When choosing between public and private cloud deployments, the cost will inevitably play a huge role in a business owner’s decision. Usually, the first solution many small businesses use is the public cloud.

Initially, the public cloud environment is an excellent way to cut IT spending because it offers on-demand computing services for small-to-medium-sized businesses that need the flexibility to scale their IT operations up or down at a moment’s notice. Public cloud services providers (CSPs) are also responsible for managing and maintaining data centres, which is a great feature for companies that lack the resources to run their infrastructure.

Despite the upfront cost-savings of public clouds, enterprise-level companies are finding economic opportunities in the private cloud. For instance, Dropbox replaced its Amazon cloud service with a personal, in-house cloud. In an interview with Wired magazine, former Dropbox COO Dennis Woodside said the move to private adds “substantial economic value,” especially since it grants the company more control over its data centre and optimises server performance.

But even if you’re not a big-name company, evidence suggests that private cloud solutions may make more financial sense.

When is it cheaper?

According to a cloud study, private cloud options are generally more cost-effective once they reach a certain scale. The report found Amazon’s public cloud offerings were cheaper in smaller operations. But as computing demands increased, self-hosted solutions became a better option. After deploying just 17 virtual machines, AWS costs were $7,466 (USD) per month, while private cloud solutions were only $7,219 per month.

Furthermore, studies have shown that the large upfront cost of setting up your private cloud eventually evens out with long-term use. Although experiences may vary for different-sized businesses, private clouds pay off after a little over 13 months, as companies better utilise their server resources and contract costs start to level off. In several cases, long-term investment in private clouds usually produces greater returns than in public clouds.

1. Steady billing models

Public clouds employ a pay-as-you-go subscription model designed primarily for volatile workloads. Startups, for example, have unpredictable computing demands; in one month, they might experience a massive influx of new cloud users; in another, they might scale down to avoid going over budget.

Meanwhile, privately hosted clouds are usually less expensive if your company has steady server demands and predictable workloads. In other words, if you’re sure about how many virtual machines you’ll need and how many people you’ll have on staff over a long period, then there’s little point in paying for computing resources on a pay-as-you-go basis.

2. More control

Because private cloud services are designed to a single organisation, the hardware, data, and network can be designed to assure high-performance levels. For example, you can upgrade your server’s processing power, increase network speed and throughput, change server operating systems, and choose the amount of data storage available to each user.

Public cloud services, however, are standardised, meaning you’re at the mercy of hosting your company’s hardware. If their servers don’t have solid-state drives (SSDs), for instance, then the quality of your service could be limited to the slower speed of their hard disk drives. Any storage, computing power, or availability upgrades in the future will incur extra costs, which could be more expensive than private cloud upgrades.

3. Better security

An attractive private cloud deployment factors in the benefits of comprehensive security. With self-managed data centres, you will know exactly where data is located and who has physical access to your servers. More importantly, your data centre is protected by your company’s firewalls and security systems.

This level of security is not as easy to achieve in a public cloud environment. Firstly, you don’t have as much control over your security, and you primarily depend on your cloud provider. Secondly, public cloud servers are shared with other companies (or tenants) whose security practices may jeopardise yours.

Considering that data breaches can cost upwards of $142 per stolen record, plus additional penalty fees for noncompliance, you save your company a lot of money by investing in more secure private cloud environments.

4. Private cloud “as-a-service.”

One of the biggest arguments against the private cloud is the need to hire expert technicians to manage your servers. Fortunately, those reluctant to make the huge leap to a self-hosted private cloud; can still opt for the managed private cloud option. This deployment model provides the same hands-off approach as a public cloud solution, including all the benefits of a private cloud (i.e., greater security and control).

This means your on-premises IT staff can focus on creating systems that will grow your business. At the same time, a private cloud services provider handles your data centre’s deployment, workload optimisation, and day-to-day maintenance.

Consider your options carefully.

The best cloud solution depends on your company’s needs. Companies with unpredictable computing requirements and the need to offload non-critical data; can benefit from public clouds. However, if your organisation values security, control, and long-term cost savings, you’ll be better off in a private cloud environment.

Private clouds can offer a host of benefits to your business. Empower IT Solutions has the expertise to design, install and manage your public, private or hybrid cloud solution. Contact us to find your perfect fit.

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