6 Characteristics of a Private Cloud

What takes an environment beyond the realm of simply “virtualized” and into the realm of private cloud are a series of characteristics that are modeled on the successes that cloud providers that realized in the public cloud. These characteristics come both in the form of the business model (the way the data center business unit operates) and in terms of technical infrastructure features. Now, let’s learn the 6 characteristics of a private cloud and learn about some of the ways that an organization could potentially upgrade a virtualized data center into a private cloud.

1. Economies of Scale

Although some would say it’s technically possible to operate a private cloud on a small scale, the same doesn’t always hold true from a business perspective. Part of what makes the consumption of public cloud resources so attractive is that public cloud operators like Amazon Web Services and Microsoft are able to purchase infrastructure in massive quantities due to the scope of their operation. These huge orders allow them to negotiate great bulk pricing from their suppliers and the savings are passed on to the public cloud consumers.
While not all business that operate their own data center are able to take advantage of this principle, all data center operators can seek to find ways to structure their purchases in a way so as to reduce costs. Some large private data center operations, in fact, do have the scale to support a more cloud-like purchasing model.
In either case, running a true private cloud means structuring costs in a way that takes advantage of every bit of scale the business is working with. As an example, if multiple business units within an organization currently foot their own data center bills and do their own data center purchasing, moving data center purchasing to an organization level instead of a business unit level could allow some organizations to experience the economies of scale that public cloud operators enjoy.

2. OpEx-based Economics

The hallmark of a public cloud model is usage-based billing. Rather than a large, up-front financial outlay which is then amortized over many years, public cloud consumers pay a frequent fee (usually monthly) for only the resources they consumed during that billing period. This means that rather than purchasing hardware today to support the needs of the business for the next five years (the estimation of which can be quite tricky), a business needs only to foot the bill for the infrastructure their current application and data needs consume.
In the private cloud world, there are two major ways to take advantage of this concept. The first way is to leverage a third party that leases data center hardware. In this model, rather than purchasing three to five years’ worth of infrastructure in one swing as a capital expense, data center operators can lease equipment as they need it and pay the recurring leasing invoice out of the monthly operations budget instead. The second way to take advantage of this principle is to be sure that the data center scales quickly, easily, and in small chunks.

3. Easy and Granular Scale

By scaling a little bit at a time, a business is able to purchase only data center infrastructure that is needed today and buy the rest later. Historically, when scaling was cumbersome and expensive, it made more sense to buy for five years out in order to avoid the upgrade process. With the ability to scale granularly and without all the headache of data centers past, buying for the immediate future instead of the distant future can potentially turn what used to be a multi-year capital expense into a quarterly OpEx expense. From a budgeting standpoint, this is often much easier to manage and preferable to businesses today. While the success of this model was proven in the public cloud, private infrastructure exists today to allow private data center owners to bring this model home with them.

4. Operational Efficiency

If a public cloud provider operated with all the operational efficiency of most private, enterprise data centers from five years ago, most of those public cloud providers would be out of business or in a downward spiral. Critical to the success of the public cloud model is the insistence on operational efficiency. This comes by way of ruthlessly removing cruft and unnecessary clutter. Even more than that, it happens when data center architects focus on removing the human element from data center operations as much as possible. We’ve known for a long time now that computers are much faster and more accurate than humans. Now that technology has matured to the point where we can outsource many of the data center operations tasks to the data center itself, it makes more sense to remove the humans. Increased levels of automation and orchestration in the data center decreases the likelihood of human error, increased the speed of provisioning, remediation, and upgrades, and allows data center operators to focus on the creative tasks that humans are really more suited to. Public cloud providers have been leveraging automation from the very inception of the model; there’s no reason it can’t be leveraged in a private data center too, to turn that data center into a private cloud.

5. User Self-Service

One of the reasons that IT departments over the last decade have spent so much time dealing with the phenomenon of “shadow IT” – where users turn to external providers for their IT services instead of the internal IT organization – is because of the self-service nature of the public cloud. Consider this example: within the first couple years of the existence of Dropbox, a user’s needs to store and share data with his or her colleagues could play out in one of two ways:

1. Request a new file share from corporate IT. Wait a week for a call back to clarify what they wanted. Wait another week for provisioning to happen and the ticket to be closed. Call back and re-open the ticket because the quote on the file share was too small. Finally share files with their colleagues. Time to value: 2.5 weeks.
2. Create a new Dropbox account. Share the files. Time to value: 2.5 minutes.
   We’re becoming increasingly impatient as a society, and IT infrastructure is no exception to this trend. Therefore, to operate a private cloud, it’s mandatory that some level of self-service capability exists.

This could be end-user-facing as in the Dropbox example, but at the very least, it should be administrator-facing. For example, a database administrator might be able to request a new database server instance from the self-service portal. Behind the scenes, and new virtual machine is created (on appropriate storage resources), networking information is obtained and applied, the database engine is installed and configured, the operating system and database application are patched, and security settings are applied. At the end of the process, the requesting DBA is sent access information, and no data center operator has lifted a finger. This vision for self-service has been perfected in the public cloud, and it’s essential to running a proper private cloud.

6. Chargeback/Showback

Finally, billing in the public cloud world is simple. If a number of departments manage their own IT budgets, they can just have their own accounts with the public cloud providers and pay their own bill. Once of the challenges to overcome with turning a traditional data center into a private cloud is the need to replicate some of the multi-tenancy features of a public cloud. Even if separate billing from the IT business unit isn’t actually being done back out to the separate business units (“chargeback”), most organizations today at least want the ability to break down IT spending by department (this is known as “showback”). The key to bringing this public cloud characteristic in-house is to implement some sort of higher-level data center management tool that treats different parts of the organization as different entities. In the sense that different organizational units become “tenants” in this multi-tenant environment, a private cloud really becomes a miniature, self-contained scale model of a public cloud.