Cloud Topics

What Is a Private Cloud?

By Nicole Lim / April 22, 2020

What Is a Private Cloud next to a digitalized cloud

Many businesses have moved their electronic apps, systems, and resources to a cloud environment, an infrastructure that is owned and managed by a cloud provider. It allows a business to run and deploy software applications with the added benefits of security and accessibility. Customers can use cloud marketplaces to find, purchase, and manage cloud-based applications. There are four different types of cloud environments including:

  • Public;
  • Private;
  • Community;
  • Hybrid.

Businesses that work with a large amount of data may want more security and can benefit from using private clouds. These are made specific to each business so there is no access from outside users.

How Do Private Clouds Work?

Private clouds use a variety of technology that is shared only by the organization using it. This can be helpful for businesses that use marketplace platforms to launch their applications. The resources hosted on a private cloud can be managed in a few different ways:

  • It could be based on resources and infrastructure that is already present in the organization’s data center;
  • A third-party can provide a new, separate infrastructure;
  • The private cloud could use virtualization to combine resources sourced from physical hardware.

No matter how the private cloud is developed and managed, the only entity that can access the cloud is the business or organization that it was made for.

Private Cloud vs Public Cloud

A public cloud is the most common type of cloud people are used to. Examples of a public cloud include:

  • iCloud provided by Apple;
  • Google’s cloud;
  • Amazon Web Services.

These clouds can sync data that can be accessed from any device. They are not as customizable, nor are users responsible for their maintenance. While this can be beneficial for those less tech-savvy, it’s important to note that users have the least amount of control with this type of cloud model. For instance, a user’s data can still be shared, even if they create their own cloud account. People who use public clouds should read the terms and agreements carefully so they know how companies are using their data. For this reason, businesses typically shy away from public clouds to keep data safe. Private clouds can offer more security for businesses and enterprises.

Private Cloud vs Hybrid Cloud

A hybrid cloud consists of combining more than one cloud model. These combinations could consist of:

  • At least one private cloud and one public cloud;
  • Two or more private clouds;
  • Two or more public clouds.

Businesses can use both cloud models for different purposes to enjoy the different benefits. This model is ideal for businesses that process or need more flexibility for their workloads. Software as a Service (SaaS) and digital commerce businesses are a good example of this: they can host data on a private cloud while hosting a website on a public cloud. It’s important to note that businesses should be using software and services that are used by both private and public clouds to allow for greater compatibility. Additionally, businesses will have to understand that they must relinquish control when using public clouds, and host sensitive data and workloads on private clouds.

Virtual Private Cloud vs Private Cloud

A virtual private cloud (VPC) is a private cloud that is hosted by a public cloud provider. This way, a business can take advantage of the scalability and convenience of public clouds while still benefiting from the security of a private cloud. The VPC can only be accessed by the organization it was created for, however, because it is hosted by a public cloud provider, users have more access to computing resources.


While similar to a hybrid cloud, a multi-cloud model consists of multiple cloud services of one type, either public or private. The clouds are not interconnected, but expand a business’s cloud environments to offer more security. Additionally, having multiple cloud services can help businesses find the perfect solution for each aspect of their business. For instance, one cloud service could house and archive data or records while another hosts a software application for customers. Multi-cloud methods also help protect businesses from outages by ensuring there is always a backup ready and waiting.

Types of Private Clouds

There are different types of private clouds that differ in infrastructure, function, hosting, and management that may meet the individual needs of a business:

  • Hosted: If a private cloud is hosted, the servers are used by a single organization and not shared with others. However, the service provider configures the network and updates and maintains the hardware and software.
  • Managed: In this scenario, the service provider manages every aspect of the cloud for the business. Organizations will use this option if they do not have the staff to manage the private cloud on-site.
  • Software Only: The service provider only provides the software needed to run the cloud environment. The business already owns the hardware. This option is ideal for virtualized environments.
  • Software and Hardware: Often service providers will sell private clouds included with the necessary hardware and software. A business can choose to manage it themselves or have a third-party manage it.

Private Cloud Benefits

Cloud computing offers many benefits, especially when businesses are using private cloud services. For instance, private cloud services can offer:

  • Flexibility: Private clouds can help businesses that have unpredictable computing needs and require direct control over their cloud environments.
  • Resource availability: Private cloud users don’t share their cloud systems with other organizations, allowing them to access resources quickly and efficiently.
  • Security: Only people who have access to the private cloud are allowed to use it.
  • Regulatory compliance: Since only certain organizations have access, private cloud networks can help address compliance issues in certain industries, including banking, healthcare, and insurance.
  • Customization: Private cloud services can be customized to meet the needs of different users or organizations, which allows for dynamic options to deploy their applications and workloads.

Private Cloud Disadvantages

There are also some potential disadvantages to using a private cloud network, including:

  • Complex technologies: This isn’t limited to private cloud solutions — all cloud resources require some knowledge and training, especially when first undertaking the shift to the cloud. This may be hard for employees of a business to get used to if they are still using legacy systems. Companies can provide on-site training for employees or increase their IT staff to help mitigate this problem.
  • Cost: Private cloud services may cost more than other cloud methods because the setup and maintenance can be more bespoke, and greater customization features can add to the setup costs. It requires an investment in hardware and continuous maintenance which could call for a larger IT staff. However, using a virtual environment could lower these costs, and help offset expenses in the long run.
  • Scalability: Unlike public clouds, a private cloud may not meet all the demands of a growing business. Luckily, software is generally easy to scale on a private cloud; businesses should ensure they have the IT staff or cloud service provider to support scalability.

Cloud Pricing

Cloud pricing can vary based on vendors, the hardware and software, and the services that are included. Additionally, many vendors do not offer straightforward, one-time prices. Rather, they offer yearly subscriptions that could change in price depending on the different services, software, and hardware used. Companies also have the option of building their own private network, but may need to invest in the necessary software, hardware, and IT staff to maintain it.

It’s also important to note that private clouds are typically more expensive than public clouds. This is because there is no need to purchase hardware or software to use it, and companies only pay for the services they need. Additionally, all hardware, software, and infrastructure is managed by the cloud provider. Private clouds, on the other hand, are managed by the organization or a third-party provider, which can increase costs. Private clouds also use customized resources which can also affect costs.

Are Private Clouds Worth it?

If a business is looking to take advantage of cloud computing but prioritize security, a private cloud service may be the best of both worlds. There are many options when it comes to private cloud services that, depending on the business’s needs, could help it thrive. For instance, SaaS companies could take advantage of the privacy and security of a private cloud to house and archive their data.

Private clouds can offer a business a variety of benefits. By understanding the different types and what they offer in terms of services and pricing, businesses can make more informed decisions about their business needs.