A shift in Understanding of Private and Public Cloud


For the first half of 2014, I heard more and more frequently that of Private Cloud was interpreted as a Shared Cloud hosted outside of the consumer company. For example, this was articulated by people in the OVUN Cloud Workshop and in the 6th Annual World Cloud Forum.

The executives I’ve talked to in different events expressed a lot of concerns that unified contracts with Public Cloud providers like Amazon or Google omitted specific needs of their companies. Particularly, it related to compliance obligations if the company operated in the regulated domain.

A basic definition of Cloud as a technical phenomena defines 5 fundamental forming qualities:

  1. Common infrastructure
  2. Location independence
  3. Online accessibility
  4. Utility pricing
  5. On-Demand resources

where “Common” – it uses pooled resources and dynamically shared infrastructure; “Location-independent” – a Cloud service should be ubiquitous and responsive; “Online” – a Cloud service should be accessible over a network; “Utility” – encompasses a creative value with usage-sensitive pricing; “on-Demand” – it is about a right quantity of the right resources available exactly when they are needed.

Let’s compare a popular ‘definition’ of Private Cloud versus Public Cloud from, for example, Wikipedia. A “Private cloud is cloud infrastructure operated solely for a single organization, whether managed internally or by a third-party, and hosted either internally or externally”. That is, the key here is how many organisations use the cloud infrastructure. At he same time, a “cloud is called a “public cloud” when the services are rendered over a network that is open for public use.”

Though aforementioned ‘definitions’ are supposed to categorise the same entity – Cloud – by deployment model, I think we cannot compare them because it appears as a comparison of apples to oranges. Judge yourself: the ‘definition’ of Public Cloud does not define what does mean “open”:

  • If two or more companies get together and create a virtual computing environment for their use only, it will not be a Private Cloud according to the aforementioned ‘define’
  • If one company creates such an environment, but lease it to only certain consumer companies, it will not be a Private Cloud and it will not be a Public Cloud.

Moreover, a virtualised environment is created for the use of one consumer company only, where a utility pricing would come from? A notion of ‘utility’ makes sense only if it is multi-time usable or reusable, but this depends on the needs of that single consumer company and may never materialised. The consumer company can require such virtualised environment, which might be location dependent and resource reserving.

My conclusion is: that popular ‘definition’ of Private Cloud is inconsistent with the market and technology states. It is meaningless as a Cloud. Probably, such single-consumer dedicated virtualised environment is not Cloud at all. To me, Private Cloud is what other people call ‘Shared Private Cloud’ (this expression is an oxymoron because it contradicts the core characteristic of “private cloud” discussed above). That is, Private Cloud may be shared between multiple consumer companies but under special rules of access.

Thus, I believe that Public Cloud differs from Private Cloud in the customisation of the consumer contract. Public Cloud can provide “Utility pricing” and “on-Demand resources” because it maximises its economy scale based on unification and shared standardisation (“Common infrastructure” and “Location independence” at large).

When a consumer tries to negotiate a customised contract or customised capabilities of access to and controls over its assets in the Cloud, the provider’s economy of scale drops almost exponentially (it is a known, but carefully hidden, fact of Cloud economy). As a result, Public Cloud providers do not negotiate their contracts with consumer companies.

In contrast, providers of Private Cloud in my definition, are open for negotiations of the needs of each consumer company and can compromise their Cloud economy of scale for appropriate monetary compensation. As a result, Private Cloud (in my definition) is for most successful consumer companies while Public Cloud is for those who cannot afford Private Cloud (in my definition) and potentially expose themselves to the incompliance and fines (obviously, I mean a serious use of Cloud for business applications, not for eventual scalability tests).

A confusion, however, comes from marketing. In my definition, Microsoft Azur and IBM’s Cloud solution (IBM Managed Cloud Services) look like Private Clouds. Certainly, Microsoft and IBM would love to be open and public. Clouds from Amazon and Google are Public Cloud, but I may be incorrect here.

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