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Growth In Private Cloud Adoption Continues To Rise

More businesses are signing up to join private cloud services as record growth becomes the norm, says Frank Ohlhorst

The adoption of private cloud technology keeps going and going. In December, Cloud hosting company Softlayer reported that it had record-setting growth for its private cloud deployments, almost doubling revenue in the process.

Another example is DynamicOps, a cloud services provider that has seen some 300 percent growth in the private cloud market through 2011.

Record growth

While Softlayer and DynamicOps are the latest example of rapidly-growing cloud services companies, they are by no means the only one. Many other services vendors are claiming that 2011 has been a banner year for growth. INetU, a managed hosting provider, reported that it added a sixth data centre last summer to support demand for cloud services and expanding its property holdings by 144 percent in 2011 in anticipation of additional growth.

Hosting giant Rackspace has also benefited from the increased demand for cloud services, posting double-digit growth for the last five quarters. Server Intellect, yet another private cloud hosting company, has seen impressive growth as well, and increased data centre expansion last year.

The above-mentioned companies all share one thing in common: all are in the hosting business – a business that is akin to outsourcing IT operations, especially when private cloud technology is the primary service on offer.

It is obvious that private cloud-based environments will continue to grow and that hosts will maintain the upper hand, simply because they already have the infrastructure in place to lease out private clouds. What is more, the explosive growth demonstrated by these hosting companies, and many others, counters arguments that the supply of private cloud hosting services will soon exceed the demand. Analyst firm Gartner predicts worldwide revenues for cloud services are expected to reach $148.8 billion (£95.3bn) by 2015.

Simply put, private clouds are arriving on the IT front, and it will be an IT paradigm shift that will become almost impossible to avoid. However, there may be a shift in the future of how enterprises will manage and deploy private clouds. It all comes down to how larger enterprises want to adopt the technology.

“Interest in private cloud is high because of the speed and agility that it promises, Rachel Chalmers, research director, Infrastructure Management for 451 Group, told eWEEK in an email. “However, in order to realise these benefits, enterprises must be able to easily transition to and manage the infrastructure,” Chalmers wrote.

Hard facts

This is a point that may not be well understood by enterprises seeking to transition to private clouds. Removing the “private cloud” from IT operations exposes one significant truth: physical infrastructure must exist somewhere to “host” the cloud services. Usually, that physical infrastructure is virtualised to abstract the hardware from the services. Yet that hardware still has to exist.

With so many enterprises currently operating their own data centres, or at the very least their own server farms and infrastructure, a hosted private cloud may be an anachronism. Why pay to use external hardware, when that hardware may already fall under corporate ownership.

That is where hosted private clouds will run into the first speed bumps, thanks to the efforts of companies such as Microsoft, HP, IBM and Oracle. All of which are offering and developing the tools needed to build private clouds on internally supported hardware. Simply put, those software and hardware giants are on a mission to place private clouds into the corporate data centre, possibly reducing the overall demand from enterprises for externally hosted services.