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Do Private Clouds Make Sense?

By Jeffrey M. Kaplan
May 8, 2009 4:00 AM PT

Now that the concept of cloud computing has become tech the topic du jour, the latest round of debate has centered on whether cloud computing can be extended into the enterprise in the form of private clouds to meet the unique requirements of individual organizations.

Do Private Clouds Make Sense?

Cloud computing zealots are vehemently opposed to this idea. They believe that the fundamental value proposition of cloud computing is the greater efficiencies and better economies that are derived from shared services. They are also suspicious that proponents of private clouds are either in-house IT people who are afraid of relinquishing their operations and responsibilities to third parties, or legacy software and system vendors who are threatened by today's new wave of more cost-effective solutions and services.

While I think both of these concerns are well-founded and valid reasons to question the motives of today's private cloud advocates, I also think there is plenty of room for useful private clouds to prosper.

New Skills, New Meaning

First, I think many of the rapid advancements in the underlying technologies that are permitting public clouds to flourish are already making it possible for viable private clouds to exist within corporate environments as well.

From low-cost servers topped by powerful new virtualization capabilities to more-flexible provisioning and management solutions, these new hardware and software solutions are readily available for individual businesses to deploy in-house, as well as leverage externally.

In fact, the irony in today's cloud computing phenomena is that many of the piece-parts that make the cloud possible are more affordable than traditional data center systems. This is in contrast to earlier eras, when shared services emerged to enable enterprises to take advantage of complex and costly technologies they didn't have the budget to deploy or the skills to manage on their own.

So, if today's cloud computing services are being driven by more economical components than most companies currently have in-house, why not just build your own private cloud to meet your proprietary needs?

The primary reason is that it still takes a new set of skills to put together the high-performance and highly scalable infrastructure that today's public clouds rely upon. It entails a thorough understanding of virtualization and/or open source development experience. An appreciation of the principles of multitenancy is also essential to ensure the kind of scalability that makes cloud computing economical.

It also requires a new set of skills in automated provisioning, monitoring, metering, billing and management of IT resources and software applications to convert an inflexible traditional data center into an agile on-demand resource center.

Most importantly, it takes a new definition of "services-oriented" -- not just a way of architecting systems and software, but being services-oriented in the way you run your data center.

Honest Self-Examination

Industry gurus and trade publications talked years ago about how IT departments had to recast themselves into internal service providers to better meet the needs of their business units, end-users and corporate executives. Building private clouds is a pointless endeavor if your IT department is still behaving like a traditional tech support organization -- reacting to problems and setting its own priorities. Making private clouds successful requires a new attitude about how IT operates to meet the fluctuating needs of the business.

A growing number of IT executives are carefully examining how today's cloud computing leaders have architected their operations and now run their businesses to see how they can apply these best practices to their internal data center operations. This benchmarking exercise can be extremely valuable, even if it doesn't result in a full-fledged private cloud initiative within the organization.

However, the most important outcome of a private cloud computing evaluation process should be honest self-examination. How well can an IT organization meet the needs of its corporate end-users by deploying its own cloud solutions rather than redirecting its limited resources toward fully leveraging the proven capabilities of rapidly maturing cloud computing providers?

Just as today's leading Software as a Service (SaaS) vendors have demonstrated that they can deliver a viable alternative to traditional on-premise applications, the leading cloud computing providers are quickly proving that they can do the same when it comes to data center services.

In both cases, the primary benefits are that IT and business decision-makers can offload or "out-task" a growing assortment of hardware and software requirements to reputable third parties, so they can focus a greater share of their limited in-house resources on their primary business.

Therefore, any attempt to deploy private clouds must be supported by a mixture of total cost of ownership (TCO) and return on investment (ROI) analyses based on a honest self-assessment of your priorities, skills and requirements.


Jeff Kaplan is the managing director of THINKstrategies and founder of the SaaS Showplace. He can be reached at jkaplan@thinkstrategies.com.


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