New to cloud terminology? Our IaaS, PaaS, SaaS guide covers the basics you’ll need.
“We need a private cloud for security reasons.”
I hear this regularly from business owners who’ve been told—often by someone selling them something—that public cloud isn’t secure enough for their data. In most cases, this is wrong.
This guide explains what private and public cloud actually mean, when each makes sense, and how to avoid spending money on private infrastructure you don’t need.
The Basics: What Do These Terms Mean?
Public Cloud
Public cloud means renting computing resources from a provider like AWS, Azure, or Google Cloud. The underlying hardware is shared among many customers, but your data and systems are logically isolated—other customers can’t access your stuff.
Think of it like an apartment building. You share the building’s structure, utilities, and common areas with other tenants, but your apartment is yours. Proper locks (security controls) keep others out.
Key characteristics:
- Pay for what you use (operational expense, not capital)
- Provider handles hardware, power, cooling, physical security
- Resources available on-demand, scale up or down as needed
- Shared infrastructure, logically isolated per customer
Private Cloud
Private cloud means dedicated infrastructure used only by your organisation. This could be:
- On-premises: Servers in your own data centre or office
- Hosted private cloud: Dedicated hardware in a provider’s data centre, exclusively for you
- Virtual private cloud (VPC): Logically isolated section of public cloud (technically still public cloud, but feels private)
Think of it like owning a house. Everything is yours—more control, but also more responsibility for maintenance.
Key characteristics:
- You control (or own) the underlying infrastructure
- Higher upfront costs, more predictable ongoing costs at scale
- You’re responsible for capacity planning
- Maximum control over configuration and security
Hybrid Cloud
Hybrid cloud combines both—some workloads on private infrastructure, some on public cloud. This is increasingly common, especially during cloud migration or for organisations with specific compliance requirements for certain data.
The Real Differences
| Factor | Public Cloud | Private Cloud |
|---|---|---|
| Cost model | Pay-as-you-go (OpEx) | Capital investment + ongoing costs |
| Upfront cost | None | High (hardware, setup, staff) |
| Scalability | Instant, virtually unlimited | Limited by hardware purchased |
| Maintenance | Provider handles it | You handle it (or pay someone to) |
| Control | Limited to what provider allows | Complete |
| Physical security | Provider’s responsibility | Your responsibility |
| Expertise needed | Less (provider abstracts complexity) | More (you manage everything) |
| Break-even | Better for variable/smaller workloads | Better at large scale (100s of servers) |
Decision in 60 seconds:
- SMB with variable workloads → Public cloud
- Large enterprise, hundreds of servers, predictable load → Private cloud may be cost-effective
- Genuine regulatory requirement → Investigate specific rules first; often VPC satisfies them
- Someone says “private is more secure” without specifics → Treat it as a red flag
The Security Question
Let’s address this directly: public cloud is not inherently less secure than private cloud.
Why Public Cloud Security Is Strong
Major cloud providers spend more on security than almost any individual organisation could:
- AWS employs thousands of security professionals and holds dozens of compliance certifications
- Physical security at cloud data centres exceeds what most companies achieve on-premises
- Continuous investment in security tools, monitoring, and threat response
- Shared responsibility model means the provider handles infrastructure security while you handle your application and data
Why Private Cloud Isn’t Automatically Secure
Having your own infrastructure doesn’t make it secure:
- You’re responsible for everything: patching, monitoring, access controls, physical security
- Smaller teams mean fewer specialists and more single points of failure
- Less investment in security tools and processes compared to major providers
- Attack surface still exists—private doesn’t mean invisible
The Real Security Question
Security depends on implementation, not deployment model. The question isn’t “public vs private” but rather:
- Are access controls properly configured?
- Is data encrypted appropriately?
- Are systems patched and monitored?
- Do you have incident response capabilities?
You can achieve excellent security on public cloud or terrible security on private cloud (and vice versa). The model doesn’t determine the outcome.
Worth noting: most cloud security incidents are misconfiguration, not platform vulnerabilities. A properly configured public cloud environment is secure; a poorly configured one isn’t.
When Public Cloud Makes Sense
Public cloud is the right choice for most small and medium businesses. Consider it when:
You Want to Avoid Capital Expenditure
No servers to buy, no data centre to maintain. Convert infrastructure from a large upfront investment to a predictable monthly expense.
Your Workloads Are Variable
Traffic spikes during business hours? Seasonal demand? Marketing campaign launching? Public cloud scales instantly. You don’t pay for servers sitting idle at 3am.
You Don’t Have (or Want) Infrastructure Staff
Managing servers, patching operating systems, replacing failed hardware—these require expertise. Public cloud abstracts much of this away.
You Need Speed
Spinning up new servers in public cloud takes minutes. Ordering, configuring, and deploying physical hardware takes weeks.
You’re a Startup or Growing Business
You don’t know exactly what you’ll need. Public cloud lets you start small, experiment, and scale what works without committing to hardware you might not need.
When Private Cloud Makes Sense
Private cloud is right in specific situations—but they’re less common than vendors suggest:
Genuine Regulatory Requirements
Some regulations in specific industries genuinely require dedicated infrastructure. This is rarer than commonly claimed—most regulations (including GDPR) can be satisfied on properly configured public cloud.
Ask specifically: “Which regulation requires private cloud, and which specific provision mandates it?” If your advisor can’t cite the specific requirement, the need might be assumed rather than real.
Predictable, Large-Scale Workloads
If you’re running 200+ servers with stable, predictable utilisation, owning hardware can become cheaper than renting. The economics flip at scale—but most small and medium businesses don’t operate at this scale.
Legacy Systems That Can’t Migrate
Some older applications genuinely can’t run on public cloud due to technical requirements (specific hardware, licensing restrictions, architectural limitations). Private cloud or hybrid becomes necessary.
Extreme Data Sensitivity
Some organisations (defence contractors, certain government agencies) have data sensitivity requirements that genuinely exceed what public cloud offers. This is rare for commercial businesses.
The Cost Reality
Public Cloud Costs
Typical small business (simple web application):
- €150-400/month for compute, database, storage
- No capital expense
- Scales with usage
- Staff time: minimal (a few hours/month for a managed setup)
Private Cloud Costs
On-premises private cloud (small scale):
- Hardware: €15,000-50,000 upfront for basic setup
- Software licensing: €5,000-20,000/year
- Data centre/hosting: €500-2,000/month
- Staff: At least 0.5 FTE to manage (~€30,000+/year)
- Refresh cycle: Replace hardware every 4-5 years
Break-even point: Private cloud typically only becomes cost-effective with 100+ servers running at high, predictable utilisation. For most SMBs, this threshold is never reached.
Hosted Private Cloud
Some providers offer “private cloud as a service”—dedicated hardware managed by a provider. This splits the difference: more control than public cloud, less operational burden than on-premises.
Typical cost: 2-3x public cloud pricing for equivalent resources. Sometimes worth it for specific compliance scenarios.
Virtual Private Cloud: The Middle Ground
Virtual Private Cloud (VPC) deserves special mention because it confuses many people.
A VPC is a logically isolated section of public cloud. You get:
- Your own private network space
- Control over IP addressing and subnets
- Your own firewall rules and access controls
- Traffic isolation from other cloud customers
But it’s still running on shared public cloud infrastructure.
Why it matters: VPCs give you most of the isolation benefits people associate with “private cloud” while retaining public cloud’s cost and flexibility advantages. Every major cloud provider includes VPC capabilities at no extra cost.
For most organisations, VPC on public cloud satisfies security and compliance requirements without the cost of true private infrastructure.
What Each Persona Should Do
For Non-Technical Founders
Unless someone can cite a specific regulation that mandates private cloud, you almost certainly don’t need it. Public cloud (AWS, Azure, Google Cloud) is secure, compliant, and far more cost-effective for businesses your size.
Questions to ask if someone recommends private cloud:
- “Which specific regulation requires this? Can you show me the relevant section?”
- “Would a Virtual Private Cloud (VPC) on public cloud satisfy the requirement?”
- “What’s the cost difference between private and public for our situation?”
Red flags: “Private is just more secure” without specifics, or inability to cite requirements.
For Technical Decision-Makers
Your framework:
- Audit compliance requirements. Get specific regulations in writing. Most requirements that sound like they need private cloud can be satisfied with properly configured public cloud + VPC.
- Calculate honest TCO. Include hardware, licensing, staff time, refresh cycles. Public cloud pricing includes HA, DR infrastructure, and security investment.
- Consider VPC first. Network isolation within public cloud satisfies most “private” requirements at a fraction of the cost.
- Hybrid only if needed. If specific workloads genuinely require private infrastructure, keep those private and run everything else on public.
Common Misconceptions
“Our data is too sensitive for public cloud”
Unless you’re handling classified government data or equivalent, major cloud providers can secure your data appropriately. Banks, healthcare organisations, and government agencies use public cloud. Configuration matters more than deployment model.
“We need private cloud for GDPR”
GDPR requires appropriate data protection measures. It doesn’t mandate private cloud. All major providers offer GDPR-compliant configurations with EU data centres.
“Private cloud gives us more control”
True, but is that control valuable? More control means more responsibility. For most businesses, the control public cloud provides is sufficient, and additional control isn’t worth the cost.
“Public cloud isn’t reliable enough”
Major cloud providers achieve 99.9%+ uptime. Their availability exceeds what most private data centres achieve. Yes, outages happen, but they’re rare and well-communicated.
Key Takeaways
For most small and medium businesses, public cloud is the right choice. It’s more cost-effective, more flexible, and—when properly configured—just as secure as private alternatives.
Private cloud makes sense in specific situations: genuine regulatory requirements, very large and predictable workloads, or legacy systems that can’t migrate. These situations are less common than vendors suggest.
Virtual Private Cloud (VPC) often satisfies “private cloud” requirements at public cloud prices. Investigate this option before committing to true private infrastructure.
Security depends on implementation, not deployment model. Don’t assume private means secure or public means vulnerable.
Related Reading
- IaaS, PaaS, SaaS Explained — Understanding cloud service models (pillar article)
- Top IaaS Providers Compared — AWS vs Azure vs Google Cloud
- Cloud Migration Checklist — Planning a move to cloud
- The Hidden Costs of Cloud — Managing cloud spending
Need Help Deciding?
If you’ve been told you need private cloud and aren’t sure whether that’s accurate, book a consultation. I’ll review your requirements objectively and tell you what you actually need—not what’s most expensive.
