Why Private Clouds May See a Resurgence in 2024

Expect trends such as AI and the economic turbulence that is affecting organizations' spending to drive an increased interest in private cloud.

Christopher Tozzi, Technology analyst

February 2, 2024

5 Min Read
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Private cloud — meaning a cloud environment built and used by a single company, as opposed to the shared infrastructure available in public clouds — may not be dead, but it has lost much of its luster. Most of the excitement in the cloud computing ecosystem today centers on public cloud platforms like Amazon Web Services and Microsoft Azure, not private cloud platforms like OpenStack.

However, there are reasons to expect private clouds to make something of a comeback. That's not to say that we're likely to see a massive migration of workloads from public to private clouds; we won't. But I do think certain developments will make private cloud infrastructure more attractive to more businesses than it has been in recent years.

Specifically, expect the following trends to drive increased interest in private cloud.

1. AI Training Can Benefit from Private Clouds

To deploy generative AI models, which have seen a massive surge in popularity, businesses need to train those models. And to perform AI training efficiently, they need infrastructure that is tailored for AI.

To be sure, it's possible to obtain AI-friendly infrastructure from public clouds, which offer solutions, like GPU-as-a-service, that cater to AI training needs. Using the public cloud for this purpose may make sense for organizations that need to perform one-off training.

Related:How to Build a Personal Cloud Server for Private File Storage at Home

But for ongoing or recurring training needs, private clouds are likely to deliver a better overall tradeoff between cost and performance. AI-focused public cloud infrastructure tends to be expensive, and if you need to use that type of infrastructure over the long term, it will probably be cheaper to purchase the infrastructure outright and deploy it as part of a private cloud.

In addition, private clouds offer more control over infrastructure configuration. That's an advantage in situations where businesses want to use specific types of hardware for AI training that they can't obtain from public cloud providers.

Last but not least, private clouds offer some data privacy benefits in the context of AI training. With a private cloud, you don't have to upload potentially sensitive training data to a third-party infrastructure platform.

2. Private Clouds May Save Money

Economically, the world of tech is going through a tough period. The boom years are over, and businesses that could once count on cheap borrowing costs or seemingly unlimited venture capital to fund their infrastructure needs now face harsher financial realities and greater pressure to save money.

Related:Cloud Computing Predictions 2024: What to Expect From FinOps, AI

Private clouds can help on this front by enabling lower total cost of ownership, at least when they are designed and used effectively. Public clouds may be attractive financially in the sense that they allow companies to pay only for the infrastructure they consume, but in the long run, businesses with significant infrastructure needs are likely to find that a private cloud delivers a lower overall cost.

On balance, it's worth noting that high interest rates may make it difficult for some companies to justify the expense of buying new servers to power a private cloud. But those that can bear the acquisition cost, or that already own sufficient infrastructure to run their own cloud, may opt to do so as a strategy for keeping infrastructure costs in check during turbulent economic times.

3. Simpler Private Cloud Tools and Infrastructure Options

Once upon a time, operating a private cloud required setting up and managing a complex platform like OpenStack. Even for a team seasoned in private cloud management, the process demanded much more effort than spinning up virtual infrastructure in a public cloud.

On top of that, running a private cloud traditionally required buying on-prem servers and dealing with all of the headaches that come with managing physical hardware.

Today, however, the learning curve for creating and managing private clouds has become less steep. Newer types of private cloud tooling solutions, like Harvester, provide options for operating private clouds that don't require as much expertise and effort as OpenStack.

In addition, bare-metal-as-a-service (BMaaS) solutions make it possible to deploy private clouds using infrastructure that someone else manages. With BMaaS, businesses don't have to acquire dozens or hundreds of their own servers to run a private cloud and ensure that their IT department has the capacity to manage them. Nor do they have to budget for the capital expense of purchasing the hardware. They can outsource all of the above to BMaaS providers.


In short, the AI trend, combined with economic turbulence, has given businesses new reasons to consider investing in private clouds. Meanwhile, creating and managing private clouds have become considerably easier.

These changes aren't likely to make 2024 the year of the private cloud; public clouds will almost certainly continue to dominate. But 2024 may at least see an uptick — perhaps even a resurgence — in private cloud adoption, reversing a longstanding trend in the opposite direction.

About the Author(s)

Christopher Tozzi

Technology analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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