Is a Public Cloud Cheaper Than a Private Cloud?

For many companies, affordability is among the main benefits of cloud computing. Offering all of the storage capabilities of traditional servers without the overhead required to maintain them, cloud computing provides flexibility and functionality at a reduced rate.

Those new to the cloud computing sphere often believe that public clouds are the most affordable solutions due to the hands-off nature and extreme scalability. And, in some ways, this can be true. However, discounting the benefits of private clouds due to perceived cloud model costs can result in missed opportunities for any company.

What Is Cloud Computing?

Cloud computing refers to the delivery of data center services, storage space, applications, and other resources via the web rather than stored on in-house servers or machines.

The concept of cloud computing dates back to the early days of the internet, in which computer networks were just starting to form. The initial discussions surrounding what eventually evolved to become the web we know today involved the idea of sharing data across systems – a key facet of the internet as well as a central tenet of the current cloud options. The term itself allegedly dates back to 1996, with the term “cloud” being used to describe the space between the end user and the server activity on the other side.

Today, cloud computing has evolved to encompass a wide variety of services that are shared via the web. As a primary method of providing software resources, data center options, and development platforms, cloud computing is extremely valuable today and it is highly likely to continue its rapid ascent in the years to continue.

How Cloud Computing is Affecting IT Budgets

Reduced IT costs are at the heart of the popularity of cloud computing. For small companies or those with tight budgets, affording the resources that accompany maintaining a traditional on-site server can be a struggle.

The possibilities provided by cloud computing can significantly alleviate this burden, however. Many platform options are managed by a third party, putting the onus on a provider rather than the company using the cloud. This opens up opportunities significantly; when all IT resources are provided by someone else, companies are able to cut costs or take on tech options otherwise unavailable.

A single IT individual, including salary and benefits, can cost $100,000 a year or more, particularly if this person needs to have experience in maintaining a server as well as handling other in-house functions. For those with a desktop support person already, this can be a large incremental increase in overhead that is not necessarily sustainable, especially for small or growing companies.

When data centers rely on a cloud-based infrastructure, the need for additional human capital costs is all but eliminated. In many cloud setups, everything from IT help desk functions to security are covered by the provider.

Public vs. Private Cloud Computing

Cloud-based services come in a few different forms, but for most companies, only public clouds get a nod. This is somewhat understandable; for those without a solid grasp in cloud computing infrastructure, this often feels like the only avenue. However, this is not actually the case. While public clouds are a common choice, they aren’t the only choice. Private clouds are a viable alternative, providing some benefits unavailable in a public environment. This is what you need to know about the difference between public and private clouds.

Public Cloud Services

Accessibility: Public clouds are accessible to anyone who pays to use cloud space. There are few limits on how many customers can have data stored within the same cloud environment.

Provider: Public clouds are hosted by a third-party provider that offers space freely to users who sign up and pay the per-user fees. The most common public cloud providers include Microsoft Azure, Google Cloud, and Amazon Web Services.

Cloud Costs: Public clouds are generally priced on a per-user basis. As more users are added, prices increase. Some clouds also price based on space needed to store data.

Storage Space: Storage space is virtually unlimited and can scale based on customer needs, both upwards and downwards.

Functionality: Public cloud functionality is limited to whatever options the provider offers. There is no real way to add additional capabilities to what a public cloud has available, limiting options for companies with unique needs. Security is provided by the cloud services provider and customers have very little control over what measures are in place.

Private Cloud Services

Accessibility: Private clouds are limited to one single company or business unit. Space is not shared with any other customers and clients, keeping data protected and secure.

Provider: Private clouds are available in one of two ways: owned and hosted by a company in a similar manner as a traditional server or provided by a third-party host that provides exclusive use to a customer.

Cloud Costs: In-house private clouds incur similar overhead expenses as standard servers. Hosted private clouds also charge on a per-user basis but often include more features in service packages.

Storage Space: Storage space can be limited for in-house private clouds but these restrictions are largely lifted for third-party hosted options.

Functionality: Private clouds are very customizable, allowing companies to take an individualized approach to resources. This allows for unique functionality that is company-specific. Security is provided by the host, either in-house or third-party. There is great flexibility in the opportunities available.

There is a third option, albeit a far less common one: hybrid cloud storage. Hybrid clouds combine the features of both private clouds and public clouds, utilizing two united cloud platforms to accommodate unique and specific hosting needs. Hybrid clouds are by far the most challenging to establish due to the consistency and compatibility issues required to combine each cloud and streamline workflows between them. Most companies do not have a need for hybrid clouds.

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Is a Public Cloud Cheaper Than a Private Cloud?

For companies with budgetary requirements in mind, the most affordable solution is often seen as the best. And, to many companies, this means public cloud access by default. Public cloud infrastructure is easy to implement and cheap to start with, especially for those with only a handful of employees. However, ease of use does not necessarily mean that public clouds are always the most cost-effective option.

When most people think of private clouds, they picture private clouds that are established and managed by a company, much like how traditional servers are owned and operated. This is certainly one form of private cloud, and can be a popular choice for larger enterprises with unique storage needs and the resources to construct and manage a web-based infrastructure. This infrastructure option isn’t common for those who don’t need this kind of platform as there is virtually no difference between the costs and demands of owned private clouds and traditional servers. However, this isn’t the only form private clouds can take.

Arguably more popular is the hosted private cloud. These clouds are maintained by a third-party provider but are unique to one company. Cloud storage isn’t partitioned between users as is the case with standard public clouds; instead, each cloud is for the use of an individual customer. This arrangement provides the same benefits as a public cloud – no on-site resources needed to manage cloud storage – with the added security and flexibility of a private cloud.

In spite of the additional services that come with a private cloud, there actually isn’t a significant price gap between a private cloud environment and a public cloud. It may seem this way on the surface – and it’s true, the per user cost for a private cloud is higher on average – but just looking at costs does not provide a true apples-to-apples comparison. A hosted private cloud like Avatara’s CompleteCloud solution goes beyond simple storage. Users also receive hands-on security resources, around-the-clock access to IT resources, and utility coverage, providing an all-in-one solution that encompasses a lot of extraneous expenses.

When these factors are taken into account, the total cost of ownership of managed private clouds can actually be cheaper than public alternatives.

Additional Benefits of Virtual Private Clouds

Private cloud solutions, particularly managed private clouds that are hosted and maintained by a third party, can be a cost-effective solution for large and small businesses alike. However, cost savings is not where the benefits end. When weighing the pros and cons of private virtual machines versus public alternatives, take your analysis a step beyond cost and keep these additional advantages in mind.

  • Better Security: Security is a major priority for those store data online, and for good reason. As companies like Equifax and Target have proved, even the biggest names nationwide aren’t immune from security breaches. Monitoring for a private cloud is generally far superior to public alternatives as it’s easier to identify small signs of weakness and act immediately. Further, there’s more flexibility in the security measures used with private clouds; when using public clouds, customers are reliant on whatever measures provider put into place and are virtually helpless should a breach or outage occur. This is especially important for businesses bound by specific rules and restrictions for safeguarding sensitive data, like HIPAA or financial services regulations.
  • Enhanced Flexibility: When cloud solutions aren’t serving millions of customers, there’s a lot more room for flexibility. Companies can better customize cloud computing environments to their unique needs rather than resorting to high-level choices made to best satisfy as many customers as possible, like how public clouds operate.
  • Fewer Restrictions: As a public cloud customer, there’s no real way to change things should services or functionality fail to meet requirements. If a cloud provider changes features available, discontinues functionality, or chooses to adjust any other facet of operations, there’s nothing customers can do about it, potentially interrupting the course of business and putting users between a rock and a hard place.
  • Easy Scalability: Similar to a public cloud, a hosted private cloud like CompleteCloud is highly scalable, accommodating anywhere from 15 to 15,000 users. With competitive per-user rates, companies can add and subtract users based on changing needs, regardless of how workloads shift.

From price to security, there’s a lot to love about private clouds. Regardless of the size of your company, the industry, or future plans, a hosted private cloud can be an excellent option.

Who Needs a Private Cloud?

In short? Almost everyone.

While cloud computing choices are often made based on unique corporate objectives, a third-party hosted private cloud ticks all of the boxes for most companies across a majority of industries. Making it easy to streamline workloads and accommodate fluctuating business needs, utilizing a secure and easy-to-use cloud computing data center can offer significant advantages over a public cloud. Onboarding and implementation can take more steps, but once everything is established, private clouds provide freedom and protection that public clouds can’t rival.

If you are considering employing cloud platform for your business, Avatara’s CompleteCloud solution provides everything necessary to seamlessly transition to the cloud. Covering responsibilities like IT support, utilities, disaster recovery, and security, you can enjoy the cost-saving benefits of public clouds while still reaping the benefits of a private environment. Contact us today to learn more.

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