Using private clouds for all the right reasons

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Here's why some customers are adopting the technology -- and what they're doing.

Private clouds are all the buzz these days, so you'd be forgiven for thinking that everybody's doing it. But in fact, fewer companies than you might think have deployed 'true' private clouds.

Forrester found in a recent survey of 2,330 people that 26% of IT executives say they have a private cloud. But among those who claimed they have a private cloud, only 13% implemented the technologies that Forrester says truly define a private cloud, like self-service and automated provisioning, among other features. Instead, they built private environments that have some but not all the features of a private cloud.

Further, some businesses that are building private clouds would really be better off with a standard virtualized data center or with a public cloud, experts say. Around half the time, businesses build private clouds for the wrong reasons and should be doing something else instead, estimates David Linthicum, a consultant at Cloud Technology Partners.

Heartland Payment Systems, which offers payment processing services to merchants, falls squarely in the category of a business that has turned to private cloud for security reasons. In 2010, it embarked on a data center consolidation project, just a year after a very well-publicized data breach. "Security and risk and compliance and liability were all top of mind," says Kris Herrin, chief technology officer for Heartland.

As part of that data center consolidation process, which ultimately whittled down the number of data centers from nine to three, Heartland decided to adopt a private cloud. Now, Heartland is in a unique position as an early adopter of private cloud that is now in the process of upgrading to a second-generation private cloud.

"Our first attempt was very much 'cloud washing,' " he explains, meaning that the vendor, in this case Fujitsu, called it a cloud, taking advantage of the buzz around the term without actually delivering full cloud features. "It was an outsourced managed service offering that was simply whitewashed with cloud-like behaviors, including utility pricing."

Purpose-built private clouds

SunTrust bank is another institution whose high security needs spurred it in the direction of private cloud. The company is taking a unique path. "Our longer term strategy around cloud computing is this: We are building a series of private, internally hosted clouds that are very much purpose-driven," explains Rich Gilbert, senior vice president for information technology and services at SunTrust.

"The challenge for a company like ours is that we have a lot of data internally in place," he says. If it had gone with a public cloud, moving that amount of data to the cloud and back on a regular basis "would have been quite a challenge."

NSN considered sticking with VMware but at the time -- around three years ago -- found that wouldn't allow it to let users instantly spin up new instances.

It looked into Eucalyptus, Nebula and OpenStack and settled on Eucalyptus because it was the only one with a production product at the time. "OpenStack came as a compiler and source code," he says. With Eucalyptus, he figured there'd be someone to call for help if needed.

Xerox, which has built a private cloud in India based on Microsoft's technologies, also controls the resources users can access. Because several different groups use the cloud, Xerox also uses Microsoft tools for internal billing and chargeback, says Raman Padmanabhan, senior vice president and CIO of Xerox Business Services.

   Kris Herrin
Xerox has built a private cloud in India based on Microsoft's technologies, says Raman Padmanabhan, senior vice president and CIO of Xerox Business Services.

Who's hot right now

Fast-forward a few years and VMware is currently dominant among private cloud software vendors, followed by a group of other traditional vendors vying for a leg up. These include BMC, CA, IBM, Hewlett Packard, Cisco and Microsoft, according to Forrester's Nelson.

VMware "doesn't have the strongest solution in the market but it's the most adopted," she says.

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