Private Cloud vs Public Cloud: Similarities, Differences, and How to Choose

What Is a Public Cloud?

A public cloud is a computing model where third-party providers offer cloud-based services, such as storage, computing power, and networking, over the internet. These services are shared among multiple customers, also known as tenants, on a pay-as-you-go basis.

Public cloud providers, such as AWS, Microsoft Azure, and Google Cloud, manage and maintain the infrastructure, allowing organizations to scale resources quickly without owning physical hardware. This model is cost-effective and provides high availability, but it may raise concerns about data security and compliance for sensitive workloads.

What Is a Private Cloud?

A private cloud is a cloud computing environment dedicated to a single organization. Unlike public cloud services, private cloud resources are not shared with other tenants, offering greater control, security, and customization.

Private clouds can be hosted on-premises in a company’s data center or managed by a third-party provider. They are suitable for organizations with strict security, regulatory, or performance requirements. However, they often require higher costs and management overhead compared to public cloud solutions.

In this article:

• Key Similarities Between Public and Private Clouds
• Key Differences Between Public and Private Clouds
• Factors to Consider When Choosing a Cloud Deployment Model

Key Similarities Between Public and Private Clouds

While public and private clouds have distinct differences, they also share several core characteristics. Both models leverage cloud computing principles to provide scalable, flexible, and efficient IT infrastructure. Here are some key similarities that highlight their common functionalities:

• Virtualization and automation: Both public and private clouds rely on virtualization to maximize resource utilization and efficiency. They use hypervisors or containerization technologies to run multiple workloads on shared physical infrastructure. Automation tools and orchestration platforms, such as Kubernetes or OpenStack, help simplify deployment, scaling, and management in both models.
• On-demand resource allocation: Whether public or private, cloud environments provide dynamic resource allocation based on workload requirements. Organizations can scale computing power, storage, and networking resources as needed, ensuring optimal performance and cost efficiency.
• Self-service and management tools: Public and private clouds offer self-service portals and management dashboards for provisioning and monitoring resources. Cloud administrators can deploy virtual machines, configure networks, and enforce security policies through these interfaces.
• Security best practices: Both cloud models implement security best practices, including encryption, identity and access management (IAM), and network segmentation. While private clouds offer greater control, public cloud providers also follow stringent security protocols to protect customer data.
• Support for hybrid and multi-cloud architectures: Organizations can integrate both public and private clouds into hybrid or multi-cloud environments. This allows organizations to optimize workloads by leveraging the scalability of public clouds while maintaining sensitive data in private clouds for compliance and security reasons.

Related content: Read our guide to hybrid cloud

Key Differences Between Public and Private Clouds

Here’s a look at some of the main differences between these two cloud computing models.

Ownership and Accessibility

Public clouds are owned by cloud service providers and are accessible over the internet to anyone who subscribes. This model allows users to deploy workloads and scale resources with ease. With an infrastructure hosted externally, users have the flexibility to access services anywhere, benefiting from the infrastructure of established providers.

Private clouds grant an organization complete ownership and are not shared with other entities. This exclusivity allows for on-premises deployment or managed service through a third party, giving organizations control over data location and accessibility, critical for organizations handling sensitive information or operating under stringent compliance regulations.

Security and Compliance

Public clouds, while secure, are often perceived to have less stringent security than private options due to their multi-tenancy nature. Although public providers invest massively in security, the shared environment requires organizations to bolster their own security measures. Compliance in public clouds is mainly provider-dependent.

Private clouds offer customization for security and compliance. They cater directly to an organization’s requirements, allowing tailored security protocols and stringent access controls. This is vital for sectors like finance and healthcare where data sovereignty and security are a priority.

Learn more in our detailed guide to private cloud security (coming soon)

Cost Structure

Public cloud cost structures are based on a pay-as-you-go or subscription model, offering financial flexibility. This eliminates the need for significant upfront capital expenditures, allowing organizations to scale resources in accordance with demand, paying only for what they use.

Private clouds require substantial initial investment in infrastructure and ongoing maintenance costs, whether internally managed or through a provider. This can lead to higher overall expenses compared to a public cloud. However, the predictability of costs in private clouds can be advantageous for organizations needing fixed budgets.

Scalability

Both public and private clouds provide scalability, but their approaches differ. Public clouds offer virtually limitless scalability, allowing organizations to expand and contract resources swiftly due to extensive global provider infrastructures.

Private clouds also support scalability but might be limited by the owned or leased infrastructure. Expanding resources might require additional hardware investments, introducing longer scaling timelines compared to the almost instantaneous public cloud.

Performance and Reliability

Public clouds provide reliable performance with resources spread across global data centers, ensuring reliability and availability. Service level agreements (SLAs) typically guarantee uptime and performance, with major providers offering redundancies that minimize downtime. However, network latency can be an issue due to data center distances from the end-user.

Private clouds can offer higher performance levels through dedicated resources, minimizing contention. Reliability is controllable within an organization’s infrastructure or chosen provider’s level of service agreements. While the possibility of customized performance tuning is higher, this comes at a higher cost since resources are not shared with other clients, ensuring dedicated availability.

Customization and Control

The level of control and customization in private clouds surpasses that of public clouds. Organizations using private clouds determine hardware, network configurations, and software deployments, tailoring environments to meet requirements. This control is critical for regulatory compliance and adaptation.

Public clouds provide standard environments with limited customization, focusing on broad usability. While they offer a variety of services and pre-integrated solutions, organizations may find such configurations insufficient for niche requirements. New generation public cloud services, however, are increasingly offering more customizable options and managed services.

5 Expert Tips that can help you make the best choice between private and public cloud solutions

Jon Toor, CMO

With over 20 years of storage industry experience in a variety of companies including Xsigo Systems and OnStor, and with an MBA in Mechanical Engineering, Jon Toor is an expert and innovator in the ever growing storage space.

Evaluate hybrid cloud as a strategic middle ground: If the organization has both highly sensitive and scalable workloads, consider a hybrid cloud model. Keep critical applications in a private cloud while leveraging public cloud elasticity for less-sensitive workloads, disaster recovery, or burst capacity.

Conduct a total cost of ownership (TCO) analysis beyond initial expenses: Public cloud may seem cheaper initially, but costs can rise with long-term usage, data egress fees, and over-provisioning. Compare the long-term expenses of private cloud ownership, including hardware refresh cycles, staffing, and energy costs.

Leverage cloud interoperability to avoid vendor lock-in: Whether choosing private or public cloud, design workloads using open standards (e.g., Kubernetes, Terraform, OpenStack) to ensure flexibility in migrating between cloud environments without significant refactoring.

Use FinOps strategies for public cloud cost control: Public cloud bills can spiral if not managed effectively. Implement FinOps best practices, such as setting up budget alerts, using reserved instances, and optimizing storage costs with tiered data retention policies.

Assess compliance and legal requirements before migrating workloads: Some industries (healthcare, finance, government) require strict data residency and sovereignty. Ensure the cloud provider (public or private) meets regulatory requirements before committing to a deployment model.

Factors to Consider When Choosing a Cloud Deployment Model

Organizations should consider the following aspects when choosing their cloud approach.

1. Workload Requirements

Public clouds are suitable for variable workloads with the ease of scaling resources up or down, serving applications like web hosting or development testing. Private clouds suit consistent or sensitive workloads demanding high security and customization, typical in financial sectors or healthcare.

Organizations must evaluate workload nature, predictability, and sensitivity. Public clouds offer rapid elasticity, while private clouds provide the performance and compliance controls some workloads necessitate.

2. Regulatory Compliance

Regulatory compliance is a significant consideration when selecting a cloud model. Industries subjected to strict regulatory standards, such as healthcare or finance, often require the security and data sovereignty offered by private clouds. They ensure that sensitive data is stored, processed, and managed according to industry regulations, avoiding compliance breaches.

Public clouds, although generally secure, rely on shared infrastructures that may not meet compliance requirements. While major providers offer industry certifications and compliance tools, organizations need to evaluate provider capabilities concerning their regulatory mandates.

3. Technical Expertise and Resources

The availability of technical expertise and resources significantly influences cloud model choices. Public clouds require minimal technical input because providers manage infrastructure and maintenance. This setup benefits organizations with limited IT staff or those preferring to focus resources on core business activities rather than IT management.

Private clouds demand a higher degree of technical involvement to manage, maintain, and secure infrastructure, which assumes having a skilled in-house IT team. Organizations must assess their technical capabilities, assigning adequate resources and training to manage cloud environments.

4. Capital and Operational Expenditure

Public clouds operate on a pay-as-you-go model, eliminating large upfront infrastructure investments. This makes them attractive for startups and organizations with changing workloads, as they allow scaling resources dynamically while only paying for what is used. However, costs can accumulate over time, especially for sustained workloads or high data transfer needs.

Private clouds require significant capital expenditures for hardware, software, and maintenance. While the upfront investment is higher, private clouds offer predictable long-term costs, which may be preferable for organizations needing consistent resource usage. Additionally, organizations must factor in operational costs, including IT staff and security management.

5. Customization and Control

Public clouds provide standardized services designed for broad use cases, limiting the extent to which organizations can modify environments. While major providers offer configurable options, organizations requiring deep customization for performance tuning, security policies, or compliance mandates may find public clouds restrictive.

Private clouds offer complete control over infrastructure, allowing organizations to tailor network configurations, security protocols, and computing resources to their needs. This is particularly beneficial for industries requiring strict compliance adherence or unique workload optimizations. However, greater control also means increased complexity in management and maintenance.

Achieving True Cloud Storage On-Premises with Next-Gen Distributed Storage

Cloudian HyperStore can help alleviate the complexity and scalability issues of traditional storage equipment in a private cloud scenario.

HyperStore is a low-cost, cloud-scale storage solution you can deploy on-premises to gain all the capabilities of cloud storage services like Amazon S3. It provides a multi-tenant architecture that lets you set up a storage cluster and share it among multiple applications and business units. You can manage Quality of Service and set usage quotas, backups, and security policies separately for each tenant. HyperStore even offers built-in metering and billing capabilities.

Learn how to lower your storage total cost of ownership with our TCO report