What’s the Diff: Private Cloud vs. Public Cloud

Private Cloud vs. Public Cloud illustration

The sheer number of cloud services on the market today can be bewildering. If you’re just starting out with the cloud, it helps to have answers to some basic questions.

Should you use private cloud storage? Public cloud storage? Pick the cheapest option and call it a day? That’s tempting, but knowing the difference can help you make a more informed decision.

In this post, we’ll dig into the pros and cons of a private cloud versus a public cloud, explain how a hybrid cloud strategy works, and help you decide which is right for you.

The First Question: What Exactly Is the Cloud?

Before you can understand the difference between a private cloud and a public cloud, we should take a step back and define what the cloud is in the first place.

Put simply, the cloud is a collection of purpose-built servers. These servers can perform one or more services (storage, compute, database, email, web, etc.) and can exist anywhere as long as they’re accessible to whomever needs to use them.

The next important question to ask is whether the servers are in a private cloud or a public cloud. This distinction was historically tied to where the servers are located, but more precisely, it reflects who uses the servers and how they use them.

What Is a Private Cloud?

If the servers are owned by and dedicated to only one organization (referred to as the user or tenant), they are in a private cloud. A private cloud can be built on-premises on hardware that you own and maintain at your location or hosted by a third party at a data center. The key defining factor is that the servers are not open to other users. The owner is responsible for the management and maintenance of the servers and planning for future capacity and performance to meet organizational needs. This planning usually involves long lead times to provision additional hardware and services (electricity, broadband, cooling, etc.) to meet the future demand.

What Is a Public Cloud?

In a public cloud, the servers are shared between multiple, unrelated tenants. A public cloud is off-site (or off-premises). Public clouds are typically owned by a vendor who sells access to servers that are co-located with many servers providing services to many users. Users contract with the vendor for the services they need. The user isn’t responsible for capital expenses (CapEx), and customers only have to pay for the resources they use as a recurring operating expense (OpEx) (see also, the difference between CapEx vs. OpEx). If their needs change, they can add or remove capacity quickly and easily by requesting changes from the vendor who reserves additional resources to meet demand from its clients.

Comparing Private Cloud to Public Cloud

To better understand private clouds and public clouds, let’s take a closer look at the advantages and disadvantages of each offering. By the way, there is no reason for this to be an either/or decision. In their 2021 State of the Cloud Survey, Flexera found that 78% of respondents use a hybrid cloud approach, meaning they use both public and private clouds (more on that later).

Private Cloud Storage Advantages and Disadvantages

Like any kind of technology, there are pros and cons to using a private cloud. For industries with highly specialized needs like government and defense, using a private cloud can deliver a higher level of security and service. For companies outside these industries, using a private cloud may still make sense if you have data-intensive customers in highly security-conscious fields.

Advantages of a Private Cloud

  • Security. Private clouds offer a high level of security as organizations can physically secure their servers and access data through private networks.
  • Low latency. Data stored in an on-premises private cloud can be served quickly since resources are located closer to users, avoiding latency (i.e., delays in data transfer).

Disadvantages of a Private Cloud

  • Limited scalability. You may have to accept scalability limitations. Increasing the capacity of a private cloud in a short amount of time may not be possible.
  • Cost. Private cloud services typically have higher up-front costs than public cloud services.

Public Cloud Storage Advantages and Disadvantages

There are pros and cons to using a public cloud just as there are to using private cloud storage. Understanding the advantages and disadvantages can help you decide if a public cloud is right for you.

Public Cloud Storage Advantages

  • Monthly payments. In contrast to building a data center, a public cloud storage service can offer a low monthly cost instead of a significant up-front expense.
  • Fast setup. Further, most public cloud services are designed to be easy to start, though there are exceptions.
  • Incentives. Public cloud providers are able to offer incentives like free trials and free tiers that make their service more appealing to users.
  • Scalability and speed. Public cloud services offer significant scale and speed because they can spread the cost of their infrastructure across many customers.

Public Cloud Storage Disadvantages

  • Latency. Fractions of a second may not matter to most organizations, but in some industries, even small amounts of latency in sending or retrieving data to and from the cloud can cause performance problems.
  • Security limitations. Some companies, like defense contractors and banks, may require a higher level of security protection. Satisfying these security requirements is easier with a private cloud. Outside of a few industries with special requirements, public cloud service is often a good option.

Differences: Private Cloud vs. Public Cloud

Private CloudPublic Cloud
Single tenantMultiple tenants
On-premises or off-premisesOff-premises
Capital cost to set up and maintainNo capital cost
High IT overheadLow IT overhead
Fully customizableLimited customizations
Fully private networkShared network
Risk of under utilizationScalable with demand

Which Cloud Is Right For You?

If you’re a big company or organization with special computing needs, you know whether you need to keep your data in a private data center. For businesses in certain industries, for example, government or medical, the decision to host in a private or public cloud will be determined by regulation. These requirements could mandate the use of a private cloud, but there are more and more specialized off-premises clouds with the necessary security and management to support regulated industries.

A public cloud is the cloud of choice for those whose needs don’t yet include building a dedicated data center, or who like the flexibility, scalability, and cost of public cloud offerings. If the organization has a global reach, it also provides an easy way to connect with customers in diverse locations with minimal effort.

The growing number of vendors and variety of public cloud services indicate that the trend is definitely in favor of using a public cloud when possible. Even big customers are increasingly using a public cloud due to its undeniable advantages in rapid scaling, flexibility, and cost savings.

Enter: The Hybrid Cloud

Choosing a private or public cloud is not your only option—you can also use a hybrid cloud strategy. Hybrid cloud refers to the presence of multiple deployment types (public or private) with some form of integration or orchestration between them. An organization might choose the hybrid cloud to have the ability to rapidly expand its storage or computing when necessary for planned or unplanned spikes in demand, such as those that occur during holiday seasons for a retailer, or during a service outage at the primary data center.

There are several use cases where a hybrid cloud makes sense.

  1. To maximize disaster recovery speed. For companies that value speed and reliability, a hybrid cloud is a good choice for storing backups and using them in a disaster recovery scenario. Specifically, the approach here is to have a “warm disaster recovery” service on standby in the event of a disaster and then switch over to it when needed.
  2. To meet regulatory requirements. Some regulations require you to store data within a specific geographic footprint. A hybrid cloud is one way to meet these requirements.
  3. For data-heavy workloads. A hybrid cloud model also suits companies or departments that work with high volumes of large files like media and entertainment. They can take advantage of high-speed, on-premises infrastructure to get fast access to large media files and store data that doesn’t need to be accessed as frequently—archives and backups, for example—with a scalable, low-cost public cloud provider.

For more guidance on the hybrid cloud, including how the hybrid cloud is different from a multi-cloud approach (in short: using two public clouds in combination), see our post: “What’s the Diff: Hybrid Cloud vs. Multi-cloud.”

Choose the Best Cloud Model for Your Needs

For most businesses and organizations, the important factors in selecting a cloud will be cost, accessibility, reliability, and scalability. Whether a private or public cloud, or some combination, offers the best solution for your needs will depend on your type of business, regulations, budget, and future plans. The good news is that there are a wide variety of choices to meet just about any use case or budget.

We’d love to hear your approach to choosing cloud storage services. What is your preferred use case for a private cloud vs. a public cloud? Let us know in the comments.


About Molly Clancy

Molly Clancy is a content writer who specializes in explaining tech concepts in an easy, approachable way. With more than 15 years of experience, she has a broad background in industries ranging from B2B tech to engineering to luxury travel. A deep curiosity drives her repeated success explaining what terms like OS kernel and preflight request mean so that anyone can understand them.