What is private cloud storage?
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Published: 16 April 2024
Contributors: Phill Powell, Ian Smalley

What is private cloud storage?

Private cloud storage is a cloud computing environment intended for use by one company, with all necessary compute resources contained within it. It is one of two related cloud storage options, the other being public cloud storage.

Private cloud storage is an interior approach to data management that an organization selects to take all its data storage needs in-house (often with management or hosting assistance from a cloud service provider). To fully protect cloud data, the organization might need to purchase its own storage devices, develop its own storage space and provide measures to ensure that cloud backups maintain complete data integrity. Dedicated staffers might need to be added.

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Types of private clouds

Private cloud storage relates to four basic types of private clouds:

On-premises private cloud

In this scenario, a company handles all aspects of running its on-premises private cloud, from purchasing software, hardware and any other necessities to ensuring proper operation of the data center and observing all necessary security measures.

Hosted private cloud

In hosted private clouds (also called private cloud hosting), the CSP owns and controls various assets (like cloud storage maintenance or security tools). Hosted private clouds are operated off-premises on servers maintained by the CSP. Hosted private clouds use bare metal servers as their dedicated servers.

Managed private cloud

A managed private cloud typically involves physical hardware that’s hosted in a CSP’s data center. But, in other instances, CSPs provide management support (including support, upgrades and maintenance) for private cloud infrastructure found in an enterprise’s data center.

Virtual private cloud

Virtual private clouds (VPCs) allow businesses to host their websites and run code within a secure setting that gives them access to shared cloud service provider (CSP) resources. In essence, a VPC enables the use of a private cloud environment inside a public cloud framework.

How private cloud storage works

Just as a single-tenant apartment is intended for one occupant, a private cloud incorporates a single-tenant computing infrastructure, environment and infrastructure for the use of one (and only one) organization.

Private cloud storage differs from public cloud storage in terms of access. With public cloud storage, an organization would provision needed compute resources like processing power and data storage by using a self-service portal. With a private cloud, resources remain entirely under the organization's control.

The hosting and management of private cloud resources can be handled in numerous ways. One way is to use the infrastructure and resources already present within a company’s on-premises data center. Another is to create a single-tenant environment through virtualization software. Still another is to use new or separate infrastructure, created by the company itself or a third-party organization.

Whichever method is selected, the private cloud’s resources remain in the control of one organization. However, the private cloud’s location can either be kept on-premises at organization facilities or remotely managed by a third party and accessed over the Internet (those without special clearance cannot access this particular Internet).

Benefits of private cloud storage

These are a few of the numerous advantages of using private cloud storage.

Enhanced, isolated security

Private cloud storage systems deliver the same benefits cloud computing provides. They bring that cloud and its cloud services “in-house” to achieve increased security through enforced isolation of the cloud.

Top equipment performance

Private cloud equipment is often in closer physical proximity. Therefore, it can instantly deliver real-time services while exhibiting compatibility with other equipment. This isn't the case with public cloud equipment, which is often housed in a CSP facility elsewhere. Your CSP could even charge extra fees for maximum speeds and throughput.

Reduced latency

Private cloud offers local, on-premises storage as opposed to public cloud storage. Data doesn’t travel as far, so there’s reduced latency. Compare the journeys taken by data that must be accessed via public cloud storage and data that can be retrieved from on-site private cloud storage. This comes into play when attempting to spin up on-premises apps.

Customized to your specs

Private cloud users do not suffer the limitations experienced by public cloud users. They’re able to customize their private cloud exactly as the organization desires and choose whatever storage technology they like.

Disadvantages of private cloud storage

There are also several negative aspects about private cloud storage that needs consideration.

Required deployment expertise

If an organization opts for private cloud storage, it’s making an ongoing technological commitment because many elements of private cloud storage are a DIY proposition. Full customization means that integrators must make many defining decisions. Specialized training or the use of other resources may also be required to get a company’s IT team up to speed on the nuances of private cloud storage—and handling all of its needs in-house.

Reduced ability to provide scaling

As an organization begins assembling its private cloud storage solution, it soon learns that it’s working with the equivalent of an a la carte menu in some ways. A company must purchase and use more storage to get the functionality to scale upward in a private cloud storage system. Furthermore, if a company that uses a private cloud storage system wants to scale up on-demand, they soon learn how difficult it is.

Hefty costs of doing business

Building a private cloud storage system requires a significant financial investment upfront. It also needs a dedicated budget to pay an ongoing IT labor staff to troubleshoot problems with the system and provide regular maintenance as required.

Private cloud storage providers

More and more companies are offering solutions based around private cloud storage:

  • Amazon Simple Storage Service (S3): Amazon offers private cloud storage services through its popular Amazon Web Services (AWS) line, primarily through two of its products. S3 features some scalability and provides basic, low-cost storage based on the same infrastructure used in Amazon’s online services.
  • Amazon Virtual Private Cloud (Amazon VPC): Another AWS product, Amazon VPC, offers complete control over virtual networks. It includes provisions for establishing connectivity, resource placement and security and is set up within an AWS service console.
  • Microsoft Azure: Microsoft Azure supports private cloud storage directly with Microsoft Azure Private Cloud. With it, users can set up their own private cloud and use a Microsoft computing platform, all designed expressly for organizations that demand total control over their resources and data.
  • Nextcloud: Nextcloud has been growing since its 2016 inception. It offers self-hosted private cloud storage solutions, with variations for enterprises, service providers, education and the public sector. Nextcloud claims to have the most-deployed self-hosted private cloud solution serving the public sector and governments.

Note that this is far from a comprehensive list. Currently, many CSPs offer some services that complement private cloud storage functionality. But, although these services may be used for private cloud storage purposes, they need to satisfy the full definition of the term (for example: Is the storage located on-premises? Are the services accessed by a single client?)

For example, many companies use Dropbox as if it were private cloud storage, but the service can’t be housed onsite because it’s a platform and not a storage facility, plus it has millions of users. All users can access Dropbox privately, but that doesn’t mean it is a private cloud storage.

By the same token, few would doubt Apple’s preeminence among manufacturers, especially in electronics. To be sure, millions upon millions of users rely on Apple iOS to run various Mac devices. Still, its main product in the storage arena is Apple iCloud Drive, which can be described as a highly privatized browser that lets you view your files and share them easily. However, the files must first be stored in iCloud and not on a private server.

(Similar objections prevented listing Android, Google Drive, Linux and Mega, although each offers services that in some way imitate those delivered by private cloud storage.)

Private cloud storage use cases

Companies interested in establishing private cloud storage are most often motivated by the optimal security that private cloud storage offers.

Such companies may also want a constant, continuously-on system that’s not subject to network service interruptions. Beyond that, organizations may also want the quick data transfer rates private cloud storage features.

This list of potential use cases, while hardly comprehensive, does touch upon the wide range of capabilities afforded by private cloud storage solutions:

  • Application modernization: Private clouds are often enlisted to help in efforts to update older, legacy apps. In addition to application modernization (which could be needed in nearly any industry), private clouds can be expressly tailored to manage customized workloads.

  • Data privacy and compliance: Private clouds offer only limited access. For many organizations, that’s exactly what they need because they’re tasked with guarding sensitive private information. Healthcare companies and businesses that must comply with regulatory standards (such as those governing the oil and gas industry) fall into this category. This could also pertain to security companies or industries that protect highly sensitive client data, like banks and other financial services companies.

  • Edge computing: Edge computing is a computing strategy wherein storage and computing power closer are physically located closer to where data is created. For healthcare providers, the applications can be numerous. However, organizations must realize that those assets might be subject to more data breaches and security threats.

  • Generative AI: As AI’s influence starts to be felt, smart companies are learning how to use generative AI capabilities in various cloud settings, such as private cloud. Security-based organizations can benefit from using generative AI models to comb through data and spot oddities in private cloud infrastructure, which can lead to the direct identification of real-time threats. 

  • Hybrid multicloud strategy: Many companies in multiple industries need a hybrid multicloud strategy, where they get to select the best possible cloud environment for every unique workload. With a hybrid cloud strategy, a company can store sensitive customer data in a private cloud while using a public cloud to run standard daily computing tasks.

  • Increased data transfer rates: Organizations often demand lightning-quick data transfer due to the nature of their work. Use cases could include hospitals or other medical providers and any group dealing with emergency situations, limited time and an immediate need for the fast sharing of life-saving data. 

  • Previous outage “victim”: There are organizations whose business has been in some way negatively impacted by previous network outages, and they need to avoid any future occurrences of these potentially costly service interruptions, even if that means the organization must take over the full management of their data assets. 

Continuing developments

There is considerable energy and excitement around the private cloud storage market. However, just because there’s a beehive of activity doesn't mean that everyone’s deriving the same amount of benefit from private cloud storage or that every company has a full grasp on their data holdings and the richer meanings they can provide.

survey conducted by Hitachi Vantara (link resides outside ibm.com), the digital information division of the manufacturer, reported that 55% of enterprises surveyed indicated that they were still coming to grips with the data explosion and that they often found themselves struggling to understand the deeper insights within the data they had gathered.

The same Hitachi Vantara survey revealed that 40% or more of respondents reported losing revenue when they have unplanned downtime. Other challenges highlighted in the survey included cloud complexity, security controls, rigid systems, data isolation and finding sufficiently skilled labor.

While businesses strive to gain clarity in their data, digital threats are on the rise. Criminal tactics such as blackmail, coercion, and cyberattacks are becoming more sophisticated. This underscores the urgent need for robust security measures, including the development of technologies like two-factor authentication.

One online pundit wrote about data (link resides outside ibm.com): “As data breaches and privacy concerns increased, people became increasingly concerned about where their personal information was held and who had access to it.” No doubt some of the current interest in private cloud storage is a reflection of corporate concern that companies feel for their data, not to mention the prized data of their customers.

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