Private Cloud vs Public Cloud: Which is Better?

In Financial Services Technology, Technology by Matsco Engineering Team

Private Cloud vs. Public Cloud – which is better? Similar to most business technology solutions, the answer is: it depends.

What is a Private Cloud?

A Private Cloud generally refers to computing resources or infrastructure (e.g. servers, switches, firewalls) dedicated to a single business (or single tenant, if you’re interested in the official terminology).

Benefits of Using Private Cloud

Customization: Enhanced capabilities for customization in terms of maintenance and adapting to various security requirements.

Costs: The costs of deploying a Private Cloud can be very predictable, which is great for budgeting and forecasting.

Improved Security: A Private Cloud allows you to set up your security to meet your business needs as well as compliance/data protection requirements.

Scalability: Private Clouds are highly scalable to meet the needs of your growing business.

Control: A Private Cloud gives you increased control over the server or storage.

Potential Disadvantages of Using Private Cloud

Costs: The initial costs associated with setting up and maintaining a Private Cloud may be higher than an in-house or Public Cloud solution.

Security: Unlike a Public Cloud, you’ll need to set up your own internal and externally-facing security.

What is a Public Cloud?

Public Cloud generally describes computing resources or infrastructure simultaneously shared among multiple users or businesses and owned and managed by a third-party provider. Currently, Public Cloud is the most common type of cloud computing deployment available, with MS Azure and Amazon Web Services (AWS) arguably the most recognizable Public Cloud services.

Benefits of Using Public Cloud

Cost savings: Businesses can generally reduce their IT costs by switching to a Public Cloud solution from in-house servers. Service providers typically can maximize their earnings by sharing resources among multiple businesses or users. You essentially pay for what you need to use and there’s no need to purchase any hardware, and in some cases, any licenses.

Security: Small and medium-sized businesses may struggle to implement strong security if they opted for a Private Cloud. However, Public Cloud providers often provide enterprise-grade security.

Reduced Complexities: You can easily bypass the complexities typically associated with server management and maintenance, as this is generally managed by the provider.

Potential Disadvantages of Using Public Cloud

Reliability and Performance: Since the cloud resources could be shared by a large pool of users/businesses, you may experience reduced performance if there’s a spike in the use of one of these users/businesses.

Legal and Jurisdictional Issues: Since Public Cloud servers could be hosted in any country, your data may be subject to the privacy laws applicable in such regions.

Differences between Private and Public Cloud

Simply put, a Private Cloud can be likened to renting a house while a Public Cloud is similar to renting an apartment. With the apartment (i.e. Public Cloud), the building is shared with other tenants, whereas the house (i.e. Private Cloud), there’s increased privacy and the facility is dedicated to the use of a single tenant.

Here are highlights of the differences between a Private Cloud and a Public Cloud:


Private Cloud

Public Cloud


Cloud computing resources and hardware are dedicated to a single user or business.

Resources and hardware are shared across multiple users.

Ongoing support

Will most likely be performed by in-house technicians.

The Public Cloud provider will most likely offer ongoing support and maintenance by their technicians.


Provided by users. Since a Private Cloud usually offers isolated network environments, you could potentially enhance its security to meet stringent compliance requirements.

Public Cloud service providers are generally known for providing enterprise-class security to meet the varying needs of different clients.


Very customizable according to your business needs and specifications.

Customization will be limited to what the Public Cloud provider sets.

Initial and Ongoing Costs

Initial costs can be high but may be more cost-effective in the long run.

Potentially slightly lower initial costs but could potentially be less cost-effective as capabilities increase.


Easy to scale and can be done in-house. Cloud resources can also be distributed to different apps and in-house users according to business needs.

Easy to scale but depends on your agreement with the service provider.

Whether a business should opt for Private Cloud vs. Public Cloud depends entirely on the business needs, specifically compliance requirements, security, and costs, all of which will ultimately guide your decision or cloud choice. Financial Services, for example, especially companies that need to host applications, generally opt for Private Cloud due to the dedicated and easily scalable resources.

What if I Want Both?

You can have both! Some businesses opt for a hybrid solution, which is a combination of Private and Public Cloud solutions. Depending on the business and its needs, this can look like a Private Cloud solution for files and applications and Office 365 for email (Public Cloud), a Private Cloud primary environment and a Public Cloud disaster recovery environment, or any combination of the tools and resources your business needs.

Questions about what’s right for you? Email us at

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