There has been a lot of talk about private versus public clouds because of data security concerns. A private cloud is a proprietary network or data center that supplies hosted services to a limited number of people. Private clouds generally pose fewer security and privacy risks than public clouds.

What distinguishes private clouds from the average data center is the ability to pay-per-use and scale usage up or down as demand dictates. This scalability is made possible by the pooling of storage resources.

With cost and scalability being two important business issues, private clouds are extremely attractive to many businesses. According to a recent InformationWeek survey, more than half of the business technology professionals interviewed said that “they’re either using private clouds (28%) or planning to do so (30%).”   That said, there is still a lot of hesitation when it comes to implementing a private cloud environment.  With a heavy technology investment needed, businesses quite rightfully are trying to determine whether the long-term savings will be worth the upfront investment.

Forrester Analyst, James Staten, believes that most businesses are not ready for an internal cloud because they “lack the experience and maturity to manage such an environment.”  Staten says that “to be ready, they must first scale operational standardization, automation, and virtualization mountains.”

With automation and consolidation being best practices for running a better, more efficient data center, perhaps preparing for a private cloud will inadvertently help companies optimize their data center?

Software-as-a-service (SaaS) offerings are finished applications that companies rent. SaaS applications are delivered via the Internet and priced based on consumption (number of users or “seats”).  While you cannot modify SaaS applications, it is possible to make small customizations.  Some examples of software-as-a-service are online social media monitoring tools such as ScoutLabs.com and CRM tool Salesforce.com.

The cost to use an SaaS application ranges from $0 to $500 per user per month depending on the application, use, and addition of supplementary modules.

When we talk about the maturity of the various cloud computing offerings, SaaS, which has been around as a technology solution for more than 10 years, is at a higher level of maturing than most other cloud services that have fewer than three years on the market.

According to Forrester, SaaS has become an established software delivery model for certain segments of the market. Forrester survey data shows that 20% of enterprises and small-to-medium size businesses have implemented or are piloting at least one SaaS solution. All major enterprise ISVs have SaaS offerings, and all major SIs are building large SaaS practices.

That said, software-as-a-service still has room for growth.  Not all applications are suited to SaaS delivery, and not even all implementations of SaaS-suited software are appropriate for a SaaS delivery.  SaaS does, however, have the potential to significantly increase corporate efficiencies and productivity.

Platform-as-a-Service (PaaS) refers to software and product development tools hosted on the provider’s infrastructure.  You pay the host for the use of their platform, but may also pay someone else for other software or services.   A good example of PaaS is Google Apps.

According to Forrester Analyst, James Staten, PaaS is a “build-deploy-manage environment.  These cloud services provide a framework and a software system for application developers to create new services and rapidly deploy them on the Internet. They typically support a particular type of programming language or environment and provide cloud-implemented services that the developer can integrate into their application. It’s becoming common to see PaaS offerings designed specifically for the enhanced use of a SaaS service. For example, Force.com is primarily
used to create new applications that directly leverage the Salesforce.com CRM service.”

The biggest challenge with PaaS is how limited it is in terms of applicability. Many PaaS platforms are focused on a particular class of developer or application, which means that applications will not run on other platforms.  The “lock-in” that PaaS provides is therefore a big downside.  According to Staten, PaaS will take 3 – 5 years to reach the next stage of development because “significant function build-outs are still needed, as well as maturity of the platforms and greater enterprise adoption.”

Infrastructure-as-a-Service (IaaS) is often referred to as Utility Computing because it offers a “pay-based-on-what-you-use” model for data storage.  Via IaaS, Cloud Computing enables companies to only pay for the storage capacity that they need and use.  IaaS is, in essence, an on-demand virtual hosting environment.

IaaS is used to deploy Web service, VM- or SOA-based applications to the Internet. Examples of vendors using IaaS are: Amazon, AT&T, GoGrid (ServePath), Rackspace, Savvis, Terremark and Verizon. Estimated cost to implement IaaS starts at $0.10 per CPU hour.

As Forrester Analysts, Jennifer Bélissent and James Staten, state in a recent whitepaper, “despite the overwhelming buzz of cloud computing, few firms worldwide have adopted a pay-per-use, self-service model of computing, based on virtual service at a public service provider.” Adoption varies from region to region; IaaS clouds are local and so are their implications.

Forrester’s data shows that IaaS adoption is slower in North America and Western Europe than in other emerging markets such as Latin America and Asia.  Data security and privacy concerns are certainly top of mind for IT professionals in North America considering cloud computing as an option.

The physical location of the cloud data center is important because of data protection regimes.  Customers need to understand where their data will be transferred, processed and stored.  According to Forrester, “Rather than merely claiming that data is in the cloud, tech vendors must be prepared to identify the location of data and provide location guarantees (at a premium) if required. The implications of local legislation necessitate a greater degree of transparency than that currently offered by some cloud providers.”