More enterprises are building their own private clouds

The consultancy Technology Business Research recently released a report showing a shift toward the adoption of self-built private clouds over third-party-delivered private clouds. In other words, rather than buy private clouds, most enterprises are building private clouds from open distributions like CloudStack and OpenStack. Others deploy simple and primitive virtualization.

The report indicates that 65 percent of private clouds were delivered by third parties in the second half of 2014. The proportion of third-party private clouds was 70 percent in the first half of 2014, as well as in 2013.

There are a few reasons for this shift:

• The third-party private cloud technology providers are merely selling software (sometimes in the form of appliances) and are not doing a great job of providing technology that’s more compelling than IT’s offerings.
• Private clouds based on open standards (such as OpenStack) are typically adopted by more-innovative companies, which have very capable developers and implementers. They jump to standard code distros rather than go through a third-party distro provider.
• There are specialized requirements for a private cloud, such as high-speed database performance for analytics, high usage by devices, and enhanced security. IT typically can’t find an exact fit for those needs from a third-party provider, so IT builds it.
• The enterprise believes its private cloud is strategic to its business, and in turn, management believes the enterprise needs to own it and completely control it. Lately, I’ve run into a lot of this thinking at enterprises.

Although the shift from 30 percent DIY private clouds to 35 percent seems small, I suspect it’s a real trend in response to current realities in the marketplace. I am hard-pressed to justify an enterprise getting into the private cloud development business, but it seems that many are forging ahead in that direction.