What is Hosted Private Cloud and Private Cloud Computing?

A private cloud is also known as an on-premises cloud architecture, and it’s deployed on a business’s in-house datacenter. More vendors nowadays offer their own private cloud services to boost or even replace a business’s own private cloud environment.

The private cloud definition from The National Institute for Standards and Technology (NIST) says that “the cloud infrastructure is provisioned for exclusive use by a single organization comprising multiple consumers. It may be owned, managed, and operated by the organization, a third party, or some combination of them, and it may exist on or off premises.”

What are the Benefits of Private Cloud? 

While there are key differences between the benefits of private, public, and hybrid clouds, a private cloud, on its own, does offer some of the main features you’ll see in a public cloud. Namely, businesses can still enjoy self-service, scalability, the ability to provision and configure virtual machines (VMs), scale resources up and down when needed, and automation to help simplify tasks.

Not to mention, organizations can implement chargeback tools to track computing usage and ensure the business only pays for the resources or services they’re actually using.

Enabling self-service access to resources

Many developers say the biggest impediment to their productivity is lack of access to resources. Developers and testers, for example, need easy, on-demand access to development and test environments—with up-to-date test data—to be productive. A private cloud that enables self-service access to these resources, can reduce time to market, increasing the cadence at which your company delivers new services and features. Many IT teams rely on IT service management (ITSM) services such as ServiceNow. A properly designed private cloud should deliver this benefit and integrate with any ITSM solution you use.

Supporting both traditional and cloud-native applications

Established enterprises often have tens or hundreds of traditional business applications that they need to continue to support, even as they make new investments in cloud-native applications. A properly designed private cloud should flexibly support both models with a common operational model and a single management console.

Designed the correct way, a private cloud can deliver all the benefits of public clouds. Make IT operations more efficient by freeing up budget, saving staff time, and eliminating complexity. It fosters agility by enabling fast and easy resource access, simplifying deployments, supporting traditional and cloud-native application models, and delivering meaningful automation.

Increasing automation

As enterprises run more and more applications and services at scale, manual tasks and workflows become a huge impediment. It’s impractical, and quite likely impossible, to grow your IT staff at the same pace as infrastructure services. A properly designed private cloud should deliver this benefit and enable automation so that IT teams can deploy, operate, and scale infrastructure and application stacks with less effort, while providing IT-as-a-Service (ITaaS) to empower development and business teams.

Facilitating data access and analysis

A private cloud should help consolidate your data and make it more accessible and easier to integrate, accelerating analysis and deepening insight, not create more silos.

What are the Challenges of Private Cloud Computing?

Despite the advantages of private cloud, there are multiple limitations that cannot be ignored. In the next section, we will explore how to address and overcome these challenges.

Inflexible architecture

Your private cloud may need to adapt to a variety of application needs from traditional enterprise applications to cloud native applications. Inflexible infrastructure software and 3-tier architectures can make that difficult.

Complex data services

Enterprise environments typically have a need for a private cloud with block and file storage services in addition to the object storage common in the public cloud. Meeting those needs may require deploying and managing different hardware for each data service, adding cost and complexity. Separate storage pools decrease overall capacity utilization and limit flexibility. With data playing such a critical role in digital transformation, the importance of addressing this challenge shouldn’t be overlooked.

Too much of a good thing

Despite the control a private cloud can provide, vendors may package multiple products, create unneeded deployment and managerial complexity, and ultimately, create “shelfware.” Not to mention, businesses will experience high IT expenses thanks to licensing fees, ELAs, and more.

Vendor exclusivity

Private clouds running on legacy infrastructure have yet another issue: They’re locked into the virtualization provider. Regardless of the vendor or the hypervisor, customers will find themselves unwillingly glued to a single vendor’s products.

Multiple layers

To connect to the public cloud, businesses will need to add another software layer that is not natively integrated. Larger enterprises with multiple IT teams and specialists may be more likely to build private clouds, but the team overall will struggle with complex, ineffective tools.

Brittle automation

A private cloud with an inflexible architecture and complex data services inevitably makes automation harder. As a result, it is more time consuming to create automations, automation failures are more likely, and troubleshooting and maintenance is more complex.

Supporting Private Cloud with Hyperconvergence 

Though private cloud has its benefits, especially in regards to security, many businesses don’t intend on only using an on-prem cloud, hoping instead to expand to a hybrid or multicloud architecture in the future. That said, many IT decision makers have to pause that goal due to major budget constraints, keeping them from preparing for the multicloud operating model. 

That’s why it’s important businesses make sure their underlying infrastructure is well-suited to support your hybrid and multicloud initiatives, or, if they intend on sticking with a private cloud long-term, that the infrastructure delivers public cloud-like power and flexibility into the on-prem environment. But ultimately, the separate storage, servers, virtualization, and networking components in legacy, 3-tier architecture are the root of the issue. 

With hyperconverged infrastructure, these separate components merge, eliminating silos. Indeed, this architectural solution supports the private cloud paradigm, providing:


  • Reliable security configurations and audits
  • Data-at-rest encryption
  • Micro-segmentation
  • Built-in data protection, backup, and disaster recovery
  • Rapid, non-disrupted deployment
  • IT-as-a-Service (ITaaS)
  • Reduced operating expenses and improved ROI


Supporting private cloud with hyperconvergence

Top 20 Private Cloud Questions Answered

Clouds, clouds, clouds. When you think of a "cloud," do you think of public clouds? You wouldn't be alone—many organizations think "heading for the clouds" means adopting a public cloud, but that same agility and flexibility can be harnessed in your very own datacenter with a robust private cloud.

top 20 private cloud questions answered

Why are More Businesses Moving to the Advantages of Private Cloud?

Nowadays, about 52% of organizations run on some form of a private cloud. But this majority, according to recent research, is set to grow even further. In a recent IDC study, researchers found that 80% of organizations had moved applications out of the public cloud and back onto their private cloud. They also found that within the next 2 years, 50% of all public cloud applications will move back on-premises. What can account for that switch?

In nearly all cases, the reason came down to cost savings. In a separate study, IDC also found that predictable workloads, which account for the majority of all enterprise workloads, on average were about twice as expensive to run in the public cloud as than on-premises. There’s security and predictability in a private cloud, leading many organizations to opt for the cost-saving benefits of running their own cloud architecture in-house.

Designing a Private Cloud

Designing an effective private cloud requires careful planning and consideration of your current and future needs and priorities. A private cloud for enterprise needs should be built on a foundation that can provide self-service capabilities, app-centric security, and reliable data protection, disaster recovery, and automation.

A proper foundation with those capabilities can help solve the two biggest pressing needs for any enterprise to succeed in the digital economy:

  • Increase IT efficiency
  • Enable digital innovation

A properly designed private cloud helps address both of these needs. Increasing IT efficiency is a prerequisite for accelerating innovation. A successful private cloud will free up budget. In most enterprises, traditional IT still consumes the majority of the IT budget, leaving only a small percentage to dedicate to innovation. Gartner reported that traditional IT accounted for 81% of spending on average, with just 19% going to cloud spending. Traditional spending is forecast to drop to 72% by 2022. If you can drive down spending by shifting workloads from traditional IT to private cloud, more budget becomes available to allocate elsewhere.

Frees up staff time. If your IT staff spends all of its time on infrastructure management tasks like provisioning, updates, data protection, and troubleshooting to address operational requirements and satisfy user requests, that leaves very little time or focus for innovation. Rationalizing and automating operations with a private cloud and enabling self-service so that developers and other users can satisfy more of their needs themselves can get your team off the treadmill.

3d illustration of Cloud networking concept in abstract technology background.

Finally, it eliminates complexity. Traditional IT environments often have silos of dedicated compute and storage infrastructure around important applications like databases, an approach that is both complex and inefficient. Silos of storage for unstructured data—including file shares and object storage —add to operational complexity. Established enterprises may have heterogeneous infrastructure and technical debt dating back years. This is not only expensive, it’s a substantial barrier to innovation.

Unless you can remove the friction from your on-premises operations, your digital transformation will never be complete, and your business objectives will remain at risk.

Private Cloud vs. Public Cloud vs. Hybrid Cloud

There are three general cloud deployment models: public, private, and hybrid.

A public cloud is delivered through an independent, third-party vendor. Most popularly, Amazon Web Services (AWS) and Microsoft Azure dominate the market for public cloud. Companies like these maintain compute resources that their customers can utilize when needed. Businesses who use the public cloud share these resources. This is commonly referred to as a “multi-tenant” environment.

On the opposite end of the spectrum, a business can create, own, operate, and maintain their own private cloud. While there is more security in this format, on-premises cloud architectures aren’t always the most flexible or scalable because the organization must depend on the resources they already have rather than a third-party vendor’s resources.

Many businesses have realized the benefits of both public and private clouds, and have thus moved on to adopt a hybrid cloud model. In this architecture, a private cloud connects with a public cloud, letting businesses run workloads in both worlds. Commonly, the business will primarily use their private cloud environment, and then “burst” into the public cloud when needed. For a hybrid cloud model to work, there must be a high level of compatibility between the software that runs the clouds and the services used in both.

What is private cloud?

Private Cloud is an On-Ramp to Hybrid Cloud

Having a well-architected private cloud will make your hybrid cloud deployment easier and help ensure success if needed at a later time. Some of the reasons for this are just common sense. If your private cloud is burdened by the challenges mentioned earlier, IT is going to have a lot less time to devote to hybrid cloud as well. Hybrid applications that are dependent on services from your private cloud will suffer the effects of its limitations, especially performance, automation, or integration challenges. 

The right private cloud solution should actively facilitate integration with the public cloud. This includes tools for copying, replicating, or migrating VMs and data from one location to another, support for different hypervisors, and the ability to support both VMs and containers. By choosing the right private cloud solution, you effectively create an on-ramp to the hybrid cloud that makes hybrid operations easier and more cost effective, delivering better results.

Related resources


Public Cloud Benefits You Want. Private Cloud Control You Need.


Private Cloud for Dummies


Deliver More Business Value with a Nutanix Private Cloud


 Top 20 Private Cloud Questions Answered


The Definitive Guide to Private Cloud

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