Yesterday I was critical of a report that Dr. Owen Rogers, noted cloud economist (yes, there is such a thing) and respected analyst at 451 Research came out with. A synopsis of my views is that Rogers made some findings about the relative costs of public versus private cloud that I thought were somewhat flawed. Or, if not flawed, at least misguided.

Later on in his report, however, Rogers took a deep look into models for private cloud provision and there’s some interesting stuff in there that is worth looking at. Obviously, it plays into the hands of 451’s client, Canonical (because: marketing) but that doesn’t mean that the findings are invalid. And so it is worth taking a look at the highlight assessments that 451 came up with.

“Private cloud can be cheaper, but tools and partnerships are needed”

451 Research’s Cloud Price Index previously found that many enterprises could achieve cost savings when using private cloud compared with public cloud, but only when operating in what they call a ‘Goldilocks zone’ of high utilization and high labor efficiency. The firm’s recommendation (and this is where Canonical is interested, obviously) is to use tools, outsourced services, and partnerships to optimize private cloud as much as possible to save money, while still benefiting from the more value-adding benefits of private cloud. In other words, if you’re going to go private cloud, don’t try and build it yourself but rather leverage specialist service providers (Canonical is an example, of course, but Red Hat and Mirantis would certainly want to be included in the category) to alleviate some of the negative impacts of private – things like efficiency drains and labor requirements.

“Managed private clouds can provide cost and value benefits”

I can’t argue with their empirical findings, so I won’t, but suffice it to say I’m interested that the 451 Cloud Price Index revealed that many managed private clouds were priced reasonably compared with public cloud. Even with the margin that the big public cloud vendors need to make – their incredible economies of scale should allow them to blow private cloud out of the water in terms of price. No matter, 451 went on to suggest that private cloud offers the best of both worlds – private cloud peace of mind, control and security, yet at a friendlier price. 451 suggests that these price benefits can come from higher labor efficiency driven through access to qualified, experienced engineers, and reduced operational burdens with the outsourcing and automation of day-to-day operations.

Articulating a more moderate tone

Owen is from Wales that means that, by definition, he’s softly spoken and somewhat moderate (well, unless you’re talking about Rugby in which case the Welsh get passionate when discussing their team’s results). We’d expect a moderate conclusion to his findings. And so it is when the report takes a more conciliatory tone and says:

Realistically, no single cloud model will be ideal for every scenario, and enterprises will need a range of ‘best execution venues’ for their numerous workloads, spanning managed, on-premises, public and private clouds. Depending on factors such as cost, performance, security, compliance and other variables, enterprises will need to determine which platform is best for each specific workload.

Indeed. Not one size fits all and, as the old saying goes, it’s a case of different strokes for different folks. Don’t make decisions for purely cost reasons because there are a whole bunch of other variables which you’ll be ignoring if you do so.

The future of private clouds

Based on his experience talking to real-world customers, Rogers concludes that private cloud is still demanded by the market, and is likely to be in demand for the foreseeable future. I agree with this perspective, for every “100% dyed in the wool” public cloud poster child like Netflix, there are 100 organizations that, for whatever reason, won’t go all-in with the public cloud. For these people, choice is a good thing.

I do have a little quibble, however, with Rogers next sentence which, in my humble view, gets close to the FUD we heard from the anti-cloud vendors in the past. He says that:

Enterprise buyers will utilize public cloud for some workloads, but will also want to know that other workloads are kept safe and secure, fully within the organization’s control.

I don’t like to hear any suggestion that even skirts around the idea that private cloud is more safe and secure. That’s a fallacy that really is thinking from a decade ago. Safety and security are a function of a host of different variables, the location of the data centers in question are very low on the list of importance when it comes to those variables and it’s far better to highlight the human and cultural aspects which have an impact on safety and security.


If all that this report had said was that a fully managed private cloud offering is generally cheaper, easier and quicker than a “roll your own” approach, I would have been happy. But I’m not hugely keen on conflating relative costs of different private cloud approaches to some kind of assessment of relativity between public and private clouds. In my view that’s not an approach that is particularly valid and, in any case, it isn’t an approach that helps build maturity and understanding around these issues.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • Who would have bet five years ago that Trump would be in the White House, Britain would vote to leave the EU, Russia would invade Ukraine, and the US and Canada would embark on a trade war? In my lifetime, the world have never been so unpredictable and so uncertain. The fact of the matter is if you keep your data on your own property, it is bound to be more resilient to changing legal and economic circumstances outside of your control. There are huge downsides to doing this of course – you have to do everything yourself, you need expertise, you lose out on new cutting edge public cloud services. But, for some workloads, CIOs might decide that these may be worth sacrificing in return for having less to worry when it comes to changing data protection legislation, international treaties, tax laws, diplomatic relationships and the like.

    As an analogy, Britain is making the – in my opinion – economically suicidal move to leave the EU. Would I place all my savings in a bank outside of the UK right now? Of course not! I’d rather keep it in UK borders (preferably in a UK bank) for the time being, until the situation has calmed down.

    This is certainly not a criticism of the public cloud providers, who have done a fantastic job of layering security and compliance into their offerings. The FUD isn’t a reflection of public clouds being unsuitable; it’s a reflection of uncertain times.

    • wcurtispreston |

      I don’t see how utilizing a public or private cloud provider makes you more or less susceptible to such changes. It’s just as possible that a company might locate their private cloud setup in a different country and have similar problems. In fact, you could argue they might have more problems. Suppose they chose a managed private cloud provider in a different country — one that didn’t operate in their home country. Good luck getting any help migrating off that platform. But if you chose a public cloud provider, and happened to choose a different country for cost reasons, you can easily get support to migrate that to that same public cloud provider in your home country.

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