A private cloud could offer almost all the benefits of a public cloud, but without the attendant security and privacy headaches, said Jim Whitehurst, president and chief executive officer of enterprise open source software vendor Red Hat.
Moreover, if a company is running more than 1,000 servers, it could save money and become more flexible with its processor resources by building an internal cloud computing infrastructure.
"There is a significant amount of value in a cloud infrastructure for a single entity that is running multiple programs and multiple datacenters," Whitehurst said, speaking at the Federal IT on a Budget Forum held this week in Washington, D.C.
"What are the benefit of a public cloud? For most large agencies...or even medium-sized agencies, there is a not a lot of purchasing cost advantage with going to a third-party cloud," Whitehurst said. "The real benefit is getting high utilization of your existing infrastructure and flexibility around that."
At present, Red Hat has more than 50 enterprise customers with private clouds. "They are seeing huge benefits [by] running clouds themselves," Whitehurst said. He mentioned that one customer he spoke with, a chief information officer of a large organization running 25,000 processors, told him that public cloud services such as Amazon.com's would not provide much of a cost advantage to his organization, as his company could obtain servers at almost the same cost as those providers.
To set up a private cloud, an organization would pool all of its servers and offer the processing power to each department. It could enjoy the economies of scale that clouds could provide, and not worry about the privacy and security concerns that dog public cloud providers, according to Whitehurst. It could also sign agreements with other agencies or organizations whose peak processing times are different from its own in order to have extra computing capacity on hand for those periods with the heaviest workloads.
Whitehurst said that today's public cloud offerings are mostly in the "vaporware" stage, meaning there is not much of use for enterprise users, again due to the outstanding security and privacy issues. Building a private cloud, however, will help agencies get prepared for such time when and if public cloud offerings become an alternative.
In April, IT analyst firm McKinsey & Co. released a report that argued that while small- and medium-sized organizations could save money by using public cloud services, large organizations could actually save money by keeping their processing needs in-house.
Federal Computer Week staff writer Doug Beizer contributed to this report.