The Why And How Of Private Clouds

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

Michael Biddick, CEO, Fusion PPT

June 4, 2010

4 Min Read

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 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.

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About the Author(s)

Michael Biddick

CEO, Fusion PPT

As CEO of Fusion PPT, Michael Biddick is responsible for overall quality and innovation. Over the past 15 years, Michael has worked with hundreds of government and international commercial organizations, leveraging his unique blend of deep technology experience coupled with business and information management acumen to help clients reduce costs, increase transparency and speed efficient decision making while maintaining quality. Prior to joining Fusion PPT, Michael spent 10 years with a boutique-consulting firm and Booz Allen Hamilton, developing enterprise management solutions. He previously served on the academic staff of the University of Wisconsin Law School as the Director of Information Technology. Michael earned a Master's of Science from Johns Hopkins University and a dual Bachelor's degree in Political Science and History from the University of Wisconsin-Madison. Michael is also a contributing editor at InformationWeek Magazine and Network Computing Magazine and has published over 50 recent articles on Cloud Computing, Federal CIO Strategy, PMOs and Application Performance Optimization. He holds multiple vendor technical certifications and is a certified ITIL v3 Expert.

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