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Public Vs. Private Cloud-What’s the Difference?

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Written by Laura Schomaker

October 9, 2020

As you explore your options with ERP and other cloud-based solutions, you may see a good deal of discussion around public vs private cloud. What are these categories of cloud and what are their differences? How can these differences impact your business?

Understanding the Cloud

Before we delineate the differences in public vs private cloud, first a quick summary of what cloud itself is and how it works. Any cloud involves two things: a server hosting data and programs and then an internet browser accessing those data and programs. Imagine the Word software you might have installed on your laptop. That software is installed on your computer and you access it there. If your Word software were cloud-based, you would access it via the internet and the software would be hosted on a server, an entity external to your computer.


The advent of the cloud as a concept brought a lot of advantages to the business world. For one, if you need to access that report you’ve been working on, you can reach it via any internet-connected device. You can also collaborate more effectively on projects with multiple stakeholders at your company; each person accesses the project in the cloud from their individual workspaces. The cloud, in essence, is a shared workspace.


Private Cloud

A company running a private cloud has it all to itself. The infrastructure is typically hosted on premise on a company’s own server. This requires a sizable investment in on-premise IT staff to maintain the hardware and data but it is by far the most secure option for companies that need or want as much security and control as possible over their data. A private cloud can be hosted off-site by a partner organization, somewhat ameliorating the cost of private cloud while still gleaning its benefits.

Public Cloud

The public cloud is available to multiple entities and the general public— a shared resource. The infrastructure for a public cloud is provided by a large service provider, typically. Think Microsoft or Amazon. These companies own and maintain the servers that power the public cloud; as a result, any company using the cloud has limited control over key items such as security or system configuration. Public cloud is, however, a much more affordable option than private. Think of it as renting an apartment as opposed to purchasing a large home of your own.

Which works for you?

Private cloud is the best option for any company with security concerns. For example, a company which handles strictly regulated data on a regular basis would likely prefer a private cloud over a public one. Private cloud also allows you to maintain complete control of system configurations, ensuring that your cloud works more dynamically for your business needs.

Public is your option if your business needs are such that you can work with a one-size-fits-all option. It’s also, of course, the money saver between the two options and will not require a deep IT bench at your company or significant upfront investment. Public cloud is also often structured on a pay-as-you-go model, so that you can scale costs as your needs evolve over time.

Some popular alternatives to both include hybrid cloud and community cloud. Hybrid offers some of the enhanced control and security of private cloud with some of the cost saving benefits of public. Community is newer to the scene. Think of it as a co-op. Multiple companies provision and share a cloud as a collective.

What is your experience with the cloud at your business? Let us know in the comments below. And if you want to learn more about how either public or private cloud can transform your business, start exploring your options when it comes to cloud-based solutions.

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