It’s No Secret: Hosted Private Clouds on the Rise

Arthur Cole
Slide Show

Eight Private Cloud Myths Debunked

For many an enterprise, the private cloud offers the best compromise between infrastructure flexibility and the need to maintain adequate control over critical data.

To that end, many organizations have been aggressively upgrading both physical and virtual environments in an effort to enable more cloud-like architectures service provisioning. Ultimately, this is expected to result in hybrid infrastructure in which public resources are used for bulk storage and large batch processing while mission-critical data and applications are kept closer at home.

Lately, however, the notion of hosted private clouds has gained credibility, particularly among larger organizations. If the data center itself can be co-located on third-party infrastructure, why not the cloud? All you would need is a few dedicated resources carved out of the cloud provider’s public realm, plus the same security regime that currently protects owned-and-operated environments, and voila: broad scalability and the same level of protection already in place at home.

For those who still think this does not provide adequate security, consider that none other than the CIA is said to be seriously considering a hosted private cloud solution. The company is rumored (remember, the CIA rarely confirms or denies anything it is up to) to be in talks with Amazon to provide a dedicated cloud service to accommodate unspecified data requirements. The $600 million deal is significant in two ways: First, it marks a key shift in data infrastructure for a top national security agency, and second, it represents a dramatic move on the part of Amazon into the private cloud market. The company already owns the public cloud space, which accommodates enterprise users largely on an informal basis through contracts with individuals or, at best, business units. A private solution would build stronger ties to top enterprise IT decision-makers, and would presumably provide a much steadier revenue stream.

If the deal goes through, it could be a harbinger for a very active hosted private cloud market in the coming decade. IDC, for one, predicts HPC revenue will top $24 billion by 2016, which puts the pace of market expansion at about 50 percent per year over the next three years. The two leading HPC architectures are the Dedicated Private Cloud, which provides physical compute and storage resources, and the Virtual Private Cloud that enables shared virtualized resources that can be harnessed through various control and security measures.

Indeed, Amazon is looking to build its HPC infrastructure at a rapid pace. The company recently teamed up with NetApp and Equinix in a deal that allows both firms to leverage AWS resources for their joint private cloud offerings. Under the agreement, Equinix’ International Business Exchange data centers that are outfitted with AWS Direct Connect will also feature NetApp’s Private Storage for AWS platform. The goal is to provide on-demand storage resources while maintaining full enterprise control of critical data. At the same time, it looks to alleviate one of the main stumbling blocks to hybrid cloud deployment: broad integration between internal and external resources.

This kind of activity on the part of Amazon is already starting to rile traditional enterprise platform providers who had hoped that the private cloud would provide a wedge into the broader cloud marketplace. VMware, for one, recently launched its own cloud service based on the vCloud architecture, which also has the potential to integrate smoothly with internal VMware environments that exist at many enterprises. The company is apparently working through the channel to convince customers not to port infrastructure over to Amazon just yet.


Of course, there’s nothing like a little healthy competition to keep leading vendors honest, and the hosted private cloud market seems to be shaping up as a vibrant playing field with a wide variety of services, platforms and capabilities. This is all good for the enterprise as it provides a strong incentive for HPC providers to be very accommodating in their service contracts.

At a time when the public cloud is providing consumers what they want, when they want it, there’s no reason the same consideration should not be extended to the enterprise as well.

P.S.: As an update to last week’s post regarding VMware and the open cloud movement, it seems that PayPal is not looking to tear out VMware infrastructure in favor of OpenStack en masse. A PayPal exec was quoted on VMware’s website that it is not pursuing a “rip and replace” strategy, but is merely pursuing “robust virtualization technologies” of all kinds, including VMware. As of this posting, however, PayPal’s own website has been silent on the matter.



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