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Public vs. Private vs. Hybrid Cloud

With 81% of enterprises having at least one application or portion of their infrastructure in the cloud (IDG), chances are that your organization has already invested in the cloud. But how familiar are you with the different cloud options and are you using the right mix of solutions for your organization’s needs?

In this week’s blog post, we explore the three main deployment models for cloud-based infrastructure: private cloud, public cloud, and hybrid cloud. For each model, we’ll provide a brief definition and overview, highlight key advantages and disadvantages, and explain why organizations might choose that deployment model to meet their cloud computing needs.

What is the Public Cloud?

When the term “cloud” is used, it’s most frequently referring to public cloud providers, specifically the “Big 3” (AWS, Azure, Google Cloud). Public cloud service providers deliver cloud computing services from global networks of data centers, allowing their customers to access IT services, applications, computing power, data storage, and virtualization capabilities from anywhere in the world with an internet connection (or with a purchased dedicated connection to meet bandwidth-sensitive requirements).

The largest public cloud infrastructure providers in 2020 are:

  • Amazon Web Services (AWS): While Amazon is known for its eCommerce and shipping capabilities, public cloud services are the most profitable and fastest-growing part of Amazon’s business. AWS reported $11.6 billion in net revenue for the third quarter of 2020, accounting for 57% of Amazon’s net operating income and making AWS the largest public cloud service provider in the world with just under a third of total market share.
  • Microsoft Azure: As of 2020, Microsoft Azure commands 19% of the global market share for public cloud services.
  • Google Cloud Platform: The third-largest public cloud service provider in the world, Google Cloud Platform commands 7% of the public cloud market share and saw its revenue jump by 45% to $3.44 billion in Q3 2020.

These providers offer Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) products on a pay-as-you-go business model, making it cheaper and easier for their customers to access cloud-based infrastructure on an as-needed basis.

Advantages of Public Cloud

  1. Pay-per-Use Pricing – The pay-as-you-go pricing model offered by public cloud service providers means that organizations can start accessing the resources they need without costly up-front investments in IT infrastructure.
  2. Rapidly Scale Computing Resources – Public cloud service providers make it easy for organizations of all sizes to rapidly scale virtual machines, processing power, and data storage availability to meet demand.
  3. Tax Benefits with OpEx vs CapEx – Purchasing IT infrastructure is a capital expense, while paying for cloud services is an operating expense. This produces a tax benefit where organizations can claim the full amount of their cloud computing expenses against their income each year.

Drawbacks of Public Cloud

  1. Data Gravity Concerns & Vendor Lock-In – Organizations that use a single public cloud provider may find that switching vendors becomes prohibitively costly and complex over time.
  2. Security Concerns in Multi-Tenant Environments – Some organizations may be initially concerned about how each cloud provider protects data in a multi-tenant environment.
  3. Loss of Control over IT Infrastructure – Public cloud infrastructure is managed by service providers, leaving customer organizations with less control and fewer opportunities to develop customized solutions that meet their business needs.

When to Use the Public Cloud

Organizations across all industry verticals are leveraging public cloud services to drive digital transformation and respond to challenges in the environment.

In the hospitality sector, airlines and hotel chains are moving their platforms to the public cloud, making it faster and more convenient for their customers to create bookings. Financial service providers are moving into the public cloud to better manage spikes in demand for computing resources that occur at the end of every month and reduce the data storage costs associated with producing more granular forecasts.

In the public sector, financial regulators are using public cloud infrastructure to analyze millions of brokerage transactions every day. During the COVID-19 pandemic, cities like Corona, California moved their infrastructures into the public cloud to enable desktop virtualization and remote work for their employees.

What is Private Cloud?

Private cloud deployments, also known as “corporate cloud” or “internal cloud,” are cloud computing environments accessed by a single organization or customer. While public cloud services offer a multi-tenant environment (data from multiple organizations may be hosted in the same environment or on the same servers), private cloud deployments have just a single tenant and host data for applications for that organization exclusively.

Private clouds are likely to be hosted and accessed from within the customer organization’s private network. An organization may deploy a private cloud from its on-premise data center or from rented infrastructure in an off-site data center. Some organizations contract with managed service providers (MSPs) who host and manage the customer’s private cloud deployment in the MSP’s data center.

Advantages of Private Cloud

  1. Keep Control of IT Infrastructure – Organizations retain full control of their on-premise corporate cloud deployments and related infrastructure, networks, etc.
  2. Protect Sensitive Data – Private clouds are considered the best option for securing sensitive data, as access is managed through private and secure networks instead of the public Internet.
  3. Meet Legal Compliance Requirements – Organizations can leverage private cloud deployments to meet legal compliance requirements for data security and privacy.

Drawbacks of Private Cloud

  1. High Ownership Costs – Private cloud deployments require up-front investments in IT infrastructure that elevate the total cost of ownership (TCO).
  2. Scalability Challenges – Private clouds don’t come with the same scalability benefits as the public cloud, making it more expensive to scale services during demand surges or as your business grows.
  3. Integrating New Technologies – Organizations building private cloud infrastructures must integrate complex new technologies to support virtualization, orchestration, and automation of cloud-based services.

When to Use the Private Cloud

For many organizations, hosting data on private cloud infrastructure may be the best, or sometimes the only way to ensure compliance with data security and privacy regulations such as:

  • Health Insurance Portability and Accountability Act (HIPAA)
  • European General Data Protection Regulation (GDPR)
  • Payment Card Industry Data Security Standard (PCI DSS)
  • National data localization laws
  • State-level data privacy laws like New York’s SHIELD Act or the California Consumer Privacy Act (CCPA)

Organizations that collect personal health information (PHI), for example, may be covered by the data security rules found in the HIPPA. These include requirements such as:

  • Ensuring the confidentiality, integrity, and availability of all digitally stored PHI
  • Implementing role-based access controls to regulate access to PHI
  • Limiting physical access to data storage facilities

Private cloud deployments allow covered entities to maintain control of their data better, restrict physical and electronic access, and achieve compliance with HIPAA and other data privacy/security regulations.

What is Hybrid Cloud?

A hybrid cloud deployment is a computing environment that includes a public IaaS platform (AWS, Microsoft Azure, or Google Cloud Platform, for example), a private or corporate cloud deployment, and the technology to connect these environments and orchestrate workloads between them.

In the past, organizations created hybrid cloud architectures by connecting their private cloud environments to the public cloud via complex middleware applications. Today, organizations are more likely to focus their efforts on building portable applications that are easily transferred from one environment to another without using APIs. Portability is accomplished using technologies like containerization and microservice design and container orchestration platforms like Kubernetes.

Application interoperability, workload portability, and data portability are all necessary for an efficient and effective hybrid cloud deployment.

Generic Hybrid Cloud Infrastructure:

Advantages of Hybrid Cloud

  1. Balancing Security and Scalability – Hybrid cloud deployments allow organizations to protect their data in the private cloud while enjoying public cloud’s scalability benefits.
  2. Managing Disaster Recovery – Organizations can recover on-prem workloads into the public cloud, avoiding service interruptions that could negatively impact the customer experience. In an on-prem or private cloud scenario, that same level of resiliency might require a second data center and all of the associated real estate, hardware, software and staff costs even when it’s not being used.
  3. Cloud Bursting to Meet High Service Demand – Organizations with hybrid cloud capabilities can manage transactions on-prem or in the cloud during times of low demand, then access additional cloud resources when demand for app services exceeds their current capacity.

Drawbacks of Hybrid Cloud

  1. Application and Data Portability Challenges – Interoperability and portability of data and applications are essential for enabling workload orchestration between cloud environments.
  2. Complexity of Implementation – Hybrid cloud implementations can involve significant technical overhead. Organizations may find it challenging to recruit individuals with the right skills and experience to build and operate hybrid cloud infrastructure.
  3. Managing Resources and IT Spending – Organizations with hybrid cloud capabilities must develop strategies for allocating cloud resources between departments, accurately accounting for costs, and optimizing resource utilization to minimize TCO.

When to Use the Hybrid Cloud

Hybrid cloud deployments allow organizations to simultaneously leverage the security and compliance benefits of the private cloud or on-prem data centers, along with the cost-effective scalability and flexibility benefits offered by public cloud service providers.

This combination of benefits is especially valuable for organizations in industries that experience predictable spikes in demand for application services during peak business times, such as:

  • Finance, where month-end and quarterly reporting requires large volumes of data processing
  • Accounting and Auditing, which experiences cyclical tax season peaks
  • Retail, where transaction volumes surge between Black Friday and Christmas
  • Marketing, where scheduled ad placements can generate surges in web traffic or demand for application services

With a hybrid cloud architecture, organizations in these industries can use private cloud servers to secure their most sensitive data and manage normal levels of demand for computing resources. When demand surges, they can use public cloud computing resources to meet the demand and deliver consistent, high-quality customer experiences.

Which Cloud to Choose for Your Organization

There’s no one-size-fits-all solution when it comes to choosing the most efficient type of cloud deployment for your organization. Your decision will depend on numerous factors, including your desired use cases for cloud services and your organization’s budgetary and technical limitations.

With that being said, hybrid cloud deployments offer organizations the maximum flexibility in determining where and how they store and process data or manage application workloads. This can provide significant cost savings and operational advantages, but organizations will need to successfully navigate the complexity of implementing a secure hybrid cloud solution and effectively allocate public and private cloud resources to realize the benefits.

Faction Multi-Cloud Data Solutions

A multi-cloud computing architecture is one that incorporates cloud services from multiple public cloud providers and/or multiple private clouds. Faction’s multi-cloud data solutions empower organizations to future-proof their IT investments, avoid cloud vendor lock-in, and reduce the management and technical overhead associated with complex cloud implementations.

Faction Cloud Control Volumes (CCV) is a cloud-attached storage solution that makes your data more accessible and available when you need it. CCV is compatible with Faction-hosted public cloud and all major public cloud service providers.

Faction also delivers enterprise-grade disaster recovery through our cloud-based Hybrid Disaster-Recovery-as-a-Service (HDRaaS) solution, designed to fail-over on-prem VMware workloads to VMware Cloud on AWS.

Ready to find out how Faction can help you optimize your cloud infrastructure, make the most of your big data, and build a more resilient business?

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