3 Myths about Private Cloud Economics Exposed | SUSE Communities

3 Myths about Private Cloud Economics Exposed



There’s one thing that everyone seems to agree on. Cloud computing is here to stay and it’s going to continue growing.  And it’s no secret why businesses are driving this trend. They are looking to reduce costs, drive growth, make their IT more agile and scalable, all while delivering more innovation.

When it comes to cloud computing, it’s not a straight decision about whether to go with a public cloud or private cloud solution.  According to Jonathan Bryce, Executive Director at the OpenStack Foundation, the future is “multi-cloud”.  More and more organizations are using multiple platforms, mixing private and public clouds.  The challenge now is finding the best cloud strategy and the best mix of cloud solutions for your specific business needs.

The best cloud strategy is not just about finding the lowest cost or even about getting the right mix of Capex and Opex.  But it would be naive to think that cost is not an important part of the decision.

And therein lies the problem. There are a lot of myths and misconceptions surrounding the economics of private clouds that make it difficult to weigh up the options.

Let’s take a look at three of them.

Myth #1  Public cloud is always the lowest cost option

There’s no doubt that public clouds can be very cost-effective for many businesses.  They also offer a great way to rebalance Capex and Opex.  However, a recent CPI (Cloud Price Index) study by 451 Research shows that a private cloud can actually deliver a lower TCO (Total Cost of Ownership) than a public cloud with the right capacity utilization and labor efficiency.  Over 400 VMs per engineer and a utilization above 60% were the target numbers in this study.

So public cloud is not always the lowest cost option.

And there are other benefits that often swing the decision in favor of a private cloud. These include keeping in-house control of data and security, delivering on SLAs (Service Level Agreements) and meeting performance requirements.

Myth #2  Open source cloud software will cost more in the long run

I hear this a lot. It always seems like a fake news story that’s playing largely on concerns about a shortage of available IT skills and the perception that open source skills are somehow more expensive than those for proprietary commercial alternatives.

In fact, the opposite appears to be true.  According to the User Survey from the last OpenStack Summit in Barcelona, a whopping 72% said that their organizations chose OpenStack to save money over alternative infrastructure choices.

With its clear global leadership, OpenStack is the open source private cloud of choice for enterprise business and that’s largely because it costs less and still delivers all the agility and innovation you need.

Myth #3  “Free” OpenStack software is cheaper than using a distribution

Free is a relative term.  As OpenStack is an open source cloud platform, you can download the software from OpenStack.org for nothing. But you’ll still need skilled engineers to support it. This means that making OpenStack easy to deploy, manage, maintain and support translates directly into lower overheads and lower costs.

It’s worth noting that according to 451 Research, the value proposition for using an OpenStack distribution writes itself.  You only need to increase cloud management efficiency by as little as 5% and a distribution has paid for itself already.  Frankly, you’d get that level of benefit just from the easier installation and management features of a distribution.

We think that SUSE OpenStack Cloud is the fastest and easiest OpenStack distribution to deploy and manage. You may feel that we’re biased of course, but we have won awards and competitions to back up the claim.


In the end, the right cloud strategy comes down to delivering real value to your business. Each organization will need to do their own cost analysis and decide on the best approach. Many have adopted a mixed cloud strategy already or will be looking to do so in the near future. For these organizations, it makes sense to maximize the utilization of their private cloud to get the best of their Capex investments, while keeping close control of their public cloud usage to minimize additional Opex expenditure.

Click here to learn more about SUSE OpenStack cloud.

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