Enterprises increasingly look to the private cloud

Private cloud gives enterprises best of both worlds, say analysts

Companies interested in moving to cloud computing are increasingly choosing a private cloud for the increased security and, often, compliance features instead of the public cloud, according to a recent survey.

"Companies have noticed that the public cloud only goes so far," said Allan Krans, an analyst with Technology Business Research. "You can't customize it. The security is what it is. [With the private cloud], you don't have to own the infrastructure, but you get all the benefits of cloud but with the additional security, compliance and delivery options."

The analyst firm did a recent study showing that private cloud adoption is growing at a faster rate than companies choosing the public cloud.

The public cloud market has grown 20% year over year, according to the TBR survey that polled about 2,200 enterprise buyers worldwide earlier this year. The private cloud, however, is expected to grow between 40% to 50% a year for the next several years.

The private cloud was an $8 billion market in 2010 and $32 billion in 2013. It's expected to reach $69 billion in 2018, according to TBR.

"We expect the private cloud growth to outpace public at least for the next five years," Krans said. "Private cloud is a better fit for large enterprise customers, especially if they're in regulated industries or have workloads -- like HR and ERP, that have sensitive data, are core to the company's mission or might be regulated -- that aren't a fit for a public cloud offering."

Consumers and some businesses that choose a public cloud, use services from companies like Google or Amazon to store their data or run their apps in a shared space. The service providers also manage the information and services, relieving the company's IT workers from handling it.

Companies also can host and manage their own private cloud or they can hire a provider, such as IBM or Rackspace, which will create and manage a single tenant cloud environment for them.

The managed private cloud often gives companies the best of both worlds -- the ability to offload a big workload, while being able to add extra security, along with compliance and delivery options.

TBR's study showed that 70% of large enterprises with more than 1,000 employees are looking at managed cloud offerings, while 30% are interested in self-built private clouds.

"It makes sense that the private cloud is growing in popularity," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "They could go public, but larger companies prefer private cloud because they feel they have more ownership over the quality of service and the protection of the data. There are regulations in certain industries and countries on data handling, too, which makes the private cloud a better choice in certain circumstances."

This article, Enterprises increasingly look to the private cloud, was originally published at

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin, on Google+ or subscribe to Sharon's RSS feed. Her email address is

See more by Sharon Gaudin on

Read more about private cloud in Computerworld's Private Cloud Topic Center.

Copyright © 2014 IDG Communications, Inc.

It’s time to break the ChatGPT habit
Shop Tech Products at Amazon