As with many IT industry initiatives, some of the definitions used are somewhat hazy (the European Union has even become involved). Private computing is generally used to describe the implementation of cloud computing enabling technologies on private networks -- for example across corporate data centres. This compares with public cloud services, where computing power is purchased from a third-party service provider on an ad-hoc basis.
And as with most other IT solutions, there is no "one size fits all" option. The most appropriate choice depends very-much on the size of the enterprise, the type of activities it carries out, and even the sector it operates in.
While there is an argument that the public cloud is the way to generate the maximum benefit from adopting cloud computing, many enterprises are adopting private cloud solutions as a first step. As with any unproven technology, there is likely to be a reticence among many enterprises to be at the bleeding edge.
The benefits of the private cloud
The most obvious benefit of the private cloud is that enterprises retain control of their data, and where it resides. When using public cloud services, data could be stored and processed anywhere within the service provider's network, which could even entail data being sent across international borders. This has obvious implications for certain user groups, for example in the government or financial sector where the way in which data is stored and manipulated is tightly defined, and even in less regulated sectors data security breaches are both costly and embarrassing.
Another benefit is that the corporate IT department retains full control of the infrastructure, with full visibility to monitor performance and tackle issues where they may arise. In contrast, with the public cloud service providers offer different quality-of-service levels and offer different levels of infrastructure monitoring, which may not suit all enterprises.
The economics of the public cloud industry is in some ways similar to that of the airline industry: computing power is oversubscribed in order to share costs between the largest possible user base, based on the assumption that not all customers will be active at the same time. However, should a number of customers demand access to computing power at the same time, the quality of service delivered will suffer -- which is not a consideration for a private cloud deployment.
It is perhaps worth noting that the most vocal proponents of the private cloud include government departments, who like the cost and flexibility benefits of cloud computing but are not prepared to risk trusting third-parties with vital user data. A private cloud deployment for a group of government departments (or research groups, or other similar bodies) could offer the flexibility benefits of a public cloud service while meeting internal privacy and security requirements.
An in-depth discussion for enterprises looking at building a private cloud deployment is available here.
The benefits of the public cloud
Public cloud computing also has its benefits. Uppermost is flexibility: for enterprises with uneven data processing needs, the ability to add extra capacity to deal with peaks while cutting back during troughs is very appealing. The alternative using a "traditional" data centre model would involve building-out to meet peak demand, but this would also mean that infrastructure remains dormant during quite periods -- going against the corporate efficiency mantra.
Public cloud computing also has cost benefits. Companies pay for computing power as it is used, meaning that should specific projects require additional data processing this can be purchased on an ad-hoc basis, with no wastage from purchasing excess computer power which remains dormant during off-peak periods. A pay-as-you-use model also reduces the amount of up-front capital expenditure needed, which is likely to appeal in a budget-constrained world.
By working with a public cloud service provider, enterprises can also offload the maintenance responsibility of their computing architecture. A significant amount of enterprise IT spend comes from server management costs, including the need to ensure machines are correctly patched and updated, and by off-loading this overhead onto a partner in-house IT resources can be more tightly-focused on core business activities.
Finally, by reducing their reliance on in-house data centres companies can also reduce their direct carbon emissions, which may prove appealing in a market where green credentials are returning to the forefront, after several years where cost-cutting was at a premium.
An emerging alternative is what has been called the "virtual private cloud", which sees the creation of a private cloud within a public cloud service, with the potential to address the limitations of public cloud services by guaranteeing resource availability and data security. A number of players are looking to tap this market.
The third way
Sitting between full-scale public cloud and private cloud deployments are hybrid cloud solutions, which could provide an ideal way for enterprises to exploit the relative strengths of both private and public cloud computing -- some proponents have asserted that this will be the dominant model for most large enterprises, with signs that adoption will take off during 2010. Applications and data which must be tightly controlled will stay in the private domain, while other tasks will cross the barrier into a public computing environment.
In order to exploit a hybrid environment effectively, certain technological barriers need to be addressed. Enterprises need to be able to accurately control and monitor where data resides and how it is manipulated by applications, and interfaces also need to be put in place to enable the barrier between private and public to be crossed where appropriate. An excellent discussion of the requirements for enterprise hybrid cloud adoption is here.