The Private cloud has many negatives, including higher initial investment, decreased flexibility and higher maintenance costs when compared to a public cloud model.

With the price of public cloud falling, new features constantly being added and security being beefed up, you would think that implementing a private cloud would be last thing an SME would want to do.

According to John Treadway, Senior Vice President at Cloud Technology Partners, while enterprises will continue to build and deploy private clouds (presumably because they have the scale to do so) most others will "fall into a pit of despair and abandon their private clouds because they can't keep up".

"How many enterprises write their own DBMS? SFA/CRM? Operating Systems, Networking, HRMS, ERP, or other systems? How many enterprises custom design their own servers and storage devices?" asks Treadway in a blog. "You know at some point early in the market many of them did just that. Then a vendor solution came along and made continuing their investment a bad business decision."

Treadway says that Amazon, Google, Microsoft and (perhaps) IBM are proving that they can run data centres and clouds far more effectively than most enterprises.

"And it's only going to get worse for the in-house IT team. The sheer scale, cost model, and ability to invest in R&D for data centre technology and operations solutions just favours the bigger players and the gaps are only going to grow," he adds.

Security & Technology

For William Fellows, Vice President of CloudScape research at analyst firm 451 Research, the problems that are holding most customers back continue to be fear over security and lack of some critical technology.

"The critical technology missing is mostly on the networking and storage side – lack of bare-metal clouds is also a barrier, since not all apps are virtualised," he says. "On the networking side, the need for a single secure network that flows from inside the enterprise and back remains largely unmet. VPNs and physical networks that can directly connect a customer to their clouds, so the cloud resources look like an extension of their networks, are rudimentary today."

He adds that organisations will be looking for practices and tools that can automate the delivery of workloads and applications to the most suitable execution environments. "Whether that is determined by price, performance, compliance requirement or some other SLA. The best execution venue may be an internal cloud, a public cloud, some more trusted cloud or a hosted dedicated environment," he says.

Data Gravity

Rajesh Ram, Vice President of Products at Egnyte believes that the private cloud will live on due to the permanent enterprise demand for 'data gravity': "Which means not all files are designed nor designated for the public cloud."

"Beyond the primary concern over security surrounding the storage of critical business data in public clouds where the data owner does not have total control, latency in data transfer is the concern businesses are using the private cloud to answer," says Ram.

Madhavan Krishnan, Cloud Practice senior director at Virtusa says that far from dying off the adoption of private cloud is becoming increasingly widespread. This is especially true in traditionally more resistant industries such as financial services, telecoms and healthcare.

"The trend towards public cloud will only accelerate in the future as cloud's benefits become more apparent. However, there will be a healthy mix of systems which will remain on premise within a private cloud, for reasons of security, with other applications and infrastructure that will live in the public cloud," he says.

Kevin Linsell, head of Service Development at Adapt, agrees. He adds that the private cloud's popularity (as a stand-alone) will, "most likely diminish as public cloud platforms become more customizable. But as part of a hybrid solution they offer a level of separation, dedication and business alignment that's difficult to ignore."