Private cloud use cases: 6 ways private cloud brings value to enterprise business

As
cloud
computing
continues
to
transform
the
enterprise
workplace,
private
cloud
infrastructure
is
evolving
in
lockstep,
helping
organizations
in
industries
like
healthcare,
government
and
finance
customize
control
over
their
data
to
meet
compliance,
privacy,
security
and
other
business
needs. 

According
to
a report
from
Future
Market
Insights
(link
resides
outside
ibm.com),
the
global
private
cloud
services
market
is
forecast
to
grow
to
USD
405.30
billion
by
2033,
up
from
USD
92.64
billion
in
2023. 

What
is
a
private
cloud?

A private
cloud is
a
single-tenant cloud
computing model
in
which
all
of
the
hardware
and
software
resources
are
dedicated
exclusively
to—and
accessible
only
by—a
single
organization.

Private
cloud
combines
the
primary
benefits
of
cloud
computing
(e.g.,
on-demand
compute
resources,
elasticity,
scalability)
with
the
access
control,
security
and
resource
customization
of
on-premises
infrastructure
through
a
self-service
portal
or
interface.

In
a
private
cloud,
a
single
organization
is
typically
responsible
for
all
private
infrastructure,
whether
hosted
in-house
within
a
company’s
physical
location,
in
an
off-site data
center on
infrastructure
owned
or
rented
by
a
third
party,
or
on
a
public
cloud
service
provider’s
infrastructure.
Moreover,
while
an
organization
may
choose
to
run
and
manage
a
private
cloud
themselves,
they
frequently
outsource
partial
or
full
management
to
a
third-party
provider.
All
the
major
public
cloud
providers
(e.g.,
Amazon
Web
Services
(AWS),
Google
Cloud,
IBM
Cloud,
Microsoft
Azure)
and
technology
companies
like VMware and Red
Hat
offer
private
cloud
platforms
and
solutions.  

Enterprise
organizations
in
industries
that
need
to
meet
strict
regulatory
compliance
standards
or
comply
with
data
sovereignty
laws
(manufacturing,
energy,
oil
and
gas) frequently
choose
private
cloud
environments
when
they
need
to
meet
strict
regulatory
standards.
A
private
cloud
also
provides
an
ideal
setting
for
companies
with
workloads
that
deal
with
confidential
documents,
intellectual
property, personally
identifiable
information
(PII),
medical
records,
financial
data
or
other
sensitive
data.

Private
cloud
vs.
public
cloud
vs.
hybrid
cloud 

Before
we
delve
further
into
private
cloud,
it’s
worth
reviewing
the
three
main
types
of
cloud
computing
models—private,
public
and
hybrid.

In
a public
cloud,
a
third-party
service
provides
computing
resources
(e.g.,
ready-to-use
software
applications, virtual
machines
(VMs),
enterprise-grade
infrastructures
and
development
platforms)
available
to
users
over
the
public
internet
on
a
pay-per-use
or
subscription-based
pricing
model.
In
contrast
to
the
single-tenant
architecture
of
a
private
cloud,
a
public
cloud
adheres
to
a multi-tenant architecture
where
end-users
share
a
pool
of
virtual
resources
that
are
automatically
provisioned
for
and
allocated
to
individual
tenants
through
a
self-service API interface.  

A

hybrid
cloud
unifies
public
cloud,
private
cloud
and
traditional
on-premises
to
create
a
single,
flexible
and
cost-efficient

IT
infrastructure.
According
to
the IBM
Transformation
Index:
State
of
Cloud,
more
than
77%
of
business
and
IT
professionals
have
adopted
a
hybrid
cloud
approach,
which
combines automation, artificial
intelligence
(AI) and
other
cutting-edge
technologies
to
centralize
control
and
visibility,
creating
a single
pane
of
glass that
optimizes
cost,
performance,
compliance
and
security
across
all
environments.

Today,
most
enterprise
organizations
combine
hybrid
cloud
with multicloud,
which
refers
to
using
different
services
from
multiple
cloud
service
providers.
A
multicloud
setting
helps
clients
avoid
vendor
lock-in
and
allows
them
to
run
the
most
optimal
computing
environment
for
each
workload. 

For
a
deeper
dive,
check
out
our
blog
post,
“Public
cloud
vs.
private
cloud
vs.
hybrid
cloud:
What’s
the
difference?“

Private
cloud
service
models

All
three
cloud
deployment
models
support
the
following
four
primary
cloud
services:

• 
  
  Infrastructure-as-a-service
  (IaaS) delivers
  on-demand
  compute,
  network
  and
  data
  storage
  resources
  over
  the
  internet
  and
  on
  a
  pay-per-usage
  basis.
  IaaS
  allows
  organizations
  to
  scale
  and
  shrink
  resources
  as
  needed,
  reducing
  the
  need
  for
  high,
  up-front
  capital
  expenditures
  associated
  with
  traditional IT
  infrastructure.
• 
  
  Platform-as-a-service
  (PaaS) offers
  organizations
  a
  complete
  cloud
  platform
  (e.g.,
  hardware,
  software
  and
  infrastructure)
  for
  developing,
  running
  and
  managing
  applications—minus
  the
  cost,
  complexity
  and
  inflexibility
  of
  building
  and
  maintaining
  that
  platform
  on-premises
  (also
  referred
  to
  as
  “on-prem”).
• 
  
  Software-as-a-Service
  (SaaS) allows
  users
  to
  connect
  to
  and
  use
  cloud-based
  apps
  (e.g.,
  Zoom,
  Adobe,
  Salesforce).
  A
  SaaS
  provider
  operates,
  manages
  and
  maintains
  the
  software
  and
  the
  infrastructure
  running
  that
  software.
  SaaS
  is
  the
  most
  common
  public
  cloud
  computing
  service.
• 
  
  Serverless
  enables
  developers
  to
  build
  and
  run
  cloud-native
  applications
  without
  having
  to
  provision
  or
  manage
  servers
  or
  backend
  infrastructure.
  Serverless
  simplifies
  development
  and
  supports DevOps practices
  by
  allowing
  developers
  to
  spend
  less
  time
  defining
  the
  infrastructure
  required
  to
  integrate,
  test,
  deliver
  and
  deploy
  code
  builds
  into
  production.

Private
cloud
architecture

Private
clouds
share
the
same
underlying
technology
as
public
cloud
and
hybrid
cloud
models,
including
the
following:

• 
  Virtualization: Foundational
  to
  cloud
  computing, virtualization uses
  software
  to
  create
  an
  abstraction
  layer
  over
  computer
  hardware,
  enabling
  the
  division
  of
  a
  single
  computer’s
  hardware
  components
  (e.g.,
  processors,
  memory
  and
  storage)
  into
  multiple
  virtual
  machines
  (VMs).
  Each
  VM
  runs
  its
  own
  operating
  system
  (OS)
  and
  behaves
  like
  an
  independent
  computer,
  even
  though
  it
  runs
  on
  just
  a
  portion
  of
  the
  underlying
  computer
  hardware.
  By
  maximizing
  the
  utilization
  of
  hardware,
  virtualization
  allows
  hardware
  to
  be
  shared
  efficiently
  across
  multiple
  users
  and
  applications,
  providing
  the
  scalability,
  agility
  and
  elasticity
  of
  the
  cloud. 
• 
  Managed
  software: Management
  console
  software gives
  administrators
  full
  control
  over
  the
  infrastructure
  and
  applications
  running
  in
  a
  private
  cloud
  setting,
  allowing
  them
  to
  optimize
  security,
  availability
  and
  resource
  utilization.
• 
  Automation: Cloud
  automation tools
  run
  on
  top
  of
  virtual
  environments
  and
  speed
  tasks
  (e.g.,
  server
  provisioning,
  integrations),
  reducing
  the
  manual
  work
  associated
  with
  provisioning,
  configuring
  or
  managing
  cloud
  environments
  and
  making
  self-service
  resource
  delivery
  possible.
  Automation
  also
  underpins
  other
  essential
  cloud
  functions,
  including
  automatic
  scaling,
  
  containerized
  orchestration
  with
  tools
  like Docker and Kubernetes,
  and
  DevOps workflows.
• 
  Cloud-native
  applications: Cloud-native refers
  to
  a
  software
  approach
  for
  building
  and
  deploying microservices
  (also
  called
  microservices
  architecture) in
  which
  a
  single
  application
  comprises
  many
  smaller,
  loosely
  coupled
  and
  independently
  deployable
  components
  or
  services.
  These
  modern
  tools
  allow
  teams
  to
  update
  applications
  quickly
  and
  frequently
  to
  meet
  the
  demands
  of
  modern
  business
  by
  improving
  customer
  experiences.

Private
cloud
types

There
are
four
main
types
of
private
cloud
infrastructure.

On-premises
private
cloud

An
on-premises
cloud
is
hosted
on-site
and
managed
by
an
organization’s
IT
team.
While
an
on-premises
cloud
provides
high
control
over
security,
it
can
be
costly
to
maintain
as
it
requires
upfront
and
recurring
capital
expenditures.

Virtual
private
cloud

A virtual
private
cloud
(VPC) is
a
public
cloud
service
capability
that
creates
a
private
cloud-like
environment
on
public
cloud
infrastructure.
All
resources
(e.g.,
compute,
storage,
CPU
and
networking
capacity)
are
abstracted
from
the
physical
hardware
and
shared
among
virtual
machines
(VMs)
or containers.
A
VPC
allows
clients
to
define
and
control
isolated
virtual
networks
and
then
deploy
those
cloud
resources
into
those
networks.

Hosted
private
cloud

Hosted
private
clouds
are
run
off-prem
on
a
cloud
service
provider’s
servers.
Unlike
a
VPC,
where
organizations
share
servers
with
other
customers,
a
hosted
private
cloud
uses
servers
designated
for
a
single
organization’s
exclusive
use
or-prem
or
in
a
remote
data
center.

Managed
private
cloud

A managed
private
cloud
is
a
single-tenant
environment
where
the
responsibility
for
managing
and
maintaining
the
cloud’s
infrastructure
is
outsourced
to
a
third-party
service
provider.
Physical
hardware
(e.g.,
cooling
systems,

bare
metal
servers,
storage
devices,
networking
equipment)
is
often
housed
in
the
cloud
service
provider’s
data
center,
or
these
infrastructure
components
can
reside
an
enterprise’s
own
data
center.
Beyond
hosting
and
management
platforms,
CSPs
offer
many
other
private
tools
and
solutions,
including
monitoring
and
reporting,
private
cloud
storage, disaster
recovery
(DR) and
more.

Benefits
of
a
private
cloud

A
private
cloud
computing
environment
offers
the
following
distinct
benefits: 

• 
  More
  control
  over
  resources: Private
  clouds
  give
  companies
  more
  control
  over
  their
  IT
  resources
  with
  configurations
  maintained
  by
  internal
  IT
  team
  members.
  Moreover,
  this
  level
  of
  control
  enhances
  the
  flexibility
  needed
  to
  scale
  resources
  up
  or
  down
  as
  needed. 
• 
  Customization: Private
  cloud
  deployment
  allows
  organizations
  to
  customize
  servers
  and
  software
  based
  on
  security,
  compliance
  and
  performance
  needs.
• 
  High
  security: Certain
  industries,
  like
  insurance,
  are
  more
  prone
  to
  data
  breaches
  and
  
  cyberattacks. A
  private
  cloud
  offers
  greater
  visibility
  and
  access
  control
  by
  storing
  sensitive
  data
  and
  applications
  behind
  private
  firewalls.
  Other
  customized
  cloud
  security
  measures
  that
  help
  limit
  the
  attack
  surface
  include
  virtual
  private
  networks
  (VPNs), data
  encryption and
  API
  keys.
• 
  Predictable
  costs: While
  a
  public
  cloud
  is
  based
  on
  a
  pay-per-use
  model,
  unforeseen
  costs
  and
  wasted
  spending
  related
  to
  unplanned
  traffic
  spikes
  or
  idle
  workloads
  can
  occur.
  Private
  cloud
  settings
  can
  be
  very
  cost-effective
  as
  they
  allow
  organizations
  to
  exercise
  more
  control
  over
  the
  resources
  based
  on
  their
  business
  needs.
• 
  Low
  latency: A
  private
  cloud
  offers
  reduced
  
  latency
  as
  resources
  are
  all
  based
  in
  an
  on-premises
  data
  center
  or
  in
  a
  managed
  private
  cloud,
  where
  resources
  are
  utilized
  only
  by
  one
  customer.
• 
  Performance
  optimization: Because
  it
  provides
  enhanced
  control,
  a
  private
  cloud
  enables
  an
  organization
  to
  adjust
  its
  infrastructure
  to
  ensure
  high
  performance
  and
  run
  optimal
  workloads.

Top
six
private
cloud
use
cases  

Here
are
six
ways
organizations
use
a
private
cloud
to
support
ongoing
digital
transformation
and
create
business
value.

1.
Data
privacy
and
compliance
requirements

Because
of
their
limited
access,
private
clouds
are
excellent
environments
for
businesses
with
data
protection,
compliance
or
regulatory
concerns.
For
instance,
all
US
healthcare
companies
must
adhere
to
the
HIPAA
Privacy
Rule,
the
federal
law
that
requires
the
creation
of
national
standards
to
protect
sensitive
patient
health
information
from
being
disclosed.
A
private
cloud
allows
healthcare
organizations
to
utilize
administrative
and
physical
controls
designed
to
store
and
safeguard
protected
health
information
(PHI).

2. Private
cloud
storage

Private
cloud
storage
enables
companies
like
finance
institutions
to
protect
sensitive
data
and
control
who
has
access
to
that
data.
 For
instance,
only
those
administrators
or
team
members
who
have
been
granted
permission
can
interact
with
customer
data
through
a
private
connection
like
a
virtual
private
network
(VPN).

3. Application
modernization

Many
companies
use
private
clouds
to
modernize
legacy
applications
as
part
of
their application
modernization journey.
Private
clouds
can
be
customized
to
handle
sensitive
workloads,
creating
a
smooth
and
secure
transition
to
the
cloud. 

4. Hybrid
multicloud
strategy

Private
cloud
plays
a
crucial
part
in
a
hybrid
multicloud
environment,
which
gives
organizations
the
control
and
agility
to
choose
the
best
cloud
environment
for
each
workload.
For
instance,
with
a

hybrid
cloud
strategy,
a
bank
can
store
sensitive
customer
information
in
a
private
cloud
and
use
a
public
cloud
to
develop
and
test
new
applications,
like
a
loyalty
program
for
its
mobile
platform.

5. Edge
computing

Edge
computing is
a
decentralized
approach
that
brings
storage
and
computing
power
closer
to
where
data
is
created.
For
instance,
healthcare
organizations
can
leverage IoT and
other
edge
devices
to
conduct
remote
patient
monitoring.
Private
cloud
infrastructure
can
be
deployed
at
the
edge,
where
sensitive
data
can
then
be
processed
locally.
This
capability
allows
healthcare
practitioners
to
make
data-driven
decisions
in
real-time
while
adhering
to
patient
privacy
rules. 

6. Generative
AI

Today,
companies
are
beginning
to
leverage generative
AI capabilities
across
cloud
settings,
including
private
cloud.
For
instance,
generative
AI
models
can
strengthen
security
by
analyzing
historical
data
and
identifying
patterns
and
anomalies
in
private
cloud
infrastructure
that
reveal
threats
in
real-time. 

Private
cloud
solutions
with
IBM

As
a
leader
in
hybrid
cloud
solutions,
IBM
helps
clients
customize
the
best
private
cloud
environment
to
meet
their
needs.
For
instance, IBM
Cloud®
Virtual
Server
for
VPC
offers
fast-provisioning
compute
capacity
with
the
highest
network
speeds
and
most
secure,
software-defined

networking
resources
available
on
the
IBM
Cloud. 

Explore
IBM
Cloud
Virtual
Server
for
VPC