Private cloud explained: definition and benefits

A private cloud is a dedicated cloud computing environment for a single company. It’s a secure internal cloud storage system, a corporate or internal cloud.

A company typically controls the cloud on-premises, where it can restrict access. It’s a proprietary virtualization of the entire IT infrastructure that teams can access via a self-service portal.

This guide explains all you need to know about private cloud storage, including its pros and cons. 

What is a private cloud?

Private cloud infrastructure aggregates data and dedicated resources in a centralized environment. A company can build a Data Center using software-defined networking and virtual machines

Companies can secure all their data with a virtual private cloud. That’s because only those within the company have access. They can also limit access to those outside the company, such as contractors. That way, they have levels of security that protect their most sensitive data.

Companies can still reap the benefits of a public cloud with a private one. They allow scalability and include pay-as-you-go services but offer added security and control.

How does a private cloud work?

Cloud computing requires virtualizing resources, and private clouds are no different. With virtualization, you make a virtual version of your computing hardware with specialized software. 

In a private cloud, virtualization allows you to share resources or applications among your entire company simultaneously. Virtual environments also allow for storage, memory, and networking

A host machine runs the virtual environment, requiring some hardware to build and upkeep the private cloud.

Types of private clouds

A private cloud is one of three cloud deployment methods companies can employ. The other two are: 

  • Public cloud: A third-party provider maintains and owns all the resources across multiple companies on the internet.  
  • Hybrid cloud combines a public and private cloud, where storage is in-house and with a cloud provider. 

But when it comes to a private cloud, you have a couple more options: 

  • On-premise private clouds: The company headquarters houses all resources and host machines. The IT team maintains the servers and virtual environments. 
  • Hosted private clouds: Third-party cloud providers like Atlassian's cloud Data Center offer private cloud solutions. Unlike a public cloud, multiple companies don’t have access to servers. The provider takes care of all the upkeep. 

Explore Atlassian’s cloud roadmap to learn more.

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Benefits of a private cloud

Having a private cloud makes deployment faster since you control everything in-house. You aren’t using a public cloud where other companies suck up bandwidth. Other benefits of a private cloud include the following:

Enhanced security and control

Private cloud storage employs organizations with heightened control over data, simplifying adherence to stringent security and compliance requirements. Additionally, the isolation, or exclusive use of resources, in private clouds mitigates the risk of unauthorized access and data breaches, fostering a more secure environment.

Customization and tailoring

Organizations wield the ability to meticulously design private cloud infrastructures, ensuring they align precisely with unique requirements for optimal performance and resource allocation. Additionally, private clouds facilitate a smooth integration with existing IT infrastructure and legacy systems, facilitating a smooth transition into cloud computing.


While lacking the instant scalability of public counterparts, private clouds offer a controlled scalability model, allowing organizations to adjust resources to meet evolving needs adeptly.

Cost efficiency

Suited for workflows with steady resource demands, private clouds may present a more cost-effective solution over the long term than public alternatives. Not only that, but you can also reduce costs because you won’t be paying out to a public cloud. You can also use a private cloud as a selling point to your consumers, assuring their data won’t fall prey to a breach.

Drawbacks of a private cloud

Private clouds have disadvantages, depending on your company’s needs. For instance, new equipment, software licenses, and IT infrastructure require high startup costs. There are also maintenance costs, whether your IT team or an outside provider handles them. 

Another drawback is on-demand scalability. Only when the infrastructure is in place will resources be entirely available. This means there will be ramp-up time before your company can deploy. Then, your IT team must monitor the cloud’s capacity and ensure resource use doesn’t overload the system.

When to use a private cloud

Companies with predictable resource demands are ideal for private cloud use. That’s because they know how teams will use resources. And that makes it easier to justify the upfront costs. 

Use a private cloud when you want better security and control over data. Public cloud vendors have a slight risk of security lapses and data breaches. Financial, healthcare, legal, and government services benefit the most from private clouds.

How to manage a private cloud

A private cloud isn’t something you set and forget. It requires upkeep from skilled IT staff who must constantly monitor the use of resources and who is accessing them. Doing so allows IT to check the system’s performance and prevent or fix any potential problems. 

Several essential tools, such as Open DevOps, help you manage your private cloud effectively.

There are many DevOps benefits. Among them is a cloud infrastructure that provides technical and business support for Agile teams. Other benefits include reduced costs, increased scalability, better performance, improved execution speed, and greater security. 

You can easily manage and integrate your private cloud with other software with the many DevOps features and DevOps integrations. Learn all about the best practices for DevOps in our comprehensive guide. Also, keep current on best practices for Data Center roadmap management.

Secure your private data with Open DevOps

Managing your private data is more straightforward with Open DevOps. Cloud providers share system health metrics, including application and server CPU, memory, request rate, error rate, and average response times.

Connect all your tools from end to end so you can monitor every part of your DevOps pipeline and tech stack of DevOps tools. Practicing DevOps allows for comprehensive monitoring so your team can address issues and incidents faster.

Private cloud: Frequently asked questions

What is the difference between a private cloud and a public cloud?

The first difference is access. Multiple companies have continuous access to virtualized resources in a public cloud. In a private cloud, one company shares those resources internally. 

Another difference is security. Public clouds are vulnerable and best suited to less confidential data. Private clouds provide more security and control over sensitive information.

What industries benefit the most from private clouds?

Industries with legal requirements to keep data private benefit the most from private clouds. This includes the finance sector, healthcare, and government agencies. However, enterprise businesses can also reap the benefits of a private cloud.  

A private cloud provides a secure environment if your company handles sensitive tasks.

How is data security ensured in a private cloud?

A variety of security measures and protocols keep data secure. These include encryption, access control, and regular monitoring. Private clouds often employ firewalls as an additional layer of security and use two-factor authentication to grant access.

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