Private vs Public Cloud: What’s the Difference?

Updated Dec 6, 2022.
Private vs Public Cloud - What's the Difference

If you own a business that deals with databases, cloud computing is one of the terms you need to know or are already familiar with.

As businesses evolve from the use of traditional means of documentation and information storage to online means as the primary source, cloud computing is growing and becoming increasingly popular.

If you want to switch your business to cloud computing, you still have to pick between two major cloud deployment models (private cloud and public cloud).

In this article, you will learn about the differences between public cloud and private cloud, the pros and cons of each, and which is suitable for your needs.

Let's get started.

What is a Private Cloud?

A private cloud is simply defined as a cloud environment managed by the end-user. It is also known as an internal or enterprise cloud. Private cloud refers to a cloud deployment where the whole cloud infrastructure resides with and is managed by a company.

Cloud environments are hosted on the company’s intranet or hosted data center. All of the data is protected behind the company’s firewall. With all control in the hands of the company, running a private cloud makes it easier to customize server resources to any length that meets the company’s specific IT requirements.

On-premises private clouds also serve as great options for companies that have an already existing server infrastructure or expensive data centers. There is no need to spend extra on purchasing infrastructure so that a company maintains complete control over servers or an increased level of security.

Nonetheless, drawbacks exist, with the major one being the level of server management that comes with it. Private clouds are virtualized and run by the company or institution making use of them. The management, maintenance, and updating of data centers are the responsibility of the user. Consequently, when servers are required to be replaced, more expensive costs are accrued.

Due to the responsibilities accompanying private clouds and their benefits, this form of deployment is often used by big organizations. They include government agencies, financial institutions, and other mid to large-sized organizations. A private cloud is suitable for organizations that have enough administrative resources and critically require complete control over all business operations. Users are typically financially buoyant enough to manage servers that require high-performing server environments and the highest level of data security possible.

Private cloud servers are dedicated server environments managed, accessed, and enjoyed by a single user. With on-premises clouds, the responsibility for maintenance and security falls on the user. Since there is no sharing of infrastructure, there is equally zero latency for local applications and users as well as no multi-tenancy issues.

Private Cloud Infographic
Source: Atlantic

What is a Public Cloud?

Public clouds are server environments where the cloud resources are operated by a third-party cloud service provider. It serves as the most common form of cloud computing deployment where all hardware, software, and other supporting infrastructure are owned and managed by the cloud provider, and access to server resources is facilitated over the internet. Resources vary by provider but may include storage capabilities, applications, virtual machines, servers, or CPU, among others.

In a public cloud, server resources are mostly shared with other users or, rather, “cloud tenants”. Users make use of the same pool of cloud servers and fenced cloud resources provided by this third-party vendor. Fenced cloud resources refer to the splitting of cloud resources on a server or pool of servers amongst different users. With fenced resources, the resource usage of one user does not affect the experience of other users.

Public clouds take the responsibility for the management of the cloud infrastructure from the users as they are hosted and managed by a public cloud provider. Users only purchase access to cloud servers from vendors and typically use these servers for data backup and archival purposes.

Shared server resources are not the only form of public clouds. Dedicated public clouds exist where customers enjoy dedicated access to and use of servers that are owned by third-party vendors. All server resources are used by a single user. This provides more security and performance capabilities than shared public clouds.

The management of public clouds is in the hands of a third-party service provider. Some of the popular public cloud providers in the market today include Alibaba Cloud, Amazon Web Services (AWS), Google Cloud, IBM Cloud, and Microsoft Azure, among others.

Public Cloud Infographic
Source: PhoenixNAP

Pros and Cons of Using a Public Cloud

Using a public cloud has many benefits for you but it also has its cons. Here are the different benefits you stand to enjoy and drawbacks you have to deal with when making use of public clouds.

Pros of Public Cloud

1. High Flexibility And Reliability

The major benefit of using public clouds is the very high level of scalability you enjoy when compared to private cloud servers. Before cloud servers were available for use, companies making use of on-premises deployments needed to buy more server infrastructures.

These companies had to buy more server resources than needed. Even when a spike in resource usage is only expected once in some years, an extra on-premises server is required to be on stand-by. A situation like this only translates to more servers than required.

Public cloud servers offer a solution to this. Cloud vendors run multiple pools of servers located in different data centers. Through resource pooling, users complement their existing server resources with extra resources from other servers in the resource pool when needed. A temporary spike in resource use only requires a temporary deployment of extra server resources. Also, when these resources are not needed anymore, they are scaled down to the exact requirement.

This level of scalability also translates to a more seamless infrastructure expansion for growing businesses. Cloud vendors offer different levels of cloud server and computing services. Businesses can easily migrate from one to another as their operations grow.

The existence of multiple data centers also means you enjoy high uptime with more reliable servers. Where a cloud server goes down or an unfortunate event occurs at one data center, other servers from other data centers are always available as backup at no extra cost.

2. Reduced Costs And Expenses

Public clouds are cost-effective. Opting for a public cloud server means little to no capital investments in on-premises server infrastructure and reduced IT operating costs.

You run your many types of cloud computing operations without having to commit to settling expenses for purchasing and setting up a physical station. Also, you do not have to worry about the maintenance of servers and software.

With outsourced cloud computing services, huge expenses are not required to enjoy the services of specialized and experienced IT experts. The wage budget of a company is kept low.

Public clouds leave these extra costs to the vendor to handle. Prices are set to be considerably low as servers are shared amongst multitudes of customers. A user only has to subscribe for access to the servers.

The whole pricing structure of public cloud servers gets even more cost-effective with the existence of a Pay-As-You-Go scheme. Users only pay for the number of server resources they make use of and, as a result, never spend more than required.

Businesses, especially the small and medium-sized, maintain tight control over expenses and only pay for exactly what they need. This benefit is not offered by public cloud servers. With private cloud servers, the whole financial responsibility in purchasing and maintaining servers is on the user.

3. Easy Server Setup

With public clouds, setting up servers for use can be completed within a few hours. Cloud vendors already have the infrastructure and virtualized servers in place. All you need to do is purchase access to the cloud servers, get them deployed and remotely configured for you over the internet. For more customized deployments, your IT team also gets the option of configuring servers through online web portals.

4. Reduced Server Management

Public clouds involve outsourcing the management of important business features. It creates more time and more available manpower to focus on other areas of your business. Cloud vendors take over the whole responsibility of managing, maintaining, and updating cloud servers. All you need to do is to keep on paying for cloud services.

Some of the other benefits of using public clouds include improved data gathering and analysis ability, easy global deployment of services, and, to some extent, security. Security becomes an advantage for small and medium scale businesses or companies that do not have the resources to implement strong and sustainable cloud security measures.

Cons of Public Cloud

1. Security and Compliance Risks

The security and compliance risks involved in dealing with public servers are its major disadvantages. Multi-tenancy involves different users sharing the same server environment. Although data breaches are very rare, this shared server environment means that unauthorized access or security negligence does not have to be from your side before security risks to your data surface.

Multitenancy and the outsourcing of server management to third-party services, in general, may also prove to form compliance breaches in certain industries. Companies and industries dealing with the fragile information of customers may be limited by specific standards. These standards are set by regulatory bodies to safeguard customer data and cover every service rendered by these companies. Outsourcing server management is difficult with these standards in place.

Thankfully, regulatory bodies like ISO, HIPAA, and GDPR, among others, present certificates to cloud providers that are deemed to provide sufficient levels of data security and reliability. Possession of these certificates often allows companies in these restricted industries to make use of public clouds.

2. Vendor Lock-in

Vendor lock-in is a situation where a customer or user is unable to migrate data from one cloud provider to another cloud provider. It is a measure taken by vendors to keep customers and prevent them from migrating to rival vendors.

Although a lot of top cloud providers allow users to migrate from their services upon the payment of a fee, vendor lock-in remains a factor that a lot of users are wary about. Where it is in place, it hinders the computing operations of a company when there are better cloud services in the future.

Alongside these top two major disadvantages of using public clouds, there are others. They include:

  • Lack of sufficient technical support from the vendor
  • Incompatibility of applications with virtualized servers
  • Lack of extensive customization
  • The company’s lack of knowledge of the vendor’s back-end processes.

Understanding Critical Terminology


A multi-cloud is simply the combined use of two or more public clouds or private clouds. It is a cloud environment where more than one server from different providers or administrators is made use of.

For instance, a multi-cloud exists where a company uses Azure, Amazon Web Services (AWS), and Google Cloud Platform at the same time. These different cloud services may be used separately for collaboration and office productivity functions, exchange and database servers, and for hosting virtual machines or newly refactored code running in containers.

Multi-cloud does not only involve two or more public clouds. It is a term that also covers the coexistence of two or more private clouds. The main definitive element is, however, the existence of multiple but similarly-deployed cloud servers from multiple cloud administrators. For example, a multi-cloud exists in a private setting where a department within a company procures its own cloud even when the company has its own general private cloud environment.

A multi-cloud setting allows a company to seamlessly migrate cloud computing workloads from one cloud provider or administrator to another with no impact on user performance or uptime. It allows you to leverage the best platform for that particular operation.

Hybrid Cloud

As opposed to multi-clouds, hybrid clouds benefits are that they include multiple cloud servers from different deployments. It is the environment that includes both private and public clouds.

Hybrid Cloud By the Numbers
Source: IBM

A hybrid cloud also refers to a mixed cloud computing environment additionally made up of physical on-premises infrastructure. The hybrid cloud model allows enterprises to deploy computing workloads in distinct cloud environments. You can shuffle between them as computing needs and costs change, ensuring greater flexibility in both costs and operations.

The main difference between multi-cloud and hybrid cloud is in the deployments involved. With multi-clouds, multiple cloud servers with similar deployments are existent in the cloud environment (i.e. public cloud + public cloud or private cloud + private cloud). With hybrid clouds, different deployments are involved (i.e. public cloud + private cloud).

Common Misconceptions of Hybride Cloud
Source: PhoenixNAP


Multi-tenancy is any computing architecture in which a single instance or element of a software application serves multiple customers. When it comes to cloud computing, multi-tenancy is where multiple users or customers share the same cloud server resources provided by a cloud vendor.

These server resources are obtained from the same pool of servers, however, server resources are fenced. Multiple individuals use the same resources, they are not affected by each other, but and their data is kept separate.

Multitenant architecture is a major feature in many IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and cloud ERP software or SaaS (Software as a Service) or cloud computing environments. It helps to make cloud services more affordable for regular internet users.

 Single Tenant vs Multi Tenant
Source: Clickittech

What to Choose: Private Cloud or Public Cloud

Both of these cloud server deployments come with unique perks for individuals and businesses. How you benefit from these perks depends on the needs of your company.

A private cloud gives you more security than a public cloud. It remains a good choice for companies, organizations, institutions, or government agencies that need to maintain total control over all company operations. It could be as a result of very confidential computing operations or the strict requirement of regulatory bodies relating to the security of data within an industry.

However, a lot of investment, both financially and administratively, is required in managing and maintaining private clouds.

Public clouds, alongside being reliable, offer users a lot of perks compared to private servers. Using a public server is a great choice for any company or individual with limited financial resources. They help to boycott any expense that arises from the purchase of physical cloud infrastructure or the management and maintenance of these infrastructures. A Pay-as-you-go (PAYG) pricing scheme is also readily available.

Additionally, companies, especially growing businesses, with limited administrative resources benefit from outsourcing cloud server management to a third party. It allows them to focus more on other major areas of running their businesses.

Public Cloud VS Private Cloud
Source: CenterGrid

Public clouds also come with high scalability. Individuals or companies with very inconsistent or flexible server resource usage greatly benefit from this feature. With public clouds, scaling resources up or down to meet different requirements is an easy problem to solve.

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Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.