Private cloud - in-house, hosted, or hybrid?

Article by Karan Kirpalani



Cloud computing, with its promise of scalable pay-as-you-go computing on IT infrastructure managed by an external service provider, is fast becoming the preferred option for many companies - several industry surveys have by now established that (a) the majority of CIOs are now convinced their enterprises will move to the cloud sooner rather than later, and (b) they would prefer to move to private clouds as opposed to public clouds.

That is understandable. A CIO considering a move to the cloud has three options – public cloud, private cloud, or hybrid cloud.

Most CIOs are reluctant to move their enterprise computing to a public cloud with all its implied vulnerability of being accessed by anyone with an internet connection. The private cloud, with its promise of dedicated resources and higher security, seems a much more attractive option for these CIOs. However, since not all computing resources and access in a company need to be controlled with the same rigor, a company could use a combination of private cloud for critical work and a public cloud for non-critical work – in other words, a hybrid cloud.

Let's look at the pros and cons of each of these options.

The technology perspective

Within the private cloud, there are two variants - in-house or self-hosted private cloud, and a third-party hosted private cloud. Let's call them in-house private clouds and hosted private clouds for simplicity.

An in-house private cloud provides the greatest operational control, leverages existing investments in people and equipment to the maximum, and provides a dedicated on-premise environment that is internally designed, hosted, and managed. The IT infrastructure is completely under your control. The disadvantage is that it is no different from building and running your own datacenter with virtualization and provisioning added in – and building and running your own IT infrastructure is what you were trying to get out of in the first place.

There are some other issues that need to be factored in when it comes to in-house private clouds. Managing the IT infrastructure adds to your operational expense. Second, scaling the in-house private cloud to accommodate business expansion in terms of users or business units can be expensive and time-consuming. Third, while many virtualization service providers do provide management tools, the licensing costs of the software and upgrades are a recurring expenditure. And finally, keeping all this IT infrastructure up to date within implementation deadlines is always a challenge.

In contrast, a hosted private cloud can provide all the cost-benefits of a public cloud and that too on non-shared infrastructure. A hosted private cloud is a dedicated environment that is internally designed, externally hosted, and externally managed. It combines the benefit of controlling the service and architectural design with the advantages of outsourcing. Hosted private clouds allow a company to focus on what they put in their private cloud and how they use it without having to worry on how to implement their private cloud. Think of it as using a utility such as power. An in-house private cloud is like getting your power from a generator. You need to buy the generator, keep it fueled, and keep it in good shape all the time. In contrast, a hosted private cloud is like plugging into a wall socket.

What if you have already invested in an in-house private cloud and are looking to expand it? In that case, a hybrid cloud is an attractive option. Hybrid clouds allow you to leverage your existing investment on in-house infrastructure and seamlessly integrate it with a hosted private cloud managed by a service provider. This allows you to retain complete control over mission critical applications on the in-house cloud, and connect them with the rest of the compute infrastructure on the hosted cloud.

The governance perspective

Though ITSM and ITIL form the basis for governance in cloud computing, many other tools and technologies contribute to play a crucial role.

When it comes to hosted private clouds, the SLA becomes critical to set expectations with the service provider. The SLA should specify the resources (computing, storage, bandwidth) that the provider would commit to your private cloud. It should specify the expected level of availability, communication protocol for service interruptions, and financial compensation for outages. The SLA should include commitments towards normal monitoring such as usage and performance reports, and security and compliance reporting.

In an in-house private cloud, ITSM and ITIL become even more important since you (the company) are responsible for managing and monitoring the cloud infrastructure and performance. This is an involved task and includes managing various technologies - core cloud management software to monitor everything from virtualization to hardware and software performance; a cloud orchestration platform to facilitate metering and billing and to automate provisioning of pooled resources to users on demand; change management database for tracking the creation and deletion of virtual machines; a self-service portal where services (infrastructure, platform, software) can be chosen; and a chargeback system to meter consumption of cloud resources.

For most companies, managing an in-house private cloud is just too much trouble. In fact, it goes against the whole concept of cloud computing where the promise is that someone else manages the IT and you manage your business. In such cases, a hosted private cloud is the obvious answer. In a few cases, the company may decide to go in for a hybrid cloud comprising a private and a public cloud to retain control of their most critical IT infrastructure, applications, and data. In that case, and perhaps only in that case, does an in-house private cloud make sense.