Private Cloud Computing: Pros and Cons

December 15, 2023

Private Cloud Computing Pros and Cons

The Australian landscape is buzzing with digital transformation, and the numbers speak for themselves. According to the 2022 Australian Bureau of Statistics (ABS) report, 85% of businesses reported using Information and Communication Technologies (ICTs). But amidst this tech wave, one solution stands out: private cloud computing.

Cybersecurity software, cloud technology, and digital platforms are leading the charge, and for good reason. In today’s hyper-connected world, businesses need agility, scalability, and security—all of which private cloud computing offers in spades.

But like any powerful tool, the cloud comes with its own set of considerations.

This blog dives deep into the world of private cloud computing, exploring its advantages and potential drawbacks. We’ll equip you with the knowledge to make an informed decision: is the private cloud computing model the perfect fit for your business?

What is a Private Cloud?

A private cloud (also called internal cloud or corporate cloud) is a cloud computing environment built for a single customer. It offers the flexibility and affordability of a public cloud but with the added security and control of having your own dedicated IT infrastructure.

Some companies choose private clouds for their strict compliance needs or sensitive workloads like finance, medical records, or personally identifiable information (PII). Unlike shared public clouds, private clouds offer a secure, customized environment for data, like a locked vault within the cloud.

There are four main types of private clouds, each offering unique functions depending on who manages the environment and where it is hosted. Below are the types of private clouds:

On-premises private cloud

A private cloud hosted on-premises refers to being internally stationed within your data center and supervised by your IT team. This setup grants extensive authority over data privacy, security, and customization. However, its capabilities are constrained by the capacity of the existing infrastructure.

Virtual private cloud

A virtual private cloud (VPC) provides exclusive resources within a shared public cloud setting, creating a secluded environment. Through a VPC service, you can design and manage a personalized virtual network that functions akin to a private cloud setup. This enables you to operate tasks independently from other entities while utilizing the shared IT infrastructure of a public cloud provider.

StarTechUP Cloud Consulting Services

Hosted private cloud

Managed on external servers by third-party vendors, hosted private clouds, also known as private cloud hosting, differ from VPCs in that they are exclusively utilized by a single organization, avoiding shared usage with other clients. These services offer increased resources, scalable options to meet high demands, an intuitive user interface, and dedicated support. Additionally, the service provider assumes responsibility for the ownership, management, maintenance, upgrades, and security of the cloud infrastructure.

Managed private cloud

Managed private clouds are commonly situated within a hosted exclusive cloud setting or can be situated on-site within your organization, ensuring non-shared infrastructure. In fully administered private clouds, an external service provider is tasked with the deployment, setup, administration, and upkeep of the private cloud, encompassing software, networking, and operational aspects. These providers might also extend additional services like identity management, storage, or backup and disaster recovery options.

Pros of Private Cloud

Private cloud offers a range of benefits for businesses, making it a compelling choice for many organizations. Here are some key pros to consider:

Autonomy and customization of hardware and software

Organizations have the liberty to select their preferred hardware and software, unlike being limited to the offerings of the cloud provider. This freedom extends to the customization of servers and software, enabling tailored configurations through add-ons or bespoke development.

With private cloud setups hosted on-premises or in third-party data centers, they afford heightened visibility and control over both data and infrastructure, allowing for provisioned and customized setups aligned precisely with individual technological and business requisites.

Greater security and enforced compliance

Security and compliance are inherent in private cloud setups due to the containment of all workloads behind customers’ own firewalls. Within private clouds, the IT department maintains comprehensive control over hardware configurations, security services, remote access permissions, storage, and other crucial elements.

Private cloud environments create isolated, dedicated environments granting exclusive organizational access via secure networks, avoiding public internet exposure. This autonomy shields sensitive data, ensuring compliance and fortifying against unauthorized access, distinct from relying solely on public cloud resources and provider compliance.

Support legacy applications

Private cloud environments support legacy applications by offering customization tailored to individual needs, easing the transition of workloads to the cloud. They are a viable alternative for legacy applications that may not seamlessly migrate to a public cloud, providing customization options that might require extensive rework.

Specifically, many private cloud solutions, often VMware-based, facilitate a smoother transition for these legacy workloads. To avoid major rework, an IT department handling numerous or complex legacy applications may initially create an interface between the legacy system and cloud-based enterprise applications. Subsequently, they can gradually migrate parts of the legacy application to the private cloud over time.

Cons of Private Cloud

While the advantages of private cloud are appealing, there are multiple limitations that should not be left out. Here are the drawbacks for private cloud users:

Inflexible architecture

Private clouds often face limitations in adapting to diverse application needs, spanning from traditional enterprise to cloud-native applications. The rigidity of infrastructure software and reliance on 3-tier architectures can hinder seamless adaptation, impacting operational flexibility.

Complex data services

Meeting enterprise data needs in private clouds, such as block and file storage, alongside typical object storage, necessitates deploying and managing distinct hardware for each service. This complexity adds costs, reduces overall capacity utilization, and restricts flexibility, hindering efficient data utilization crucial for digital transformation.

Vendor lock-in and integration challenges

Legacy infrastructure-based private clouds present vendor exclusivity issues, tying businesses to a specific virtualization provider. This restriction limits flexibility and choice, compromising adaptability and the ability to integrate newer technologies seamlessly.

Additionally, connecting to the public cloud often demands an additional software layer, complicating integration and adding complexity, especially for larger enterprises with diverse IT teams. This complex environment leads to challenges in automation, making it time-consuming, prone to failure, and demanding during troubleshooting and maintenance.

Amazon VPC quote

Top Private Cloud Services Providers

The private cloud market provides organizations with multiple options with several reputable service providers offering tailored solutions.

Here are some top private cloud service providers renowned for their offerings:

Amazon Web Services (AWS)

Amazon Web Services (AWS), renowned for its public cloud, also provides a robust private cloud solution: Amazon Virtual Private Cloud (VPC). It allows organizations to create a private AWS, combining the benefits of a private cloud’s resources and privacy with AWS’ scalable platform.

Amazon VPC offers the security and scalability of AWS, making it a highly trusted cloud solution globally. However, it confines businesses to a virtual private cloud within the AWS ecosystem. For other virtual private cloud services and configurations, organizations need to explore alternative options.

Google Cloud Platform (GCP)

Google Cloud, similar to AWS, solely provides virtual services for private cloud computing. Despite this, GCP’s network environment stands out for its high level of customization and access to Google’s extensive service suite.

Tailored for small-to-midsize or large companies, GCP’s private cloud offering offers a customizable environment and access to analytics, Machine Learning, and Artificial Intelligence tools. This makes it an ideal choice for businesses seeking highly flexible solutions with access to cutting-edge technologies.

Microsoft Azure

Microsoft Azure provides Azure Private Link, enabling users to connect their private cloud resources securely to Azure services. Azure Stack Hub facilitates consistent hybrid cloud deployments, allowing organizations to build and run hybrid applications consistently across cloud and on-premises environments.

Azure Stack Hub, another feature, supports seamless hybrid cloud deployments. This empowers organizations to develop and operate applications consistently across both cloud and on-premises environments. By leveraging Azure Stack Hub, businesses benefit from increased flexibility, scalability, and streamlined operations, enabling them to innovate efficiently across diverse infrastructures.

IBM Cloud

IBM exclusively focuses on private cloud solutions, standing out as a top provider in this arena, unlike many companies that also offer public cloud services. With a robust portfolio comprising over 170 services, IBM even provides a free tier, making its cloud services accessible for businesses.

IBM’s cloud offerings boast user-friendly accessibility, and notably, they are among the rare cloud providers facilitating the execution of quantum code for businesses. Moreover, for those seeking cutting-edge AI and Machine Learning tools, IBM emerges as a top choice due to its high-performing capabilities in this domain. If you prioritize these technologies, IBM’s managed cloud services and solutions stand as an exceptional option.


SAP, renowned for its ERP solutions, provides a robust private cloud service, merging its dominant business software capabilities with cloud computing. However, the SAP private cloud is limited to compatibility solely with SAP and partner solutions, making it less suitable for businesses utilizing diverse tools.

Yet, for those exclusively utilizing SAP and its partner products, the SAP private cloud offers access to the SAP Business Technology Platform. This inclusion can be advantageous, providing additional functionalities and resources for businesses deeply entrenched in the SAP ecosystem.

Get Cloud Computing Consultation from StarTechUP!

Switching to a private cloud environment can significantly transform your organization’s infrastructure, offering enhanced security, customization, and control over your data and applications. But when is the right time to do it?

Our cloud computing services can give you a thorough consultation about the ideal timing for getting private cloud services. Determining the right moment to make this shift involves various factors, including the scalability needs of your business, data security requirements, and the potential cost-efficiency of a private cloud setup.

At StarTechUP, our team of cloud computing experts specializes in facilitating seamless private cloud deployment. We also offer comprehensive training programs to empower your team with the necessary skills to manage and optimize your private cloud environment effectively.

Contact us today to learn more about our consultation services!

About the author: Andrea Jacinto - Content Writer

A content writer with a strong SEO background, Andrea has been working with digital marketers from different fields to create optimized articles which are informative, digestible, and fun to read. Now, she's writing for StarTechUP to deliver the latest developments in tech to readers around the world. View on Linkedin