The Reality of 'Private Cloud'

Mary-Jo Foley posted a provocative article yesterday about the reality of 'Private Cloud' offerings and who is driving the demand; customers or vendors?

As I was one of the people responsible for designing Microsoft’s Public Sector 'Cloud' strategy I have some opinions about this issue which I wanted to share.

It’s fair to say that until we started looking at the worldwide customer requirements for 'Cloud' in the public sector the whole issue of 'Private Clouds' was not a major part of the company’s overall 'Cloud' strategy. However, once you start looking at the requirements of public sector organizations outside the US you very quickly realize that standard 'Public Cloud' offerings will not cut it.

The majority of foreign governments have data sovereignty regulations which prohibit the storage and transport of data beyond the country’s borders. Many governments also have very serious concerns about the reach and implications of the US Patriot Act which requires any US based 'Cloud' provider to disclose any data held within their systems to the US Government, upon request, no matter where that data is stored. Obviously these requirements do not affect the provision of 'Cloud' services to the US government. However, providers will still need to ensure that US government data is not 'Smeared' across the provider’s global 'Cloud' infrastructure and is instead kept within data centers hosted in the US.

On face value these requirements might be seen as a complete barrier to the adoption of 'Cloud' by foreign governments. However, these challenges are balanced by a huge pressure to improve the efficiency of IT provision across the Public Sector. The extreme budgetary pressure being faced by many governments is forcing a re-evaluations of how IT services are delivered and at what costs. In this light the costs advantages of 'Cloud'; scale, elastic and automated provisioning, pay-as-you-go, reduction in capital expenditure and consolidation of operations etc. are all highly attractive.

The only way to 'Square the Circle' is to offer a 'Private Cloud' solution i.e. a set of technologies which will let governments implement IT infrastructure which has 'Cloud' attributes but which can be kept separate from the 'Public Cloud' infrastructure and compliant with the country’s required policy, regulatory and security regimes.

The UK is a good example. The UK government is expecting all the advantages of 'Cloud' without the exposure of putting UK government data into the 'Public Cloud' infrastructure with all the exposure that implies. At the end of the day 'Cloud' is a particular approach to systems and workload 'Management' that delivers the benefits I’ve outlined above. Whether these benefits are delivered within a private datacenter or across a public infrastructure is really immaterial.

From a competitive perspective its also important to understand why players like Amazon and Google want to play down the relevance of 'Private Cloud'. The public sector is a very large and important IT market. In many countries the government is the single largest spender on IT. Vendors who only offer 'Public Cloud' services are failing to meet the most basic needs of public sector customers outside the US. If you want to play in the public sector market around the world you will need both a 'Public' and 'Private Cloud' strategy.

It was interesting to see that having driven this set of requirements out of the public sector side of the business the concept of 'Private Cloud' started to find significant traction in the enterprise segment. There are plenty of large private sector companies who are not yet ready to move their sensitive data into the 'Public Cloud' and yet want the benefits of 'Cloud' workload management to drive efficiency in their IT service provision. In my view most large enterprise organizations will end up using a blend of both 'Public' and 'Private' cloud.

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