May 11, 2022

The private cloud sector is just taking off

Companies that require very high levels of data security are using private cloud environments that only verified users can access. These corporate clouds are not accessible by the general public, but can be set up to run via the public internet or internal private networks, or a combination of both.

A private cloud offers similar benefits to a public cloud environment, in that it is scalable, elastic and customisable. Dedicated to a single institution, these ‘single-tenant’ environments mean that all the cloud resources are only accessible by authorised employees.

Although generally hosted on the company’s on-premise data centre, private clouds can also be hosted on rented infrastructure. This results in resource optimisation for on-site infrastructure. With company firewalls and access control, highly sensitive data, such as financial records, medical files, intellectual property, confidential government documents and personally identifiable information (PII), are kept safe.

Private clouds have become increasingly more popular among certain financial, healthcare and government institutions. They allow these enterprises to meet regulatory compliance while still enjoying the benefits of a virtual approach to data management. Growth in the private cloud sector has been evident in recent years and figures suggest that the sector is only just taking off.

The market status of the private cloud sector

The global private cloud services market was valued at $3,7-billion in 2016, and is estimated to reach $14,1-billion by 2023, growing at a compound annual growth rate (CAGR) of 21.1% from 2017 to 2023. The Asian-Pacific is expected to register the highest CAGR in the near future. This region, which includes countries such as China, Singapore, Japan and Australia, offers lucrative opportunities for market players. The Middle East and Africa are also expected to gain traction, but the growth in these regions is expected to be stable during the forecasted period.

Public cloud infrastructure services are witnessing the highest levels of growth, with Amazon, Microsoft and Google taking up positions as segment leaders. Experiencing over 40% growth in 2018, Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) industries far exceeded the growth in private cloud services, which stood at around 10% in the same year.

Public cloud infrastructure has a huge customer base, including individuals, SMEs and large enterprises. So it makes sense that the public cloud is experiencing such rapid growth. But why is it that the private cloud sector is also taking off?

Drivers for change in the private cloud sector

The key drivers for growth in private clouds are security and compliance concerns. Having a mobile workforce has become a business necessity in recent years, with remote work shaking up how daily operations take place. Dynamic computing needs have resulted in many enterprises taking to the cloud to become more flexible and always-on. With this comes the increased risk of cybercrimes, ranging from isolated cases of malware downloads from email attachments, to large-scale distributed denial of service (DDoS) attacks that completely destabilise business networks.

Not only are home offices making enterprise security more difficult, but the bring your own device (BYOD) trend has also played its part. Employees connecting their personal devices to company networks potentially expose corporate networks to cyberthreats. In order to mitigate this, more companies are setting up private networks that require user-authentication and access control for certain devices. By putting these networks on the cloud, enterprises can still enjoy the benefits of the cloud while maintaining full control and visibility of what is happening on the corporate network.

New opportunities with a private cloud

Used in combination with a public cloud, businesses can have access to the best of both public and private architectures. When the private cloud reaches capacity, excess demand can spill over to the public cloud without any interruption to services and operations. Cloud bursting on public clouds means that enterprises can seamlessly handle overflow traffic.

Public clouds offer an economic saving because they are generally based on flexible payment models whereby businesses only pay for what they use. With additional resources on hand, fluctuations in demand can be easily managed. This hybrid model is often used to free up local resources on private clouds, harnessing the processing power of public clouds for critical operations. Freeing up space and scaling services when demand increases are the key features of this public-private cloud model.

Virtualisation over the cloud means that resources can be easily pooled, both in terms of human resources and technical resources. Business leaders are becoming aware of shortcomings of working in silos, and the cloud supports a more holistic business model. Information sharing, data storage, and effective workload management are made possible by virtual machines held on a cloud-based architecture.

Companies no longer need to invest in expensive physical hardware, or IT systems that quickly go out of date. By freeing up resources, the cloud offers a number of opportunities for innovation through collaboration, efficiency through automation and market response through data-driven analytics.

Getting the most out of a private cloud

A key challenge for businesses is that in-house IT departments need to take responsibility for their private clouds. The management and maintenance of a private cloud can be expensive, especially when private networks are not compatible with public cloud services. Cloud-native solutions work best for compatibility, making it much easier to move workloads or to use a hybrid cloud.

Many countries in Africa, Latin America and the Middle East have not yet adopted technologically advanced hubs with rich IT infrastructure and digital content. This, in turn, is expected to hinder growth in the private cloud services market in coming years.

If businesses have a short-sighted approach to cloud migration, it is likely that their cloud investment will offer limited returns. A more progressive approach is to consider how to make their cloud strategy profitable in the long-run. This includes making sure that their private clouds can easily integrate with public cloud services.

To overcome these challenges, businesses should consider using public cloud services, such as Microsoft Azure, as the starting point of their cloud strategy. SEACOM business’s cloud services include Microsoft Azure extensions, such as Azure stack, which can be used when building a private cloud.

This service ensures that an enterprise’s private cloud is compatible with the public cloud architecture, offering simplified management and maintenance. Developers can build and deploy apps using Microsoft-managed servers, ensuring the highest levels of integration. With Microsoft Azure, data resilience is inherent in its design.

Data security with next-generation firewalls and advanced encryption are also essential for large enterprises. To ensure the longevity of private clouds, companies should consider using a business-grade cloud provider as the starting point for their cloud model. For more information or to get a quote for our cloud services, email us at or leave us a message.

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