Public vs. Private Options in the Cloud

The demand for cloud computing is perpetually increasing, which means that business and technology managers need to clear up any questions they have about the differences between public and private clouds—and quickly at that.

The St. Louis-based United Seating and Mobility is one company that faced the common dilemma of choosing between a public or private cloud. The company—which sells specialized wheelchairs at 30 locations in 12 states—initially used phones and email to stay up to date on vendor contracts and other matters before monitoring these developments with off-the-shelf applications on its own servers. Finally, United Seating and Mobility decided to move to the public cloud.

United Seating and Mobility’s director of operations Michael DeHart tells Baseline Magazine of the move, “The off-the-shelf applications didn’t collaborate. You’d log on to all of the apps and try to remember which one needed which password.” Staffers across the nation now share the information seamlessly via the enhanced tools available in the public cloud.

Another example illustrating the difference between the public and private cloud is the Cleveland Cavaliers. The NBA team uses a private cloud to run its arena’s website. Going private allowed for increased one-on-one interaction with the cloud provider partner while simultaneously giving the franchise more resources to handle increased traffic to the site. Traffic on the area site has been known to spike when, for example, the team makes the playoffs or a major artist is coming to the venue. “When you’ve booked Miley Cyrus you’d better be ready,” says the Cleveland Cavaliers director of web services Jeff Lillibridge.

Despite choosing different versions of the cloud, both United Seating and Mobility and the Cleveland Cavaliers have noticed that few enterprise managers will be able to avoid the topic of private verses public clouds. According to research firm IDC, worldwide cloud services revenue will reach $44.2 billion in 2013, compared to $17.4 billion last year.

Business and technology professionals remain stumped about what private and public clouds are despite the increased demand for worldwide cloud services. Examples of public clouds include Google AppEngine, IBM’s Blue Cloud, LotusLive Engage and Amazon’s Elastic Compute Cloud (EC2). A public cloud is a shared technology resource used on an as-needed basis and available via the Internet while a private cloud is created specifically for the use of one organization.

Enhanced by virtualization technologies, both concepts are making way for an “evergreen” approach to IT in which enterprises can obtain technologies when they need them without purchasing and maintaining a host of in-house services.

Bob Zukis, national leader of IT strategy for PricewaterhouseCoopers (PwC) says, “It all stems from the legacy model of ‘build it and forget about it.’ Changes taking place in the industry are making it much more efficient and effective to provision what IT needs. So ‘build it and forget about it’ no longer meets the needs of the business. Whether you’re going with a public or private cloud, you’re pursuing a way to increase your technological resources in a more efficient flexible way.”

In addition to being evergreen, this movement is also green-friendly. Says Frost and Sullivan’s Vanessa Alvarez, “Cloud computing allows for resources and paying only for what they use. When an application is not utilizing resources, those resources can be moved to another application that needs them, enabling maximum resource efficiencies. If additional capacity or resources are no longer needed, virtual servers can be powered down or shut off.”

Organizations continue to struggle to choose between private versus public clouds. On one hand, private clouds offer security and increased flexibility compared to traditional legacy systems, but they have a higher barrier of entry compared to public clouds. In contrast, private cloud services require that an enterprise IT manager handle technology standardization, virtualization and operations automation in addition to operations support and business support systems.

“With public clouds, you provision your organization very quickly, by increasing service, storage and other computing needs, “says Zukis. “A private cloud takes a lot more time because you’re essentially rearchitecting your legacy environment.” Although public clouds don’t require this organizational shift and are thus faster and more convenient, they fail to provide the same amount of transparency as private clouds. Says Zukis, “It’s not always clear what you’re buying off the shelf with public clouds.”

Assessing the Value of Security

Another major issue in the cloud debate is security. All organizations value security but each has to decide between balance between cost and convenience, on one hand, and data security, on the other. Some organizations might have a higher threshold for potential violations than others and thus require a need-for-speed strategy.

Head of strategic sales and marketing at NIIT Technologies Aninda Bose, who has analyzed both cloud structures through her job and also in her position with nonprofit research organization Project Management Institute, states that the public cloud is the better option for an enterprise dealing with high-transaction/low-security or low data value. An example illustrating this is a local government office, which needs to tell a citizen that their car registration is up for renewal and simply needs to give the citizen a renewal date—a perfect situation for public cloud hosting.

Examples better suited for the private cloud model due to the sensitivity of their data include a federal agency, financial institution or health care provider. Mark White, principal with Deloitte Consulting, explains, “Accounting treatments and taxation applications are not yet fully tested for public cloud services. So enterprises with significant risk from information exposure may want to focus on the private cloud approach. This caution is most relevant for systems that process, manage and report key customer, financial or intelligence information. It’s less important for ‘edge’ systems, such as salesforce automation and Web order-entry applications.”

Sioux Falls, South Dakota-based medical-practice company The Orthopedic Institute is very data-dependent and concluded that the private cloud structure best fit its needs—specifically because the company must comply with strict rules for protecting patient information laid out by HIPAA (Health Insurance Portability and Accountability Act).

IT Director David Vrooman explains that The Orthopedic Institute was seeking to change it domain name from but after exploring possibilities with the exclusive provider of .md domains MaxMD it determines that MaxMd could also provide private cloud services for highly secured, encrypted email transmissions. Moreover, the cost of entry was less than doing it in-house. “We didn’t want to use one of our servers for this because it would have amounted to a $20,000 startup cost. By going with a private cloud option, we launched this at one-fifth of that expense—and it only took an afternoon to get it started, ” says Vrooman. “It would have taken at least a week for my staff and me to get this done. And because MaxMD has taken over the email encryption, I’m not getting up at 3am to find out what’s wrong with the server.”

Some industry experts warn that traditional views about security and cloud computing may be changing, however, and that includes organizations which are dependent on highly secured data. CPA2Biz, the New York-based American Institute of Certified Public Accountants, wanted to provide its 350,000 members with access to the latest software tools for its business resources-providing subsidiary. CPA2Biz worked with Intacct to create a public cloud model for its CPA members. The program was launched in April and since then concerns have about security have been addressed and hundreds of firms are supporting approximately 2,000 clients through the public cloud services offered through CPA2Biz.

“Only those in the largest of member organizations would be able to consider a private cloud system. Plus, we don’t believe there are security advantages to a private cloud system,” says vice president of corporate alliances at CPA2Biz Michael Cerami. “We’ve selected partners who operate highly secure public cloud environments. This allows us to provide our members with great collaborative tools that enable them to work proactively with their clients in real time.”

The Choice

Going back to United Seating and Mobility, the organization was interested in the public cloud structure because it isn’t dependent on high-volume, automated sales. The company uses IMB’s LotusLive Engage for online meetings, file-sharing and project-management tasks.

DeHart estimates that it would have taken up a server and a half had it done this in house saying, “Being on the public cloud allows us to avoid this entirely. It’s a leasing-versus-owning concept—an operational expense versus a capital one. And the Software-as-a-Service offerings are better than what we could get off the shelf. We certainly can’t use this cloud to work with any sensitive health data. But we can run much of our business operations on it, freeing up our IT people to focus on email, uptime and cell phone services.”

Now, take the Cleveland Cavaliers. They opted for private cloud services to support the website for their venue, Quicken Loans Arena, aka “the Q.” Fans can search for information about upcoming events on and are directed to a business called Veritix is they want to buy tickets. The arena site acts as a traffic conduit for Veritiix, thus a private cloud was the best option and the team partnered with Hosted Solutions. Since the current NBA season began last fall, the site’s page views and visits have seen an increase of over 60 percent and the number of unique visitors has increased by 55 percent. The team avoids uncertainly about who is minding the data by employing Hosted Solutions.

The private cloud also enables the team to manage site traffic that can jump significantly in the case of a last-second, playoff-determining shot, for example. “The need to scale was significant but we didn’t want to oversee our own dedicated hosting,” says Lillibridge. “It would have been more expensive, and we would have had the headache of managing our own servers. We needed dedicated services that would avoid this, while allowing our capacity to increase during peak times and decrease when we don’t have a lot of traffic.”

There is no clear cut answer for whether the private or public cloud is better, rather companies needs to assess their own individual requirements for sped, security, resources and scalability. To learn more about which Cloud option is right for your enterprise, contact a Nubifer representative today.

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