds tasks—such as server provisioning and integrations—that would otherwise need to be performed manually and repeatedly. Automation reduces the need for human intervention, making self-service resource delivery possible

In addition, private cloud users can adopt cloud native application architectures and practices—such as DevOps, containers and microservices—that can bring even greater efficiency and flexibility and enable a smooth transition to a public cloud or hybrid cloud environment in the future.

Benefits of private cloud

Building a private cloud makes it possible for all enterprises—even those in highly regulated industries—to avail themselves of many of the benefits of cloud computing without sacrificing security, control and customization. Specific advantages of private cloud include the following:

  • Full control over hardware and software choices. Private cloud customers are free to purchase the hardware and software they prefer, versus the hardware and software the cloud provider offers

  • Freedom to customize hardware and software in any way. Private cloud customers can customize servers in any way they want and can customize software as needed with add-ons or through custom development

  • Greater visibility into security and access control, because all workloads run behind the customers’ own firewall

  • Fully enforced compliance with regulatory standards. Private cloud customers aren’t forced to rely on the industry and regulatory compliance offered by the cloud service provider

The chief disadvantage of private cloud is the higher cost, which can include the cost of purchasing and installing new hardware and software and the cost of managing it (which might involve hiring more IT staff.) Another disadvantage is limited flexibility—once an organization invests in hardware and software for its private cloud, adding capacity or new capabilities requires more purchases. Virtual private cloud and managed cloud services (see below) can lessen these disadvantages to a degree.

Private cloud versus public cloud

Public cloud is a multi-tenant cloud environment, where the same computing resources are shared among multiple customers—sometimes hundreds or thousands of them. In public cloud, an independent cloud services provider owns and maintains the infrastructure, and access to resources is offered on a subscription basis or via pay-per-use pricing. The model is analogous to the way that we purchase utility services, such as access to a municipal water supply or electric power in our homes.

Public cloud sacrifices much of the control and security of private cloud, but provides significant benefits in exchange:

  • Greater elasticity and scalability: With public cloud, a customer can add capacity in response to unexpended surges in traffic, without purchasing and installing new hardware

  • Lower cost of entry: Most customers can begin using public cloud services without adding physical compute resources of their own

  • Faster access to the latest technologies: In many cases, economies of scale enable cloud providers to offer the latest hardware and software faster than customers could if they had to purchase and install them themselves

For a closer look at public cloud, see the following video: 

Private cloud versus hybrid cloud

A hybrid cloud integrates public and private cloud infrastructures. In this model, the two types of cloud are joined together into a single, flexible infrastructure, and the enterprise can choose the optimal cloud environment for each individual application or workload. To make best use of this type of cloud computing, an enterprise must rely on technologies and orchestration tools that allow it to move workloads seamlessly across the two environments in order to meet performance, cost, compliance and security requirements.

A hybrid cloud can enable an ideal division of labor—an enterprise can keep sensitive data and applications that can’t easily be migrated to the cloud in its on-premises data center, while using the public cloud for access to Software-as-a-Service (SaaS) applications and any additional platform, storage, or compute capacity it might need. It’s this ‘‘best-of-both-worlds” approach that drives a continued increase in hybrid cloud adoption—81% of respondents to a recent Gartner survey (external link) indicated they work with multiple public cloud infrastructure providers and management models.

Virtual private cloud

A virtual private cloud (VPC) is a service from a public cloud provider that creates a private cloud-like environment on public cloud infrastructure. In a VPC, virtual network functions and security features give a customer the ability to define and control a logically isolated space in the public cloud, mimicking the private cloud’s enhanced security within a multi-tenant environment.

VPC customers can benefit from the public cloud’s resource availability, scalability, flexibility and cost-effectiveness, all while retaining much of the security and control of private cloud. In most cases, a VPC will be less expensive to build and simpler to manage than an on-premises private cloud.

Managed private cloud

Several vendors are now offering fully managed private cloud solutions. This model differs from VPC in that a managed private cloud is a single-tenant environment. Responsibility for managing and maintaining the infrastructure is outsourced to a third-party service provider.

The physical hardware usually resides in the service provider’s data center, although vendors also offer management services for infrastructure located in an enterprise’s own data center. Managed private clouds allow for greater customization than is possible in a multi-tenant environment and incorporate the usual security benefits of a private cloud but are more expensive than self-managed infrastructures.

Private cloud storage

Also known as internal cloud storage, private cloud storage entails drawing upon cloud service delivery models to supply storage to an enterprise. Data is stored within the data center on a dedicated infrastructure, but access is delivered to business units—and possibly partner organizations—as a service. This allows the enterprise to take advantage of some of cloud computing’s benefits—such as elasticity and rapid provisioning—while retaining a single-tenant architecture.

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