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6/3/2010
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The Why And How Of Private Clouds

Exclusive research shows more companies planning private cloud use than public cloud.

IT pros may be getting sick of cloud computing terminology, but make no mistake: The private cloud is a new and powerful data center strategy. What IT leaders are sorting out today is just how much of the concept they want to embrace.

Consider Indiana University, which has about 1,300 virtual servers and select dynamic storage capabilities in what Dennis Cromwell, head of enterprise infrastructure, describes as a "fairly significant deployment of internal cloud services" at two data centers, at its Bloomington and Indianapolis campuses.

Yet the IT team decided to stop short of a self-provisioning model, like what Amazon.com and other public cloud services provide. For university staff, who request computing capacity via an online form, it looks much the same. But IT staffers then take several manual steps to provision capacity, usually within a half day. Cromwell says the university doesn't need a quicker turnaround, and there's an added governance benefit. "We continue to like to have a little bit of control," he says.

More than half of the 504 business technology professionals we surveyed say they're either using private clouds (28%) or planning to do so (30%). However, cloud computing isn't a single, shiny toy a company buys. Instead, it's a new approach to delivering IT services. It requires certain key technologies, but more broadly it focuses on standards and process.

Two critical characteristics differentiate private clouds from conventional data centers: the ability to pay only as you use services, and the ability to scale usage up or down on demand. Tactically, it includes pooling of computing and storage resources to provide that elasticity. Some people also consider self-provisioning, where end users can allocate their own computing capacity, part of a private cloud.

Cutting IT costs is the No. 1 driver, but nearly as important is the ability to quickly meet user demand, our survey finds.

Here's a dash of perspective on that 58% using or planning to use private clouds--few if any of those companies have bet the business on it. Only 15% devote more than 20% of their IT budgets to cloud computing. A third say they spend 10% or less, while 38% have no defined budget for it. Creating a private cloud takes a technology investment, but only 24% of those with no plans for private clouds cite excessive costs as a barrier to cloud computing.

In fact, there's no dominant obstacle--the most-cited barrier (37%) is "no business need." Security concerns come next, followed by legacy systems and processes that don't fit the model. This mix of barriers, rather than any one big problem, fits with our conclusion that most IT organizations are experimenting with private cloud technology and figuring out whether and how to apply it.

A key concern is whether private clouds will provide long-term savings, particularly whether that up-front investment in data center efficiency will deliver sufficient economies of scale for a single business, even a very big one, when compared to the massive scale in a public cloud environment.

Business technology teams should expect to find plenty of fragmented products, and they'll likely struggle to put all of the pieces together to create a true elastic, on-demand private cloud. However, many of the steps you should be taking to run a better data center--like increased automation and consolidation--will help lay the groundwork for private clouds.

InformationWeek: June 7, 2010 Issue To read the rest of the article, download a free PDF of InformationWeek magazine
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