Private clouds vs Virtual Private Clouds (VPC)

To understand why Virtual Private Clouds (VPC) have become very useful for companies, it’s important to see how cloud computing has evolved. When the modern cloud computing industry began, the benefits with cloud computing were immediately clear; everyone loved its on-demand nature, the optimization of resource utilization, auto-scaling, and so forth. As more companies adopted cloud, a number of organizations asked themselves, “how do we adopt the cloud while keeping all these applications behind our firewall?” Therefore, a number of vendors built private clouds to satisfy those needs.

In order to run a private cloud as though it were on-premises and get similar benefits to having a public cloud, you need a multi-tenant architecture. It helps to be a big company with many departments and divisions that all use the private cloud’s resources. Private clouds work when there are enough tenants and resource requirements are ebb and flow so that a multi-tenant architecture works to the advantage of the organization.

A private cloud is a large initial capital investment to set up but, in the long run, it can bring savings––especially for large companies. If the alternative is every division gets its own mainframe, and those machines are over-engineered to accommodate peak utilization, the company ends up with a lot of expensive idle cycles. Once a private cloud is in place, it can reduce the overall resources and costs required to run the IT of the whole company because the resources are available on-demand rather than static.

But not every company has the size and the number of tenants to justify a multi-tenant private cloud architecture. It sounds good in principle, but for companies at a particular scale, it just doesn’t work. The alternative was the best of both worlds; have VPC vendors handle the resources and the servers but keep the data and applications behind the company’s firewall. The solution was a Virtual Private Cloud; it is behind the firewall and is private to your organization, but housed on a remote cloud server. Users of VPCs get all the benefits of the cloud, but without the cost drawbacks.

Today, about a third of organizations rely on private clouds, and many companies embarking on the cloud journey want to know whether a private cloud is the right move for them; they also want to ensure that there are no security concerns. Without going too far into those debates, there are certainly advantages to moving to a private cloud. But there are disadvantages as well; again, it is capital and resource intensive to set up. However, running a private cloud can lead to significant resource savings, but some organizations do not have enough tenants to make hosting their own cloud worth it.

VPCs give you the best of both worlds in that you’re still running your applications behind your firewall, but the resources are still owned, operated, and maintained by a VPC vendor. You don’t need to acquire and run all the hardware and server space to set up a private cloud; a multi-tenant cloud provider will do all of that for you––but you will still have the security benefits of a private cloud.