There is one big reason why many customers opt to build their own private cloud infrastructure rather than buy public cloud services: control.
The desire for control all but guarantees that every midsized company or large enterprise will adopt a combination of public and private cloud-computing models, according to several managed service providers (MSPs) with experience handling hybrid cloud projects. That is why MSPs should bone up on the integration and management skills needed to offer private cloud services.
Private cloud services may take various forms. The provider may manage a private cloud in the customer's own data center, or the provider may host, isolate and manage several customers' private clouds in its own data centers.
"We are not focusing on the public cloud, even though it is a great development tool for many enterprises," said Terry Buchanan, chief technology officer at Zycom Technology, an MSP in Kingston, Ontario. "If I am going to deliver a virtual Infrastructure as a Service, I want to make sure it is always running optimally, and I can't always guarantee that with a public offering. … We are really seeing a higher appetite for private cloud infrastructure."
Opportunities abound for private cloud services
There are three major areas of concern driving customers away from public cloud services and into private cloud projects: compliance with data management policies, application incompatibilities and the desire to have a tight grasp on policy control.
"IT groups really like the attributes of private cloud because they can secure, control and manage it," said Ken Copas, IT service management and cloud practice lead for GlassHouse Technologies, a data-center infrastructure services company based in Framingham, Mass. "Public cloud is really being [adopted] by particular user groups, such as programmers looking for a development platform."
What are private cloud services?
The term private cloud typically refers to a cloud computing environment used exclusively by a single business customer. Whereas multi-tenancy in a public cloud refers to distinct customers, the "tenants" in a private cloud are the organization's various business units. A private cloud should still support features like rapid elasticity, usage-based chargeback and on-demand, self-service provisioning.
Although a private cloud is often on a customer's premises, many cloud providers have begun to host and manage customers' private clouds in their own data centers, as a service. This is often marketed as hosted private cloud or virtual private cloud, but it is important to note that neither term has a standard definition.
That reality has led many MSPs to concentrate on developing hosted private-cloud services in addition to the necessary integration skills to help companies combine applications hosted in private cloud environments with other portions of their infrastructure.
"We have built out our own [hosted private-cloud] facility," said Rory Sanchez, president and CEO of SLPowers, an MSP in West Palm Beach, Fla. "I can build something a lot more robust, protect it, secure it and make it more available."
For SLPowers, the rationale for going private on behalf of its customers is simple: It can manage the underlying infrastructure more closely than if the servers and storage were part of another provider's public cloud offering. While it is possible for MSPs to monitor public cloud infrastructure, it is not always possible for them to address problems without getting the public-cloud service provider to intervene, Sanchez said.
Another benefit for Sanchez is that SLPowers can secure the network that ties its hosted private clouds with customers' on-premises IT infrastructure.
Mike Alley, director of managed services solutions for Logicalis, a Farmington Hills, Mich.,-based integrator and MSP, said his organization steers businesses to its private cloud services for precisely the same reason as SLPowers does.
"This is a point of differentiation for our services. We don't try to compete with the Amazons of the public cloud world," Alley said. "We offer a fully monitored and managed cloud entity, which is what most of our clients want."
That also means that Logicalis must charge more than competing public-cloud providers like Amazon.
"They are getting something unmanaged at a different price point for a different reason," he said.
What skills do you need to offer private cloud services?
Although the decision to sell private cloud services is a no-brainer, supporting them is not a trivial matter. For starters, these services require MSPs to have extensive skills in data center virtualization and virtual infrastructure management.
Although the decision to sell private cloud services is a no-brainer, supporting them is not a trivial matter.
"You have to virtualize in order to enable cloud computing," said John Ross, chief technology officer for GreenPages Technology Solutions, an MSP in Kittery, Me.
GreenPages' strategy for tapping the private cloud services market is to become an integration partner, using CA's Private Cloud Accelerator for Vblock Platforms to sell managed private-cloud services. Vblock -- a rack of EMC storage, VMware software and Cisco Systems servers and network devices -- is normally sold as a so-called "cloud in a box," or preassembled private-cloud environment, by the Virtual Computing Environment (VCE) Company, a joint venture by Cisco, EMC, VMware and Intel.
The CA solution helps GreenPages deploy private-cloud integration services and capabilities for customers in days rather than months, Ross said. Customers' own virtualization projects have sparked many of these discussions about GreenPages' managed private-cloud services, as many of their own IT teams struggle to manage the effects virtualization has had on their operations, he said.
"Tools and utilities that we consume from CA allow us to visualize the impact for the customer," Ross said. "I can usually see this better than their internal team [can]. Because I can show them, I can get their attention."
Meanwhile, there is also high demand for assessment services that help businesses determine which applications are appropriate for hosting within private cloud infrastructure, said GlassHouse Technologies' Copas.
By moving applications into a private cloud, customers can maintain tighter control over data than available in a public cloud. The private model provides customers with a more detailed picture of what services are being consumed along with which departments are consuming them, Copas said.
Understand the relationship between public and private cloud
When helping customers decide between public and private cloud services, it is important for MSPs to understand and convey the benefits of both cloud models.
For example, public cloud services might be fine for a customer interested in adopting a new application. They might also appeal to a company interested in moving technology-related expenses out of the capital budget. Public cloud services may also suit an organization that needs extra capacity for a short period of time.
Private cloud infrastructure, on the other hand, offers a good way to reduce operational expenses for existing applications by introducing new provisioning methods and options for more detailed chargeback. The private approach also appeals to businesses worried about security, several MSPs said.
Helping customers figure out which type of cloud approach is appropriate for their unique business needs is a service more MSPs intend to provide in the future. And more often than not, MSPs advise their customers that they can benefit from both public and private cloud services.
"Private and public clouds are much more different than they are similar," Copas said. "Most companies are not going to be happy [using only] one or the other."
About the author: Heather Clancy is an award-winning business journalist in the New York area with more than 20 years of experience. In addition to writing for several TechTarget publications, her articles have appeared in Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She was previously editor at Computer Reseller News, a B2B trade publication covering news and trends about the high-tech channel.
This was first published in April 2012