Classifying cloud computing models into public, private and hybrid cloud involves much more than the underlying architectural differences. The infrastructure and services provided — such as Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) — can take the form of various virtualized, hyperconverged, software-defined models.
In recent years, hybrid cloud systems have become the preferred IT model, with wide-ranging benefits like increased business agility, cost control, faster delivery of new products and services, and access to the latest technology.
The rise in AI applications and services only underscores the strength of hybrid cloud. In the 2025 Nutanix Enterprise Cloud Index, 94% of respondents agree that their organization benefits from adopting cloud-native applications or containers, especially with the rapid adoption of new workloads like GenAI.
“AI-based services and applications are absolutely made for hybrid multicloud architectures,” said Induprakas Keri, senior vice president and general manager of hybrid multicloud at Nutanix.
Deciding when to use a public or private cloud for a specific operational process or function is a bit like choosing a place to stay on vacation. It’s important to consider your budget, needs, and purpose to get the best experience. Keri said that as enterprise AI kicks into gear, IT teams need to optimize infrastructure, control costs and deliver measurable business outcomes.
“Steps in the AI workflow will happen across various infrastructure environments,” Keri, noting that there are three distinct phases to building out an AI solution: creating a foundational model; training and refining that model; and using the model for inferencing.
“Those three phases happen to run on three very different infrastructures,” he said.
“The only place on the planet where you have enough computing power to create a foundational model is a public cloud. But many organizations are going to want to train those models on proprietary data in their on-premises private clouds. And you want to inference close to the edge, because of latency. You can’t afford to be religious about where your workloads are running. You need to be hybrid.”
What is Public Cloud for the Enterprise?
A public cloud model delivers IT services to organizations directly over the Internet. A single vendor or provider manages these services, allocating the central pool of resources to multiple clients based on computing power or access requirements.
A single public cloud system consists of a central server controlling multiple other servers and the network. Users in client organizations connect to the Internet and then sign up for and use a web-based interface or Application Programming Interface (API) to access the infrastructure and services.
The defining characteristics of public clouds are their scalability, elasticity and pay-per-use methodology. allowing companies to set up, scale and tear down servers as needed. There is no obligation to use the hardware, software or ecosystem for a minimum or extended length of time. For predictable workloads, customers can also choose to reserve instances for longer time periods, taking advantage of discounts offered by some public cloud companies.
What is Private Cloud for the Enterprise?
A private cloud refers to data centers managed by customers, typically through purchasing hardware and software and making the resources available to their employees and customers within a private network. Some organizations have multiple data centers connected across different geographic regions and locations to serve constituents worldwide. Consider the private cloud to be an extension of a company’s IT department with the help of a third-party service.
A private cloud lies at the core of virtualization, separating services and software interfaces from physical devices. All applications are seamlessly available on the cloud, independent of the underlying hardware.
Private cloud is ideal for companies bound by strict data access and storage regulations or those with stringent security requirements. This security is extended to the network; only authorized users can run access-controlled applications through a private VPN or the organization’s Internet.
The infrastructure of the private cloud can be set up on-premises in a company’s existing data center, externally with the cloud service provider, or a combination of both. A private cloud is the ideal environment for virtualization and hyperconvergence, enabling the organization to pool and allocate resources or scale them up and down.
Why Choose Hybrid Cloud and Hybrid Multicloud?
There’s no one-size-fits-all cloud computing approach, though most IT leaders feel hybrid cloud is the ideal model. The choice isn’t between private or multiple clouds but rather how to make applications and data work across the hybrid ecosystem.
The deployment and location of the cloud or the costs and maintainability of on-premises IT infrastructure can also influence this operational decision.
What Are the Benefits of the Private Cloud?
Sometimes, a public cloud service may not provide the desired control or performance an organization requires. The private cloud can be used to maintain speed and agility because it can provide:
Better IT resource utilization
Optimize application performance
Adapt to existing resources and requirements
Observability across systems
Meet compliance and security needs
Better IT resource utilization – A key tenet of public cloud usage is pay-per-use. However, organizations typically end up paying for resources whether the application is being used or not. Given that public clouds offer standard compute resources, many organizations often don’t get exact sizing, resulting in deployments with resource micro-waste and higher TCO. In cases with predictable workloads, the private cloud is usually more cost-effective.
Optimize applications – Extending legacy or existing apps to the cloud is often difficult. Public clouds follow modern development practices for their environments, which are not necessarily compatible with the organization’s practices. With a private cloud, developers can tweak the organization’s existing apps by containerizing and “cloud-enabling” without starting from scratch. When a private cloud is deployed on-premises, workloads requiring low-latency access to enterprise APIs speed up.
Further, developers can “refactor” apps and functions that use microservices, communicate with the data center using lightweight protocols, and isolate and scale resources up or down.
Eventually, the number of microservices and in-house apps keep growing and management becomes complex, requiring better service discovery, monitoring and security resources.
In many cases, such as with Nutanix Clusters, IT teams can use the private cloud to develop applications that unify the whole hybrid cloud ecosystem with a ‘single pane of glass’ interface.
Adapt technology according to requirements – The adaptability of private clouds is not restricted to apps, compute and network. Storage systems can also be set up and reconfigured at will according to an organization’s changing needs. Since only one tenant is using the resource pool, some underlying technologies can be adapted or tweaked to conform to specific requirements.
"One of the key benefits from my point of view is a much greater insight into what’s going on inside the box,” said Jeff Longley, Systems Administrator at WD-40, after they virtualized business-critical workloads with a combination of Nutanix Enterprise Cloud, clusters and other solutions.
“That’s primarily down to the (Nutanix) Prism management interface which allows me to keep a close eye on everything through a single console. Not that I need to do that very often — it just works.”
Grant granular user access – Public clouds, including IaaS and SaaS platforms, offer “package access” to different features to individual users. Private clouds enable separate access to resources on an individual or organizational basis.
Meet compliance and security standards – The private cloud gives complete control and visibility into user access, authentication and identity management through an isolated network environment. Additional benefits include data storage, transfer, management operations and full application-level security.
Companies in finance, healthcare and other highly regulated industries need this level of compliance. Standard data security and privacy practices for Sarbanes Oxley, HIPAA and PCI can be met via known private cloud implementations.
What are the Benefits of the Public Cloud?
The public cloud helps organizations can carry out routine operations with a ready-made application that can scale. Some of the benefits include:
Different spending model
Scale capacity on demand
Build redundancy and availability
Skilled IT support
Different spending model - The public cloud offers enormous infrastructure resources without any upfront expenditure for setup or deployment. The pay-as-you-go model enables organizations to scale up or down as needed, such as when setting up a new project or testing an application.
Hardware costs are practically zero with the private cloud, but the public cloud removes the need for data centers altogether. Applications take care of the workload. CAPEX (capital expenditure) is fully transferred to real-time OPEX (operational expenditure), leveling the playing field for smaller businesses with less capital.
Scale capacity on demand – With public cloud systems, handling usage spikes in non-business-critical applications or meeting demand for more resources is a breeze. Unlike the private cloud, admins don’t need to bother with provisioning or optimal resource utilization.
Build redundancy and availability – Private clouds can lead to highly available, geo-redundant infrastructure, though true redundancy requires multiple data center locations. In today’s hybrid cloud setups, many companies have found a workable alternative in public clouds for disaster recovery (DR).
They deploy a “warm DR” infrastructure, putting the production environment in a private cloud and the recovery environment in the public cloud. The public cloud contains a full backup of the production data and applications but remains non-operational until a disaster occurs. This strategy pairs private cloud availability with public cloud cost savings.
Skilled staff to manage IT infrastructure – Public clouds attract talented people to work for them and on their platforms. Technical workers are key to the core business, and standardization of technology provides ample career opportunities.
As a result, admins responsible for maintaining, updating and managing public clouds are battle-hardened and prepared in the event of a disaster or attempted security hack.
How to Develop a Cloud Adoption Strategy
As technology evolves and new regulations and security concerns emerge, enterprises must coordinate cloud approaches around costs, complexity and security.
A smart cloud adoption strategy should be based on outcomes such as better staff mobility and productivity, business continuity at all times, reduced operational risk and minimum dependence on a particular vendor or provider.
Optimizing and managing costs is key to achieving success. Flexera’s State of the Cloud Report shows that organizations had an estimated wasted cloud spend of 27%. Additionally, 71% of companies plan to optimize their existing use of the cloud this year to save costs — the top initiative among respondents.
The solution is to relentlessly reduce operational complexities and make the infrastructure agile, which requires a defined, documented cloud implementation strategy. For each proposed public or private cloud implementation, CIOs can ask:
How well does the solution address the functional requirement?
What are the criteria for provisioning and de-provisioning and what opportunities exist for automation?
What is the estimated TCO, and how will consumption be monitored?
How does the deployment and scale affect organizational and compliance policies?
As more IT operations become hybrid with private and multiple public clouds, businesses are eager to write and deploy applications quickly and effectively. That trend will only continue with the increase of AI — 85% of organizations already have a GenAI strategy in place.
Nutanix’s Keri believes companies will increasingly turn to hybrid cloud to find the right balance of cost and performance. Hybrid cloud solutions also ensure data compliance and security while minimizing latency, which is critical in the GenAI era.
“Successfully delivering a cohesive, scale-out infrastructure that can span across this entire AI workflow will be a key to success,” he said.
This is an updated version of the article originally published on November 18, 2020 then updated on February 8, 2021.
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Dipti Parmar is a marketing consultant and contributing writer to Nutanix. She writes columns on major tech and business publications such as IDG’s CIO.com, CMO.com, Entrepreneur Mag and Inc. Follow her on Twitter @dipTparmar or connect with her on LinkedIn.
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