Data security drives the rise of private cloud

Private cloud means that a firm has control over the server as well as its location, where its data is stored

The acceleration in adoption of cloud-based solutions is well established now. An important dimension of this developmentis the rising popularity of private cloud services. 

Simply put, when an individual or institution keeps information in a server located in a remote location, the service is called a cloud solution. Essentially, the servers where the data is stored is not within the premises of the company. Typically, companies rent space with cloud service providers who ensure constant access and relevant backup for their information, with standard security measures. 

The need for private cloud services has been rising in India and globally for a few critical reasons. The intensifying need for protecting data and taking ownership of its storage has necessitated the importance of private cloud. Again, in simple terms, private cloud means that a company has control over the server and its location where its data is stored. In a normal cloud solution, the data can be kept wherever the service provider finds it convenient.

A company may be sure of its data on the cloud but is never sure where exactly the servers hosting its data are located. But in private cloud, a company owns its servers within a data centre. The company knows exactly where the servers hosting its data are. It is like owning a part of a warehouse and being in charge it. 

This shift has been driven partly by regulatory needs and partly by security considerations. 

In recent months, many governments and regulatory bodies across the world have been seeking data localisation. “Most companies across sectors are seeking control over the cloud servers where their information is stored,” says Krishnan Chatterjee, chief customer officer and head of marketing, India Subcontinent, SAP. 

In the services provided by SAP, customers are provided with dedicated infrastructure without sharing with other customers. They retain full control of information technology lifecycle management since it is “their” cloud. 

Many private and public sector companies in India are adopting digital processes and prefer private cloud solutions. Financial services providers have been told by central banks and other regulators to store data of their retail customers within the country. It is often impractical for them to set up their own data centres, so they are moving towards private cloud. As a result, their information is managed efficiently by the cloud services provider, while they have control over the servers which are located at a specified location. 

According to research firm Reports Globe, the private cloud server market garnered a revenue of $34.2 billion in the year 2019 globally, and this is likely to grow to $217.8 billion by the year 2027, at a compound annual growth (CAGR)of 32.8 per cent. 

SAP says that the demand for private cloud is growing rapidly in India and global markets. SAP developed an end-to-end private managed cloud solution to improve efficiency and customisation. A study done by Forrester for SAP assessed the impact of the use of private cloud for a few companies. 

Among its findings was that “enterprise resource planning related tasks are processed between 2-1000 times faster.”

For companies, a private cloud allows customisation as well as the ability to add its own layers of security. The control it gives the company meets its own and regulatory needs. 

“Many Indian companies are moving from on-premise data storage to cloud solutions. But the key demand is for higher control and security. This is the key advantage of private cloud services,” says Chatterjee. 

As India strengthens data rules, private cloud will have an important role to play.