Evaluating cloud solutions: Hosted private cloud’s strengths, weaknesses, and use cases

 In Cloud

Over the last several years, demand for hosted private cloud (HPC) has surged among technology decision-makers, and it’s now one of the fastest growing segments of the cloud market.

First-time external cloud users, hosting customers seeking improvements, internal private cloud realists, and disaster recovery (DR) specialists are among those choosing HPC for the middle ground it occupies: A compromise between public and on-premises private cloud models. HPC is capable of delivering the best of both worlds.

Despite spreading adoption, HPC is still one of the lesser-known cloud options.  In this post, we’ll introduce you to the benefits and limitations of HPC, share popular ways it’s being used today, and help you determine whether HPC is appropriate for your organization. Let’s get started!

Evaluating hosted private cloud types: Virtual vs. dedicated

Two types of HPC exist: Virtual Private Cloud (VPC) and Dedicated Private Cloud (DPC).

VPCs provide multi-tenant, logically isolated computing environments, similar to what’s offered in the public cloud. Organizations with small deployments that don’t justify dedicated hardware or have variable computing resource needs, and don’t require physical isolation of data, often choose a virtual private cloud.

Dedicated private clouds deliver physically isolated, dedicated hardware to a single tenant, combining the benefits of cloud computing with an on-premises experience. DPCs are a great fit for enterprises with strict hardware specifications or security and compliance requirements, or those that want visibility and control at the hypervisor level.

Companies tend to opt for DPCs, which eliminate the burden of managing the infrastructure while meeting performance requirements, so they’re a good middle ground for companies not yet ready for the public cloud. For this reason, we’ll focus on the managed DPC when looking at the strengths, weaknesses, and use cases for HPC.

 Strengths of a hosted private cloud

HPC, and DPC in particular, offers several attributes that make it attractive to businesses. Here are three of the biggest:

1. It’s fully managed.

The DPC model combines many of the benefits of traditional managed hosting, such as rapid enablement and cost savings, with the efficiency and flexibility of cloud computing.

Because DPCs are fully managed by a service provider, they allow your company to avoid many of the political, technical, and organizational obstacles that often impede private cloud success. Additionally, because your workloads are running in someone else’s data center, your team can skip the time-consuming procurement, troubleshooting, and break/fix activities that come with owning the hardware. IT teams can instead focus on higher-value tasks that will move the business forward instead of working just to keep the lights on.

2. It provides a dedicated, single-tenant environment.

DPC service providers supply each tenant with dedicated, physically isolated hardware in their data centers. That way, your company gains predictable performance since your workloads don’t compete with other tenants for cloud resources. You also don’t have to worry about cyber attacks on your co-tenants disrupting your workloads, and your own data is secure enough to pass muster for HIPAA, PCI, and other compliance guidelines.

3. It enables optimal resource utilization.

With on-premises solutions, organizations make large capital investments upfront and often purchase hardware and software for three- to five-year periods. Because they’re building a long-term solution based on projected needs, resources are often underutilized in the short term.

DPCs can be customized and rightsized to match exactly what an organization needs when they need it, minimizing waste while optimizing utilization of resources. Resources can be expanded and contracted based on application workload and demand.

The predictable performance and pricing structure of DPC makes it ideal for always-on and steady-state workloads. Organizations can purchase resources for one- or three-year periods at a substantial discount over those that are available on an on-demand basis.

Weaknesses of a hosted private cloud

Despite its benefits HPC, and DPC in particular, won’t be right for every organization. Here are a few reasons you might select a different cloud model.

1. Its costs are only semi-predictable.

 With DPCs, all costs are combined into a single recurring monthly bill similar to the one you receive for your cell phone. If you generally consume the same amount of resources month after month, this payment model may be a benefit. You know how much you owe, but still have the flexibility to scale up for special projects or anticipated growth.

If your organization’s workloads are unpredictable, you may want to avoid DPCs because usage spikes to accommodate fluctuating consumption of resources can result in additional unanticipated fees on your next bill.

2. It limits your scope of control.

DPC users are often limited in what they can do with their deployments because of the management policies and end-user license agreements (EULAs) set forth by their DPC service provider.

Many vendors limit customers’ control over managing their applications and data, preventing them from specifying how the underlying infrastructure should function. For instance, some DPC providers only offer paravirtual (PV) versus hardware virtual machines (HVM), which give the host access to the underlying physical hardware, delivering greater performance. This could be an issue for customers with Oracle databases, custom banking apps, or other homegrown applications with certain performance requirements.

Additionally, in managed DPC agreements, the service provider often controls which types of backups are available, which tools are used, how often backups are taken, and what the restore process is.

Larger organizations in particular that customize their applications and databases, those that have already invested in database or backup tools, or those that have specific policies in place may feel restricted by these controls. If they’re too burdensome for your organization, DPC may not be the right fit.

3. It has semi-limited agility, scalability, and availability.

DPC solutions can provide more agility, scalability, and availability than on-premises private cloud solutions, but often deliver substantially less than what is offered in the public cloud because DPC service providers have limited resources at their disposal.

Popular use cases for hosted private cloud

Because DPCs draw from the best of the cloud and an on-premises environment, organizations often rely on them for a number of scenarios:

1. Data center outsourcing

DPCs are a perfect fit for organizations that want to consolidate their on-premises data centers or get out of the data center business entirely. By taking advantage of DPC, you can leverage your service provider’s expertise and resources for many common tasks, such as upgrades and patching. Because you no longer need to lay out monies for items like generators, uninterruptible power supplies, air conditioning systems, and employee salaries, the cost savings can be substantial.

2. Housing sensitive data

Because DPCs allot each tenant its own dedicated environment, complete with customized protection mechanisms, such as intrusion detection systems, web application firewalls (WAFs), and OS hardening, they’re particularly well-suited for businesses with strict data security requirements. Your company’s data is isolated and safe from hacks or breaches targeted at other co-tenants.

 3. Supporting demanding, business-critical applications

Application workloads, such as SAP and Oracle, financial services applications, or data analytics apps, often dictate certain latency and performance requirements. By making use of dedicated hardware that can be customized to meet the demands of your most critical business applications, DPCs can provide each tenant with guaranteed latency and performance numbers.

 Need help with your hosted private cloud strategy?

The HPC market is complex, with many variables to consider. Each vendor’s solution supports different default management layers, compliance certifications, and performance SLAs. Before selecting an HPC service provider, you’ll want to understand its current offering, go-to-market strategy, and overall position in the market. Integration, automation, and ecosystem capabilities across vendors will help distinguish the leaders from the challengers.

If you’re looking for an alternative to an internal private cloud, a disaster recovery or business continuity solution for your on-premises workloads, or an external dedicated cloud service, you’ll want to consider an HPC. Contact your SHI account executive to learn more about how we can help you with your HPC strategy.

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