Public cloud vs. private cloud vs. hybrid cloud: What’s the difference?

It’s hard to imagine a business world without cloud computing. There would be no e-commerce, remote work capabilities or the IT infrastructure framework needed to support emerging technologies like generative AI and quantum computing. 

Determining the best cloud computing architecture for enterprise business is critical for overall success. That’s why it is essential to compare the different functionalities of private cloud versus public cloud versus hybrid cloud. Today, these three cloud architecture models are not mutually exclusive; instead, they work in concert to create a hybrid multicloud—an IT infrastructure model that uses a mix of computing environments (e.g., on-premises, private cloud, public cloud, edge) with public cloud services from more than one provider.

What is cloud computing?

Cloud computing enables organizations to use infrastructure and applications over the internet without installing and maintaining them on-premises or in-house. This infrastructure model relies on a network of remote data centers, servers and storage systems owned and operated by a third-party service provider. A prime benefit of cloud computing for business is its flexibility for quickly and efficiently scaling resources to meet business demands, freeing organizations from investing time and expense into expanding their own physical IT infrastructure.

While cloud computing technology has been around since the 1960s, it wasn’t until the early 2000s that modern cloud infrastructure for business emerged. Internet companies like Amazon led the charge with the introduction of Amazon Web Services (AWS) in 2002, which offered businesses cloud-based storage and computing services, and the launch of Elastic Compute Cloud (EC2) in 2006, which allowed users to rent virtual computers to run their own applications.

In 2020, during the COVID-19 pandemic, businesses accelerated their cloud adoption to provide remote access to data, storage and operations so they could maintain business continuity during lockdown. According to the most recent IBM Transformation Index: State of Cloud, more than 77% of respondents have adopted a hybrid cloud approach to help drive digital transformation.

What do private cloud, public cloud and hybrid cloud have in common?

Private cloud, public cloud and hybrid cloud models all use a mix of the following technologies:

Virtualization

Foundational to cloud computing, virtualization is an abstraction layer that enables the hardware resources of a single computer—processors, memory, storage and more—to be divided into multiple virtual computers known as virtual machines (VMs). Virtualization connects physical servers maintained by a cloud service provider (CSP) at numerous locations, then divides and abstracts resources to make them accessible to end-users wherever there is an internet connection. Besides virtualizing servers, cloud computing uses many other forms of virtualization, including network virtualization and storage virtualization.

Management software

All cloud computing models leverage various software tools, including a centralized management platform (CMP). A CMP creates a single pane of glass (SPOG) that provides visibility into multiple sources of information and data. This unified view gives administrators and development teams centralized control over their infrastructure and apps, making it possible to optimize cost, security, availability and resource utilization.

Automation

Automation tools are a significant feature of cloud-based infrastructure. These tools reduce the need for human intervention and make self-service resource delivery possible. Examples of software automation incorporated into most cloud environments include the following:

• Automation and orchestration tools 
• Governance and compliance tools
• Security tools
• Performance monitoring tools
• Cost management tools

Application programming interfaces (APIs)

APIs play a significant role in cloud computing by enabling communication and interaction between different software applications and services, including facilitating access to data storage and databases, accessing and managing security controls, and more.

Cloud-based applications and services

Cloud-based applications and services support myriad business use cases—from backup and disaster recovery to big data analytics to software development. Each service facilitates data flow over the internet between front-end clients and back-end cloud systems provided by a cloud service provider. These services can be deployed in public, private and hybrid cloud settings.

Here’s a rundown of the most common cloud computing services available from the major CSPs—Amazon Web Services (AWS), Google Cloud Platform, IBM Cloud or Microsoft Azure—and other cloud services providers like VMware:

• Software-as-service (SaaS) is on-demand access to ready-to-use, cloud-hosted application software (e.g., Google Workspace, Salesforce). According to a Gartner report (link resides outside ibm.com), almost two-thirds (65.9%) of enterprise IT spending will go toward Software-as-a-Service in 2025, up from 57.7% in 2022.
• Platform-as-a-Service (PaaS) is a complete cloud platform—hardware, software and infrastructure—for developing, running and managing applications. By implementing a PaaS platform, an organization can avoid the cost, complexity and inflexibility of building and maintaining an on-premises platform.
• Infrastructure-as-a-Service (IaaS) is a cloud computing model that delivers fundamental compute, network and storage resources. IaaS enables end users to scale and shrink resources as needed, reducing the need for the high, up-front capital expenditures tied to on-premises infrastructure.

Most other service offerings from public cloud providers are extensions (like security or cost control platforms) that work with the above three basic models. That said, other service platforms include:

• Business-Process-as-a-Service (BPaaS) is a business process outsourcing platform that combines IaaS, PaaS and SaaS services.
• Function-as-a-Service (FaaS) is a subset of SaaS in which application code runs only in response to specific events or requests.
• Serverless computing (or serverless) is a computing model that offloads all the backend infrastructure management tasks—provisioning, scaling, scheduling, and patching. Serverless computing allows software developers to devote more attention to the code and business logic specific to their applications.

What is a public cloud?

 A public cloud is a computing model where a cloud service provider makes computing resources (e.g., software applications, development platforms, VMs, bare metal servers, etc.) available to users over the public internet. CSPs sell these resources according to subscription-based or pay-per-usage pricing models.

According to a Gartner report (link resides outside ibm.com), worldwide end-user spending on public cloud spending is forecasted to total $679 billion and is projected to exceed $1 trillion in 2027.

Public cloud environments are multi-tenant, where users share a pool of virtual resources automatically provisioned for and allocated to individual tenants through a self-service interface. In this scenario, multiple tenants’ workloads might run CPU instances simultaneously on a shared physical server, yet their data remains separate. By having numerous customers share resources, cloud vendors can offer their services to many customers at a lower cost than if these clients maintained their own infrastructure. 

Benefits of public cloud

• Rapid scalability: Add compute capacity instantly or automatically in response to unexpected surges in traffic.
• Affordability: Avoid the investing required to deploy and maintain on-premises IT infrastructure. Pay only for the resources or services you use to aid cost savings.
• Ease of set up: Quickly spin up new servers or other resources without purchasing hardware or configuring physical infrastructure.

What is a private cloud?

A private cloud environment is a cloud computing model dedicated to a single organization. Unlike a public cloud, a private cloud is a single-tenant environment—resources are accessible to one client only. Private clouds can be hosted on-premises in an organization’s data center, on rented infrastructure in an offsite data center or on a cloud service provider’s infrastructure.

A private cloud offers greater control over security and resource customization than a public cloud. Many organizations opt for a private cloud setting to protect sensitive data—a business need that is becoming increasingly important. For example, government agencies frequently choose private cloud settings for workloads that deal with confidential documents, personally identifiable information (PII) or other sensitive data. According to a Gartner survey (link resides outside ibm.com), 75% of the world’s population will have personal data covered under modern privacy regulations by 2024.

Businesses can customize a private cloud to meet specific data protection needs by using firewalls, virtual private networks (VPNs), data encryption, API keys and other customized security measures. Additionally, a private cloud allows organizations to choose the location and jurisdiction of their data. For instance, global organizations in industries like oil and gas must adhere to stringent regulatory compliance standards dictated by industry guidelines and local, national and international laws. With a private cloud, they can customize and fully enforce and tailor their compliance measures instead of relying solely on a cloud service provider’s capabilities.

Private cloud benefits

• Increased resource control: Gain more control over IT resources with configurations maintained by internal IT team members. 
• Customization: Customize hardware and software tailored to meet unique business needs, such as policies for compliance.
• Robust security: Gain greater visibility and access control by storing sensitive data and applications behind private firewalls that limit the attack surface.

What is a hybrid cloud?

A hybrid cloud environment combines a public cloud, private cloud and on-premises infrastructure to create a single IT infrastructure so companies can get the most out of all computing environments based on their needs. Essentially, it’s the best of both worlds.

Organizations favor a hybrid cloud model for its agility in moving applications and workloads across cloud environments based on technological or business goals. For instance, public cloud resources can scale up quickly, automatically and cost-effectively in response to spikes in traffic without affecting private cloud workloads. This configuration method, known as “cloud bursting,” helps organizations manage sudden surges in computing demand, which can occur in online retail situations like Black Friday sales.

In the recent past, a hybrid cloud approach focused mainly on migrating workloads from on-premises data centers into private cloud infrastructure and then connecting that infrastructure to a public cloud. Today, hybrid cloud architecture focuses more on supporting the portability of workloads across all cloud environments and then automating the cloud deployment of those workloads to the best cloud environment for a given business purpose.

Another core function of hybrid cloud is to support microservices (or microservices architecture), the cloud-native architectural approach in which a single application comprises many loosely coupled and independently deployable smaller components or services. Cloud-native applications are deployed in containers. Orchestration tools such as Kubernetes or Docker Swarm then schedule the automated deployment, management and scaling of those applications across all cloud computing environments. Microservices have become crucial for DevOps methodologies. Microservices help teams develop applications once and across all types of clouds. Uber, for example, depends on a microservices architecture to build and release its ride-hailing and food-delivery services quickly.

Hybrid cloud architecture also provides resource flexibility to help manage data gathered from multiple edge and Internet of Things (IoT) settings with flexible compute, network and cloud storage resources. On a manufacturing factory floor, for example, a hybrid cloud helps to provide an end-to-end solution for gathering insights, analyzing data and delivering predictive maintenance solutions with low latency and no downtime.

Benefits of hybrid cloud

• Flexibility: Allocate workloads to fit best with business needs. Utilize public cloud resources for short-term projects like development and testing. Protect confidential or sensitive data on private cloud infrastructure.
• Improved application development: Expand adoption of agile and DevOps methodologies, enabling faster application development and time to market.
• Digital transformation: Leverage vast amounts of compute to process big data and harness the latest technologies like generative AI and machine learning (ML).

The hybrid multicloud

These days, most enterprise businesses rely on a hybrid multicloud environment. A multicloud refers to using cloud services from more than one cloud vendor and helps companies to avoid vendor lock-in, which can result in technical incompatibilities, legal restrictions and excess costs tied to using just one vendor. Beyond the flexibility to choose the most cost-effective cloud service, hybrid multicloud provides the most control over where workloads are deployed and scaled, enabling organizations to operate with greater efficiency, improve performance and optimize spend. 

IBM and your cloud journey

Cloud computing—whether in the form of a private cloud, public cloud or hybrid cloud—has become the bedrock of every modern digital transformation journey. With over 20 years of deep technical and consulting experience, IBM is helping clients across all major industries build cloud strategies tailored to meet their needs and derive the most business value. 

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