Public Cloud vs. Private Cloud - What are the key differences?

Public and private clouds differ in terms of access: a public cloud is shared by multiple businesses or private users, while a private cloud is dedicated to just one entity. Since the range of services can vary significantly between different clouds, it’s important to understand the differences, as well as the advantages and drawbacks of each option.

The differences between public cloud vs private cloud

When choosing between various cloud models, there isn’t a one-size-fits-all approach. Each cloud model offers unique advantages and drawbacks, depending on specific needs. The public cloud is one of the most popular services, requiring only a browser from its users. On the other hand, the private cloud is ideal for businesses that prefer independent IT infrastructures and their own data centres. Many private users also opt for it to store photos and other crucial data.

To make the right choice, you should know the differences between a public cloud and a private cloud. Since the services of the two are now merging seamlessly, differences and similarities may even overlap at times.

Multi-tenancy

In the public cloud, multiple tenants share the IT infrastructure, meaning that private users or businesses use resources together. This leads to high-cost efficiency because the infrastructure is utilised by multiple parties. However, this approach can pose a security risk under certain circumstances, particularly with strict regulatory compliance requirements, as sensitive data may not be completely isolated.

In contrast, the private cloud offers a dedicated infrastructure that is used exclusively by a single company or tenant, reducing the risk of data mixing or unauthorised access. Thus, the private cloud is better suited for businesses with strict data protection requirements.

Location of the infrastructure

The public cloud is typically hosted off-premises in non-local data centres operated by cloud providers, which are usually located outside the company’s physical infrastructure. This allows for high scalability and outsources maintenance and management to the cloud provider.

It’s different with private clouds, which can operate both in the company’s own data centres and in exclusively hosted cloud environments. This flexibility allows businesses to either manage the infrastructure entirely in-house or use dedicated resources from a cloud provider, while maintaining control over the environment within the company.

Provisioning of services and applications

In the public cloud, services and applications are hosted on the cloud provider’s IT infrastructure. This setup allows both applications and data to run on the provider’s resources, simplifying deployment but also creating a level of dependence on the provider’s infrastructure.

In contrast, with the private cloud, services and applications are kept within the company’s own network. This setup offers more control and security, as there are no shared resources with other companies or private users, ensuring better isolation and stronger security guarantees.

Offer models

While public cloud services are typically offered in various predefined subscriptions, plans, or complete packages, a private cloud can be tailored precisely to the specific needs of a company. This means that businesses can develop customised solutions for their individual needs, which requires more effort in implementation but also provides greater flexibility and control over cloud services.

Security

Despite state-of-the-art security measures and highly secured data centres, the multi-tenant approach of the public cloud can pose a security risk in some cases, especially with very strict regulatory compliance requirements. Since multiple companies share the same infrastructure, security gaps could potentially affect other tenants.

In contrast, the private cloud offers higher security precautions since the IT infrastructure is provided exclusively for one company, allowing for a higher level of control and isolation. This makes the private cloud particularly suitable for companies with high demands on data protection and security standards, such as in regulatory or business-critical areas.

Investment in infrastructure

Public cloud services don’t require major investments in infrastructure, as the IT environment is managed and provided by the cloud provider. Companies usually pay based on their actual resource usage.

The private cloud, in contrast—especially when operated on-premises or in exclusive cloud environments—often requires high investments in hardware and software.

An overview of the differences between the private cloud and public cloud

Advantages and disadvantages of both cloud models

The advantages and disadvantages of a public or private cloud model are defined not so much by its weaknesses, but by individual tenant requirements. For example, public clouds offer highly scalable IT resources, with an infrastructure shared among other users. For users like government agencies, security services, or financial institutions, the multi-tenancy and an external cloud IT may be considered a small but unacceptable security risk. Private clouds, on the other hand, offer high security standards but require investments in building an on-premises cloud environment.

Advantages and disadvantages of the public cloud

Using public cloud services offers companies numerous advantages, especially by outsourcing IT operating costs to cloud providers. This results in cost savings, as companies only pay for the resources actually used, while also having easy access to a cost-effective and always-updated cloud environment. Managed public cloud services also ease the server management and compliance with security and compliance standards, which particularly benefits smaller companies with limited IT resources. Additionally, these cloud services can be scaled and updated as needed, providing companies with flexibility and agility.

However, there are also risks associated with using the public cloud. The multi-tenancy of the public cloud can present an unacceptable security risk for companies with high regulatory compliance and security requirements. Additionally, using external cloud services can lead to a dependency on the provider’s IT environment, which limits control over the infrastructure.

Another issue is that the cloud infrastructure is not always located in the client’s country, which can lead to security gaps and concerns about data sovereignty due to differing legislations, such as the US Cloud Act. Lastly, many public cloud providers often do not offer tailored solutions for businesses, but instead provide pre-configured subscriptions or packages that may not always meet a company’s specific needs.

Advantages and disadvantages of the private cloud

A private cloud also offers a range of specific advantages. It is characterised by highest security standards, as the infrastructure is exclusive and company-owned. This ensures high control over data and the IT environment. Companies can operate the private cloud both on-premises with their own IT resources and off-premises with virtualised resources maintained by Managed Cloud Hosting. Another advantage is the flexible and quick access to the internal IT environment for selected user groups. Additionally, cloud services in the private cloud can be tailored to the specific needs of the company and expanded.

However, there are also some disadvantages. The private cloud requires a higher (initial) investment for exclusive cloud services as well as IT resources, hardware, and software licenses. Additionally, flexibility is somewhat more limited compared to the public cloud. With an on-premises private cloud without virtualisation, building and maintaining IT capacities can require additional effort. There is also the risk that on-premises cloud servers with inadequate IT security are more susceptible than the highly secure servers of cloud providers.

Use cases of public clouds and private clouds

Public cloud

Where the public cloud is used doesn’t depend so much on the industry or the company, but on the company’s own resources and IT needs. The public cloud is particularly suitable for high scalability and processing large workloads. Companies that both offer and use public cloud technology are:

• AWS (Amazon Web Services)
• Microsoft Azure ExpressRoute
• IBM Blue Cloud
• Google Cloud Platform
• Alibaba Cloud
• Oracle Cloud FastConnect

Especially for companies with limited IT resources that want to focus on their core business while handling enormous amounts of data, the highly scalable public cloud capacities are suitable. Well-known companies using public clouds or hybrid clouds include:

• Netflix: The streaming service has been using the AWS cloud since 2016 and therefore no longer maintains its own data centres. This step has resulted in significant cost savings as well as an increase in the number of streaming users.
• X (formerly Twitter): The social media platform is in a partnership with Google and transfers large amounts of data to the Google Cloud. In addition to the scalability gained, it was the various attractive cloud features that motivated X to make this decision.
• Lufthansa: The airline decided in 2020 to leverage Google Cloud to improve its work processes. For instance, the planning of aircraft deployment and maintenance is handled via the cloud.

Private cloud

Companies and private users who value maximum autonomy and independence rely on a private cloud environment, which can be implemented both with a local IT environment and via virtualisation off-premises. Companies that offer private and hybrid cloud services are:

• Oracle
• IBM
• VMware
• Hewlett Packard Enterprise
• Amazon Virtual Private Cloud
• Google Virtual Private Cloud
• Ubuntu OpenStack (Open Source)
• Apache CloudStack (Open Source)

Well-known companies or organisations that rely on their own private cloud or hybrid cloud include:

• Walmart: The retail giant has invested several million dollars in its cloud system. Improved data handling aims to boost sales and enhance competitiveness in the relentless e-commerce competition.
• NASA: The American aerospace agency has a cloud data centre called ‘Nebula’, which combines private cloud and open source. NASA employees can, for example, share their research data much more easily with business partners and others.
• UK Ministry of Defence: The UK Ministry of Defence uses a hybrid cloud system to manage sensitive data and ensure secure communications across its operations, improving coordination and security within the military and defense sectors.

What other cloud models are there?

In addition to the private cloud and public cloud, users have a choice between two other cloud models that result from a combination of the two previously presented models:

1. Hybrid Cloud: Combines cloud services from public and private clouds using local data centres and external public cloud services. With the hybrid model, companies can distribute services and applications between private and public clouds. Since public clouds offer especially powerful capacities, the high security of a private cloud can be connected with the performance of public clouds. Costs can also be adjusted to meet requirements through the flexible distribution of workloads.

2. Multi Cloud: Represents the simultaneous use of the same cloud model (either public or private cloud) from different cloud providers. Companies thus use multiple private or public clouds in parallel.

Closely linked to the form of cloud deployment is also the type of services and functions offered within the framework of cloud computing. Here are three main types to distinguish:

1. IaaS: Provides instantly available IT resources and scalable network infrastructures virtually over the internet.
2. PaaS (Platform-as-a-Service): Provides APIs via the cloud or the internet as a developer and computing platform for application developers.
3. SaaS (Software-as-a-Service): Software and IT environments are provided by third-party vendors as a service, either as complete packages or demand-based models.