The answer to whether public or private clouds are better is usually a resounding "it depends." Both technologies share some features, but each also has its unique advantages and disadvantages. The type of business is the primary determinant of which technology is the best solution. Here are three hypothetical case studies to illustrate the issue.
While Dotcom.com has been around for the better part of a decade, it is still rapidly growing in terms of its financial state, its headcount, and in terms of how its customers and users interact with it. The company's Internet-based business relies on having high levels of availability and solid performance for its Internet-based applications. Essentially everything that it does is tied to Internet applications, and their ability and scalability are mission-critical. Luckily, Dotcom.com has a large and highly-skilled IT department, although, like the rest of the company's workforce and its customer base, it is spread out globally in multiple small offices.
Dotcom.com is a classic example of a company that would benefit from moving as much of its business into the public cloud as possible. Given that it has a distributed workforce, most work is getting done over the Internet anyway, and its need for scalability and high levels for performance can be both better and more affordably met by public cloud solutions. The public cloud also allows for faster deployment of new applications, meeting the company's need for agility.
Widget Manufacturing Co.
Widget Manufacturing Company is a mature, mid-size business that uses the Internet as a part of its operations, but it is not, in any way, an e-commerce company. It has many legacy applications that have been serving it well for years and are likely to continue to be an important part of the business. Its growth and its demand for computing resources is relatively predictable, and the company has an adequate caretaker-IT team spread across its locations, but they are centered in its headquarters.
For Widget, a private cloud is probably the best solution, although some applications could be transitioned to SaaS (software-as-a-service) in the cloud when it is cost-effective. Since it is neither experiencing usage spikes nor rapid growth, the scalability of the public cloud wouldn't bring benefits, and the cost of transitioning legacy applications wouldn't provide adequate ROI (return on investment). Given the nature of its IT staff, a pre-configured private cloud would allow it to better use its computing resources without overtaxing it.
Big Regional Bank Inc.
As a major financial institution, Big Regional Bank occupies a middle ground. On one hand, it has many legacy applications that it uses as a tool in its business. It is also subject to stringent security requirements for compliance. On the other hand, its retail applications require cutting-edge technology to compete with national and global institutions. It also has many activities that can cause variable demand, including marketing analyses, transaction processing on certain days of the month, and financial modeling and testing activities in its trading and finance departments. To support its infrastructure, Big Regional Bank has a large and skilled IT department.
While Big Regional Bank might initially seem like a natural fit for private clouds because of the sensitive nature of its industry, scratching behind the surface reveals places where a hybrid cloud installation is likely the best choice. Less sensitive customer-facing tools can go to the cloud as can marketing and modeling activities. At the same time, it might also choose to maintain an oversized private cloud infrastructure to manage sensitive financial data while also having enough capacity for peaks in demand. In addition, the company might need distributed datacenters to serve its diverse customer base and to provide redundancy.