Why Enterprise Leaders are Embracing their Private Cloud Strategy

As I'm sure you've noticed, Broadcom and Tanzu are extremely focused on private cloud, especially private cloud in larger enterprises. When all you hear about is public cloud, why are we so focused on private cloud? It's because despite decades of migration efforts, private cloud remains essential to running applications and workloads for the world's critical industries and government agencies.

Why does private cloud persist? It's all the usual stuff as with any enterprise IT: security, governance, data handling, cost management, and new workloads like generative AI that benefit from on-premises placement. Also, while it's not the flashiest reason, applications often live on private clouds because those applications work just fine there, and because the benefits of migrating to the public cloud don't outweigh the costs and risks.

Let's look at two sources of information for this thinking. First, the conversations we're having with people thinking through all of this, and then what surveys and analysts are finding.

VMware Tanzu GM Purnima Padmanabhan On "Why Private Cloud?"

I sat down recently with VMware Tanzu GM Purnima Padmanabhan to hear more about her conversations with customers. She had a lot to say about their application delivery strategies and where they're running workloads.

Here's the reasons why organizations find private cloud useful:

1. Data Gravity - applications running in private clouds often handle large volumes of data. Transferring this data to and fro other environments is challenging, and costly, especially when integrating advanced analytics or AI/ML capabilities. Keeping the data within a private cloud minimizes complexity and enhances performance.
2. Ecosystem Gravity - applications frequently interact with other systems such as ERP, supply chain, ordering systems, and other applications and services. Hosting all these interconnected applications within the same private environment can improve performance and reduce latency.
3. Control Over Governance, Privacy, and Regulation - private cloud can offer great control over data management, helping organizations comply with governance policies, privacy standards, and regulatory requirements. Some customers feel more secure managing sensitive data within their own infrastructure, where they can enforce strict controls.
4. Effectiveness and Familiarity of Private Cloud - many organizations find that their applications run just fine on existing private infrastructures. Instead of migrating to public clouds, they can enhance their private environments by implementing platforms that make it easier for developers to build and update applications.

This reasoning matches up with what I see in the industry in general. Recently, some analysts have noted that public cloud cost overruns are common and expected to keep happening. Better FinOps management with products like VMware Tanzu CloudHealth is one way to address that, of course, and so is getting more control over your spending with a private cloud approach.

Finding the Cloud Equilibrium

We live in a hybrid world. People like choice. The past 18 years have shown us that it's not "all in" on one path or another. When it comes to the cloud equilibrium, estimating the exact balance is difficult. Let's look at some of these surveys.

First, the equilibrium-vibe starts peeking out in one of my favorite charts from Benedict Evans:

What you see here is a leveling off where enterprises are putting their workloads. Since 2016, about 20% to 30% of applications have been running in public cloud.

The number for public cloud workloads seems low to me though, based on other surveys. For example, when I looked at industry surveys back in May of 2023 and then in October 2024, it made me think that the split is something like 50/50. Historically there's just been some bouncing around on the charts, in both directions, over the years. And for even more industry overviews, check out this post from my colleague, Jaikishan Tayal.

Narrowed down to application development in enterprises, the case for cloud equilibrium is even stronger. A lot of, if not most of, application development in enterprises is about modernizing and then enhancing existing applications, not creating new ones. And this is good! Those applications are what currently run everything and rewriting them is risky. Why not just improve those applications? So, when you look at where modernized apps will land, you see a similar cloud equilibrium:

New Tanzu Platform 10 for App Delivery on Private and Public

This trend of enterprises running workloads on both public and private clouds is very much aligned with Tanzu Platform 10. We know today's enterprises want to, and do, run applications in public cloud and on-premises. We designed Tanzu Platform 10 to support app teams that are running workloads on Cloud Foundry or Kubernetes. Coupled with applying platform engineering practices, this gives enterprises their own, private platform as a service (PaaS).

What this means is, application developers can automate secure container builds, bind services to apps, deploy code with simple commands, and easily scale applications whether they are running in a Kubernetes-based or Cloud Foundry environment. You get the feel and functionality of public cloud, but the benefits of private cloud. Tanzu Platform 10 includes new capabilities that will change the way customers manage, secure, and optimize their modern workloads regardless of where they are running.

Best of all, when combined with VMware Cloud Foundation (VCF), Tanzu Platform 10 is the fastest path to a complete private cloud. With Tanzu Platform 10 customers can continue to enjoy the attributes of Tanzu Platform they have come to trust and count on like inherent security, self-service developer experience, operational efficiency at scale, and secure paths to production.

When you look at why platforms in the public clouds are so great one reason is because they're tightly integrated and from a single source: the cloud provider. Likewise in the private cloud, when you look at VCF plus Tanzu, you get the same benefits of being tightly integrated and from a single source. Traditionally, enterprise IT isn't like this: it's a mixture of components from different sources, including home-grown (or "DIY") systems. To really get the advantages of private cloud, you have to follow that same single-sourced, integrated approach that you see in public cloud.

It's important to look at the people-side of all of this as well. Managing public cloud deployments requires some different skills for IT staff. When you use the stack above, you're taking advantage of the years of skills that your organization has built up managing its own private cloud. If you're concerned about skills gaps, as I see in annual CIO surveys, ask yourself why you're not taking advantage of the people you've invested in all these years.

What's Your Private-Public Cloud Ratio Strategy?

There are a lot of private clouds out there that are being ignored. After talking with people in those organizations at our annual conference Explore and over the past couple of years, I have plenty of anecdotal data points about that. You've probably got a lot of applications running just fine on private cloud: make sure not to neglect them. Chances are, those apps running on your private cloud are the ones running your business and helping all of us out day-to-day.

Tell me what your experience is: what's the ratio you're seeing, the plans you have and have had in the past. And maybe next time I won't have to dig so much to find out where all the apps are running.

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