Honestly, I’m still wrestling with the “private cloud boundary” myself and I’ll likely write a follow up post on it, but here is my current thinking.

Both the value and complexity of a cloud, public or private, increase with size. On the low end of IaaS, I expect server O/S vendors will turn the complexity into a commodity and we will see more “cloud in a box” solutions that are direct replacements for racks of Windows or Unix servers. It’s just a more flexible model. Firms will be willing to spend the same cash they spend today if they can get more agility.

But, at the PaaS and SaaS layers and the high end of IaaS beyond a single rack of servers, the complexity and cost of managing APIs, applications, and highly distributed infrastructure would have to be countered by extreme security, privacy and compliance requirements for firms to maintain them in-house. And, you will see specialty cloud providers that guarantee high security, privacy and compliance. So, only the biggest firms would be able to manage such infrastructure at all and moreover do it better than a specialist (thinking Fortune 1000).

But truly, it is more a question of what percentage of IT workloads by layer (IaaS/PaaS/SaaS) than what percentage of IT departments. Because, even large firms will opt to outsource low risk applications and infrastructure. And, small firms will keep in-house very high risk applications as long as they can afford it.

On the high-end though, here is a timely post from Sandhill.com on 7 Key Requirements of Private Clouds. So, the real boundary would be determined by asking the question: “Can your IT department meet these requirements cost effectively? Or, at all?”

Cheers,

JY

“only the largest IT organizations can come close to internally matching the dedicated expertise….” Couple of questions (1) how large is large, we know eBay has gone hybrid cloud, and it’s been promoted as a likely cost effective solution for many others, yet I wonder in reality if this is really only 1% or less of the world’s IT shops, not the 40 or 50% that IT managers are grasping for – the other 99% would all be served by cloud in the end, (2) what do you think of so-called “private cloud” in this context?

The Azure slide shows the cloud value, and it could also be used to show “hybrid” value by those who want to promote private cloud as taking the base workload. I know that the shift won’t happen overnight, we’re talking 5 to 10 years I imagine, but other than “enterprise sales prowess to motivate customers over FUD”, which will be well exploited by the private cloud leaders, is there any real value in private cloud for the majority of businesses?

Walter Adamson @g2m
http://xeesm.com/walter