These days, businesses of all sizes can leverage the power of cloud computing to their advantage. However, there’s more than one way they can go about it. And the first decision that any business looking to move into the cloud must make is which type of infrastructure to choose (Public Cloud, On-Premise, or Hybrid).
The trouble is that there’s a vast library of terminology used to describe the myriad cloud options now available. The core decision, however, boils down to picking one of three approaches.
The first option is a private cloud. It’s a type of on-premises computing infrastructure that offers cloud computing benefits while remaining under the complete control of the business.
The second option is to use one of the many public cloud services available on the market. In that scenario, the business would rely on a third party to build, maintain, and scale the cloud resources the business depends on.
Or, as a third option, businesses might opt for a hybrid approach that blends the best aspects of the first two.
To help business decision-makers make sense of their options, here’s a guide to private (on-premise), public, and hybrid cloud computing.
We’ll discuss the advantages and disadvantages of each and the situations when each is the most appropriate. Let’s get started.
Table of Contents
- What Is a Private or On-Premise Cloud?
- Advantages of On-Premise Private Cloud
- Disadvantages of On-Premise Private Cloud
- What Is a Public Cloud?
- The Advantages of a Public Cloud
- The Disadvantages of a Public Cloud
- What is a Hybrid Cloud?
- The Advantages of a Hybrid Cloud
- The Disadvantages of a Hybrid Cloud
- Choosing Between Private, Public, and Hybrid Clouds
What Is a Private or On-Premise Cloud?
When most people think of the term cloud computing, they imagine a vast building filled with racks of servers shared by hundreds, if not thousands, of businesses.
However, the term cloud computing really refers to any computing infrastructure that delivers computing power to users on an on-demand basis.
That means businesses don’t have to pay for access to resources that another company owns. Instead, they can build and maintain their own cloud infrastructure powered by virtualization technology.
That’s precisely the definition of a private cloud. With a private cloud, a business owns its own computing hardware and provisions it as needed to its employees.
Typically, the computing equipment itself remains on-premises in a facility owned or controlled by the business itself. It’s an infrastructure type that gives the business as much or as little computing flexibility as they’re willing to invest in.
Advantages of On-Premise Private Cloud
There are several advantages involved in the deployment and use of a private cloud. They include:
1. Maximum Resource Efficiency
With a private cloud, the business can purchase the exact amount of computing resources required for its workload. That allows them to maximize usage on each piece of hardware, which makes the most of their technology investment.
2. Reduced Operational Costs
Businesses that use private clouds often see reduced operating costs compared to running the same workload through a third-party public cloud.
This is due to the myriad fees imposed by public cloud providers for resources like bandwidth and burstable processing power.
Since the business owns all of the resources in its cloud infrastructure, it’ll know exactly what its operational costs should be every month—with no unexpected charges.
3. Enhanced Security
Private clouds also tend to offer businesses enhanced security when compared to public cloud services.
With on-premises hardware, a business can take a walled-garden approach that dramatically reduces its infrastructure’s attack surface.
They can allow as much or as little external access as they deem necessary, thus reducing opportunities for an attacker to breach their systems.
4. Simplified Regulatory Compliance
Businesses in certain industries have legal obligations surrounding the way they handle certain types of data.
In a public cloud setting, this reduces the number of providers available to such businesses.
With a private cloud, a business can purpose-build its infrastructure to comply with its regulatory responsibilities. Then, they can ensure continued compliance using ongoing internal monitoring procedures.
Disadvantages of On-Premise Private Cloud
Although private clouds come with some significant advantages, they’re far from perfect. Their disadvantages include:
1. Higher Upfront Costs
Private cloud deployments—especially large ones—often come with significant upfront costs.
Businesses that want an onsite private cloud must purchase all of the servers, networking hardware, storages and backup systems and other supporting infrastructure that makes them work.
That can add up to a price tag that might make the use of a private cloud far less attractive.
2. Increased Maintenance and Management Costs
With fully-owned computing hardware, a business must devote significant resources to keeping everything running.
This means keeping spare hardware on hand, paying IT staff to monitor and maintain systems, and covering the costs of managing the provisioning of resources on an ongoing basis.
3. Potential for Downtime
Maximizing resource utilization is one of the key advantages of a private cloud. However, it comes at a price. That price is the potential for downtime when hardware fails or needs replacement.
Without excess capacity online, there’s nowhere to shift workloads when the need arises.
Although businesses can and should build redundancy into their private clouds, it’s a difficult balance to strike while aiming for maximum hardware efficiency.
What Is a Public Cloud?
A public cloud is a type of on-demand computing infrastructure that’s owned and operated by a service provider and shared by multiple organizations.
Companies like Amazon Web Services, Google Cloud, and Microsoft Azure are examples of such providers.
By building massive shared computing infrastructures, public cloud providers leverage the economy of scale to offer full-customizable computing resources to customers at affordable prices.
Businesses access public cloud resources over the public internet, or via encrypted VPN tunnels, in some cases.
When using a public cloud, it’s the provider’s responsibility to minimize downtime and keep enough excess capacity to satisfy fluctuating customer demand.
They also manage and maintain all hardware assets in centralized data centers dispersed around the globe.
The Advantages of a Public Cloud
Public cloud services offer a variety of advantages over private, on-premises technology deployments. These include:
1. Minimal Upfront Costs
Public cloud services offer businesses computing resources with no upfront costs. Most rely on a pay-for-what-you-use model with monthly, quarterly, or yearly billing.
This makes it possible for businesses to start up new computing environments with almost no lead time and then decommission them when they’re no longer needed.
2. Excellent Computing Flexibility
Public cloud providers maintain excess computing and storage capacity to meet almost any conceivable demand.
So, for instance, a business can start a development environment with a fractional processor core and minimal memory and storage dedicated to it.
And if they needed to scale that environment up overnight to service users around the world when their work’s ready for public use, they can.
From a user perspective, this all but eliminates speculative resource planning and shortens development timelines.
3. Simplified Resource Access
Since businesses, by definition, always access public cloud resources remotely, cloud providers configure their systems for maximum access flexibility.
That makes provisioning access to employees a simple matter of assigning credentials and privileges.
Then those employees can access cloud resources from wherever they are without needing complex remote network access methods set up in advance.
4. Enhanced Protection Against Network-level Threats
Cloud providers maintain vast, distributed computing infrastructures. That makes public clouds more resilient against network-level threats like DDoS attacks than the average private cloud. For businesses that rely on maximum uptime and reliability, that’s a massive advantage over private clouds.
The Disadvantages of a Public Cloud
Although public clouds give businesses unbeatable flexibility and access to nearly unlimited resources, they do have some disadvantages. The major disadvantages include:
1. Operational Cost Uncertainty
Although it’s nice to have access to near-unlimited resources, using them isn’t free. That means businesses that experience big fluctuations in resource demand have a hard time predicting their operational costs.
Although it is often possible to set usage limits, doing so trades away the very resource flexibility that makes public clouds so attractive, to begin with.
2. Lack of Transparency
By entrusting their data to a third-party cloud provider, businesses lose visibility into who has access to their data.
They’re essentially relying on the security guarantees of the provider but don’t have any way to audit what’s happening in the data center.
Although most cloud providers are reputable and trustworthy, it’s still a risk that’s inherent to all public cloud use.
3. Potential Compliance Issues
Businesses with regulatory responsibilities—or even those that fall under data privacy laws like the EU’s GDPR—have specific needs concerning compliance.
While the major cloud providers do offer compliance options to fit most situations, they’re not suitable for every application.
More specifically, businesses with certain auditing requirements may find public clouds lacking the tools they need to stay compliant.
What is a Hybrid Cloud?
As the name suggests, a hybrid cloud refers to the use of a combination of public and private cloud resources to meet business computing needs.
In most scenarios, a hybrid cloud consists of two distinct components. There’s an on-premises private cloud that handles the bulk of the business’s computing needs.
Then, one or more public cloud providers augment those resources to provide the ability to expand or by providing access to specialized systems the business doesn’t own.
Most hybrid clouds depend on high-bandwidth WAN connections (such as AWS Direct Connect) to bridge together their private and public assets. That facilitates the easy flow of workloads between the two, as necessary.
The Advantages of a Hybrid Cloud
Hybrid cloud deployments represent a best-of-both-worlds approach to cloud computing. Their principal benefits include:
1. Capability to Handle Occasional Workloads
A hybrid cloud allows a business to maintain its existing on-premises infrastructure if its adequate for its normal workloads.
By adding the capabilities of an on-demand public cloud, however, hybrid cloud users can accommodate things like seasonal or occasional workloads without incurring year-round expenses.
2. Complete Data Control
In a hybrid cloud, a business can choose to keep sensitive data within its private cloud infrastructure while shifting less-sensitive workloads to the public cloud.
That can be a key capability concerning compliance and other risk-limiting business initiatives.
3. Simpler Paths to Expansion
Hybrid clouds offer businesses a pathway to expansion with fewer roadblocks. For example, a business might set up its private cloud to maintain compatibility with its chosen public cloud provider.
Then, they could develop public-facing apps in-house and publish them to the public cloud when they’re ready. It’s a type of flexibility that could be cost-prohibitive for either a private or a public cloud infrastructure alone.
The Disadvantages of a Hybrid Cloud
Although hybrid clouds can offer the best of both private and public clouds, they do have disadvantages. They are:
1. Increased Complexity
Operating a hybrid cloud is akin to operating a private and a public cloud at the same time. Keeping everything working in harmony isn’t always easy. For some businesses, a hybrid cloud creates complexity that isn’t worth dealing with.
2. Increased Expenses
A business operating a hybrid cloud must purchase, maintain, and manage its on-premises computing infrastructure. It also must manage and attend to a public cloud deployment.
This means increased up-front and ongoing management costs—neither of which is desirable unless there’s a good reason for accepting them.
3. Potential Security Risks
Linking a private cloud and a public one into a hybrid cloud can also create security risks.
In effect, each part of the infrastructure inherits the security strengths—and weaknesses— of the other. Without proper planning and ongoing care, that makes security oversights and risk a major possibility.
Choosing Between Private, Public, and Hybrid Clouds
The reality is, no two businesses have identical computing needs. That means there’s no clear and simple way to choose between private, public, and hybrid cloud deployments. There are, however, some common-sense guidelines businesses should follow.
In general, small businesses with limited computing needs should stick with private clouds.
So too, should businesses with specialized compliance requirements or those with inelastic computing demand.
This is because, when not operating at scale, public clouds are not cost-effective and can’t compete with on-premises hardware.
In all cases, however, businesses should choose a virtualization technology that offers an easy transition to a hybrid or public cloud approach in the future.
On the other hand, businesses with big fluctuations in computing needs should consider a public cloud deployment. They’re simple, scalable, and cost nothing when not in use.
As long as the cloud provider meets all relevant compliance and security requirements, they’re a perfect fit for businesses with ever-changing needs.
Last but not least, hybrid cloud deployments are best left for two situations. First, they’re an excellent option for businesses with large preexisting on-premises hardware investments.
They provide a ready path to expansion and transition to public cloud services, should the need arise.
The second scenario where a hybrid cloud makes sense is for businesses with seasonal or periodic computing demand spikes.
They allow such businesses to achieve maximum hardware utilization throughout the year, with an option for excess computing capacity when necessary.