Identifying Prospects for Private Cloud Services

Zane Long**Editor’s Note: This article is an excerpt from the Digital Issue, “ Profiting From Private Cloud Services ,” which is available for download from Channel Partners Cloud Insights .**

By Zane Long

Without a doubt, private cloud deployments are a popular option for businesses due to the perception of improved security and control over company data. A private cloud is a form of cloud computing where service access is limited or the customer has some control/ownership of the service implementation; it can be run locally or hosted by a third party.

Demand for private clouds is stronger among multinationals and in the finance, health care and government sectors, which have a heavy burden of compliance, security and performance that must deliver immediate ROI for a private infrastructure deployment.

There are several characteristics that are leading indicators of what type of cloud architecture a business should employ. Discovery questions you should ask your prospect when considering a private cloud infrastructure and/or service may include:

Is the industry heavily regulated? Industry regulations and certifications like SOX, HIPAA, PCI, etc., or business requirements within company policies can drive IT policies that can affect basic topology of the service, location of data and overall communication patterns as well as privacy and compliance issues. For instance, a company in the health care sector considering cloud solutions now has the requirement of securing a Business Associate Agreement (BAA) with its cloud provider. Such agreements must specify which party carries the burden of compliance in the case of data breaches and noncompliance penalties. As a result, such requirements have a direct impact on the choice between a private cloud (where access and data is much more secure) and a public cloud (where network and data is much less secure).

What are the time and operational implications involved in moving to a private or public cloud? Choosing between public versus private clouds presents businesses with another dilemma: While private clouds deliver key benefits of cloud computing such as enhanced data security, easier corporate governance and improved reliability, organizations still need to purchase, build and manage this private infrastructure, so they do not benefit from lower expenses and ease of management that a public cloud deployment can bring. According to Forrester’s Foresights Hardware Survey, Q3 2013, 46 percent of enterprises are prioritizing investments in private clouds in 2013, and while slightly more than half plan to build a private cloud in their down data center, more than 25 percent said they prefer to rent one. A third-party private cloud offering would share data center facilities and equipment (from a pool of available resources) but be isolated by a standard VPN, firewalls, gateway and authentication servers or encryption, for instance.

How agile do the businesses need to be? An obvious benefit of private cloud computing  whether outsourced or not  is improved IT agility, which translates to better business agility. A private cloud deployment helps the internal customer IT team do more faster, ramp up and down, beat the competition and grow their business quickly. This produces value for companies with large IT organizations that historically have been branded with a label of “technology barrier” versus a “business enabler.”

Is the company large or small does size matter? Large corporate-based financial services firms are one of the subsegments leading the way as an adopter of the private cloud approach due to the benefit of control over resources and security of data and access. It is well known that early adopters such as J.P. Morgan Chase and Fidelity are seeing larger savings and greater benefits than initially anticipated with private cloud deployments.

For clients that have long development timeframes, capital funds available for investment and sufficient in-house IT skills, a private cloud easily can be implemented in-house. However, the resources, capital and skills sets exist in only a minority of segments and industries today. Most customers have a deficiency in at least one of these areas  time, funding and embedded IT skills sets  making the deployment of private cloud infrastructure a more complex issue.

Additionally, these same factors make private clouds a challenge for small to medium enterprises. Where a true private cloud solution is not financially attractive, another alternative would be to explore a combination of private and public cloud infrastructure, known as a hybrid cloud. As an example, companies may choose to house some applications and data such as company financial records in a private cloud (on or off premises) and also house applications and data with less sensitive information, such as Salesforce used for prospect data, in a public cloud infrastructure (off premises). This hybrid cloud is likely to provide the same benefit without higher cost and commitment.

Oftentimes a hybrid solution scaled to address the ability to mix the two environments  public and private  can provide the utmost flexibility. As a business’s size and IT operations grow in complexity or where customers need dedicated resources, they have the ability to move from a public cloud into a private cloud, where the customer controls the virtual machines running on dedicated infrastructure that is owned and managed by the cloud service provider.

Engagement tactics for cloud remain grounded in the same principles regardless of public or private configurations. Partners should focus on the business outcomes instead of on specific IT solutions. Since private cloud opportunities will be marketed toward the specific needs of larger consumers, who need dedicated and guaranteed resources, all options need to be examined, including a public-private hybrid cloud, to ensure the customer’s specific needs are fully defined and met up front.

Zane Long is president of indirect sales at


, a cloud and communications service provider serving small and medium businesses. Long joined Cbeyond in 2011. He has more than 20 years’ experience in the telecommunications industry at companies such as GENBAND, Level 3 Communications, Focal Communications, Broadwing and GTE.






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