Public Cloud vs. Private On-Premise Cloud

By Kaushik Pal
Published: November 23, 2016 | Last updated: May 2, 2017
Presented by Cloudistics
Key Takeaways

Public cloud and private on-premise cloud are both popular options for business, with each serving different niches.

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The cloud environment has become an integral part of nearly all businesses. There are multiple variants available in the cloud space, such as public cloud, private cloud and hybrid cloud. Organizations must analyze their requirements to choose the proper cloud infrastructure. Public cloud is the most economical choice by default, as it is a common infrastructure maintained by third-party vendors and used by multiple clients. It offers limited configuration and security controls. On the other hand, private cloud is exclusive for individual enterprises. It has more control on the configuration and security side. This private cloud has two variants: on-premise and externally hosted. On-premise private cloud is hosted by the organizations themselves, and they incur the cost of space, infrastructure and other related things. This is best when an organization needs complete control over the environment, whereas externally hosted private cloud is maintained by third-party vendors.


Why Cloud Is So Important

The cloud has solved quite a few business problems that enterprises had been facing, such as storage, data security and maintenance costs. However, there has been a debate across enterprises on the benefits offered by the variations of cloud: public cloud, private cloud and private on-premises cloud. Private on-premises cloud is a sub-category of private cloud. Enterprises have been weighing the pros and cons of private cloud and its variations. Both public and private on-premise cloud have their benefits and downsides, while sharing certain common features. It is possible to calculate the tangible and intangible benefits both forms of cloud offer, and upon analysis, enterprises can decide which type of cloud is more suitable for them. (To learn about cloud providers, see The Four Major Cloud Players: Pros and Cons.)

What Is Public Cloud?

Public cloud is a cloud service in which the service provider makes available resources such as applications, storage and storage upgrades to the general public for free or on a pay-per-usage model. In certain cases like those of service providers Dropbox and Google Drive, a certain storage capacity in the cloud is given to the subscriber for free. To increase the storage capacity, the subscriber must pay. Examples of prominent public cloud service providers are IBM’s Blue Cloud, Amazon Elastic Compute Cloud (EC2), Windows Azure Services Platform and Google App Engine. The main benefits of public cloud are:

  • Inexpensive because of economies of scale – The cloud infrastructure is shared across many subscribers who use it for free or pay per usage. There is no need to set up an infrastructure because hardware, application and bandwidth are covered by the service provider.
  • Scalability – The subscriber can scale the storage capacity up or down based on needs.
  • No resource wastage – The subscriber pays only for what is used.

What Is Private On-Premise Cloud?

Private on-premise cloud is a variation of private cloud services which is hosted in the subscriber’s premise or office. The responsibility of managing the private on-premise cloud is with the subscriber, who must arrange all infrastructure and resources needed to manage and sustain the cloud infrastructure. Private on-premise cloud service offers many benefits, but also has a few downsides, meaning that enterprises need to be careful while selecting the proper cloud service package. The main benefits of private on-premise cloud services are that dedicated cloud services guarantee data security, storage and scalability as per requirements. However, enterprises need to keep in mind that to utilize this service, they need to bear the cost of hosting, maintaining and troubleshooting the cloud infrastructure, which is not necessary in the case of private cloud.

Pros and Cons

Public cloud services and private on-premise cloud services cater to different requirements and should be chosen based on the features best suited to a particular enterprise.

Public Cloud

The main benefits of public cloud are:

  • Inexpensive and easy to use – Cloud resources are shared across multiple subscribers who collectively pay for the services, and the subscription process is simple and straightforward.
  • Scalability – Cloud storage can be upgraded based on requirements. Upgrading is quick and simple with most service providers.

The main drawbacks of public cloud are:

  • Security – Though so far no major attacks on public cloud services have been reported, security and regulatory compliance remain the biggest concern with public cloud. According to James Staten, vice president and principal analyst at Forrester Research, public cloud providers like Azure provide security to the point of abstraction and not beyond. Subscribers are responsible for the security of their own applications.
  • Reliability and availability – Public cloud applications are prone to periodical outages, which can hamper business.

Private On-Premise Cloud

The main benefits of private on-premise cloud are:

  • Compliance – The subscriber, depending on local laws, may need to comply with multiple regulations. Private on-premise cloud allows customization to comply with local and national regulations.
  • Security – Subscribers have more freedom to implement stricter security measures on their dedicated cloud applications.
  • Visibility – Public cloud does not give subscribers the visibility of where their data is, unlike private on-premise cloud services.
  • Reliability and accessibility – Private on-premise cloud applications guarantee zero downtime of servers and are good for business continuity.

The main disadvantages of private on-premise cloud are:

  • Expensive – Since the subscriber is responsible for managing and troubleshooting the cloud infrastructure and resources, it is a costlier proposition than public cloud.
  • Complex – Managing the cloud infrastructure, depending on the size of the business, can be complex given the volume of resources and personnel needed to manage it.

Selection Criteria

The selection of the appropriate cloud service depends on the business and its requirements.

Public cloud is appropriate for the following groups of subscribers:

  • Subscribers that have budgetary constraints – As stated earlier, public cloud is a shared or multitenant service, and therefore its cost is shared.
  • Subscribers without complex legal compliance needs – Subscribers who do not need to comply with a huge volume of regulations, unlike large or medium-sized enterprises, can rely on public cloud because it complies with just the basic regulations and no more.
  • Subscribers with minimal security requirements – Public cloud, as stated earlier, has issues with security and regulatory compliance. Public cloud providers tend to provide just the basic security and nothing more. So, public cloud may not be ideal for enterprises that require security and confidentiality for the data they manage. Public cloud is certainly not meant for banks, for example.

Private on-premises cloud may be ideal for the following subscribers:

  • Subscribers with security and compliance obligations – Enterprises that deal in confidential data such as credit cards, bank accounts and defense need high-security applications. Private on-premise cloud applications support high-security features and protect confidentiality of data. Such enterprises also may need to comply with local and national regulations of different types. Private on-premise cloud applications are regulation-compliant since they can be customized.
  • Complete control over the environment – This is ideal for organizations that need to have complete control on the infrastructure environment.

The following trends have been forecast for the coming years for cloud computing by different experts:

  • It is going to be easier to move data to the cloud as self-service grows. For users, it might even be as easy as copy and paste.
  • Companies that are using cloud or plan to will rely heavily on cloud analytics for cost reduction and efficient resource utilization. (To learn more about cloud analytics, see The New Efficiency of Cloud Analytics.)
  • The overall role of IT will shift. According to Sanjay Beri, founder and CEO of enterprise cloud app security specialist Netskope, “Cloud adoption will peak and shift the role of IT from system fixers to innovation brokers as IT professionals develop new productivity tools and proactive policies to help enterprises make use of the cloud."


Public cloud, for all its security and compliance issues, will continue to be a popular service simply because it is an easy and economical option. It will continue to find acceptance among general users and has already carved out a niche for itself. Private on-premise cloud, on the other hand, will gradually carve out its own niche at the enterprise level because of its customization and security features. This shows that both service types will each have their own exclusive niche areas.


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Written by Kaushik Pal | Contributor

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Kaushik is a technical architect and software consultant, having over 20 years of experience in software analysis, development, architecture, design, testing and training industry. He has an interest in new technology and innovation areas. He focuses on web architecture, web technologies, Java/J2EE, open source, WebRTC, big data and semantic technologies. Kaushik is also the founder of TechAlpine, a technology blog/consultancy firm based in Kolkata. The team at TechAlpine works for different clients in India and abroad. The team has expertise in Java/J2EE/open source/web/WebRTC/Hadoop/big data technologies and technical writing.

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