How AI is Leading a Private Cloud Renaissance

At VMware Explore 2024 Las Vegas, Broadcom President and CEO Hock Tan declared: "The future of the enterprise is private. Private Cloud. Private AI. Fueled by your private data." No doubt, a few eyebrows were raised. After all, shouldn't 'private cloud', a technology term that has been in the mainstream for more than a decade, now be considered passé?

Definitely not.

Growth in the private cloud services market is set to surge from $92 billion in 2023 to a staggering $405 billion in 2033 according to a report from Future Market Insights.* And in a survey published in a report on repatriation from IDC in June 2024, more than 80% of respondents expected to see some level of repatriation in the coming year.**

Indeed, the term 'private cloud' recently hit the news in a big way with the Apple announcement of Private Cloud Compute - their solution for how consumers can use AI on mobile devices while protecting their privacy. This industry news was a big announcement from Apple; yet both the news and the terms Apple used (Private AI, Private Cloud) are not surprising. The Apple news may have been focused on the consumer market, but the concepts raised align to the business need for AI. Enterprise controls and private cloud are the solutions that deliver AI to businesses - and they are core tenets of VMware Private AI .

In short, this link between AI and the renaissance of the private cloud is not a coincidence. It addresses real enterprise and consumer needs.

The Impact of Generative AI

In early 2023, all heads were turned to the sudden rise of Generative AI, and along with it, the recognition that AI is a tool that must be used with care.

For business and government, AI holds a tantalizing promise of immense benefits, but these advancements also come with important considerations on how AI should be managed, particularly those that relate to security, data privacy, intellectual property leakage, reputation, and regulatory compliance.

In response to these considerations, at Explore Las Vegas 2023 we announced VMware Private AI. This innovative architectural approach offers a wide spectrum of AI benefits while embedding robust security measures, management and governance capabilities, and trusted enterprise-level controls, allowing customers to bring AI models to where the data resides. In short, Private AI gives you the flexibility to run any AI models adjacent to your data with all your protections in place.

When designing VMware Private AI as a solution to the GenAI challenge, we realized that the characteristics of private cloud allowed us to give organizations the ability to exploit the best ways to both utilize and manage AI.

VMware Private AI quickly proved that it can be cheaper and faster than many of the most popular AI services, most of which run in the public cloud. It drives better efficiency for GenAI adoption through high performance, optimized resource utilization, and streamlined management processes. The impacts include reduced operational costs and implementation times, which, along with significantly reduced risk, result in accelerated AI projects.

The Demand for Private Cloud

Public clouds, despite all the value they undoubtedly bring, remain beset with fundamental challenges for an enterprise customer around cost, complexity, and compliance that are inherent in their nature and impact many workloads.

Private and hybrid cloud deployments should help combat these challenges, but have fallen short of their theoretical potential. Most have historically been a collection of disparate parts with an automation layer built on top. In essence, many private cloud deployments have existed as independent snowflakes, unique to each organization. Despite this, demand continues to increase. Why?

As discussed in part 1 of this series, the concept of a private cloud remains the best answer to solving today's growing IT cost, complexity, and compliance challenges. Moreover, it is now entirely possible to have a private cloud, with all the advanced benefits of a true cloud operating model, delivered on your terms and without the public cloud challenges, using a private cloud platform like VMware Cloud Foundation.

Executives can only be patient for so long before they need to see action. Business no longer waits for IT, and AI is now the catalyst for the next evolution of capability demand.

Conclusion: The Private Cloud Priority

Many cloud strategies are languishing and struggling to drive the business IT capability past 'surviving', with a complicated mix of public clouds and private deployments.

AI, in many ways, is just another application to attach to your data. But the additional levels of AI benefits and AI management are raising the already large stakes of protecting your private data while extracting value from it through your applications.

In addition, AI applications are resource-intensive, and it's more than just GPUs; it's memory, networking and storage too. And to efficiently operate AI applications, you need an automation layer to make the most efficient use of these resources to get a lower TCO. That is only going to be possible if you have your private cloud house in order.

The scale of the demand for business agility and operational efficiency is only matched by the accompanying need for data privacy and security, which was already at an all time high, and is coming under further scrutiny with AI projects.

Private cloud must become a focused, strategic priority for enterprise leaders, lest they fall too far behind the expectations of the businesses they support.

Ensuring your private cloud is really private and really a cloud will provide the basis for meeting this coming surge in demand. This is our mission and strategy with VMware Cloud Foundation.

But even the best technology is just an enabler and often changes must be made to fully leverage its benefits. In our final article of this series, we will cover this critical strategic shift that many CIOs have yet to uncover.

Stay tuned.

*Future Market Insights, Private Cloud Services Market, July 2023

**IDC, Assessing the Scale of Workload Repatriation: Insights from IDC's Server and Storage Workloads Surveys, 1H23 and 2H23, doc #US50903124, June 2024

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