Virtualisation and private cloud: What’s the difference?


What’s the difference between advanced virtualisation and the incoming wave of private cloud computing solutions? That’s the question a number of readers were asking themselves last week after top-tier bank Westpac revealed it had in the past year deployed its own private cloud.

The debate appeared to revolve around to what degree Westpac’s platform offered cloud computing attributes such as self-service and on-demand provisioning, elasticity of resources and the ability to attribute internal billing for computing use. But some claimed the bank could simply have an advanced implementation of VMware’s ESX product.

According to VMware’s local managing director Paul Harapin (pictured), the difference between advanced virtualisation and private cloud is subtle but profound. “There sometimes is a belief that cloud is a product or it’s a destination,” he says in response to last week’s debate. “In reality it’s not — it’s an approach to computing.”

Harapin believes there are three phases in customers’ journey to cloud computing.

In the first, customers virtualise various aspects of their IT production resources, particularly infrastructure — for example, a customer’s testing and development environment, its print and file servers and so on. “The easy stuff has been virtualised,” he says.

In the second, customers virtualise their critical applications — software such as Oracle, SAP, databases and so on. Email might become part of the virtual pile in this phase. And by this stage in a customer’s journey, virtualisation is no longer just about cost recovery — but more about how organisations can make their software more highly available, and increase the speed at which it can provision it.

“This move is not driven just by saving money on hardware,” says Harapin. “If your SAP front-end product is not working, the fact that you save a bit of money on a server is not important.”

It’s the next phase — where an organisation would have “pretty much everything” virtualised, where Harapin believes the true potential for private cloud enters the picture.

In this phase, he says, everything is virtualised and individuals within the organisation are able to log on and self-provision new resources and customise those deployments themselves. In addition, in this phase the use of those resources could be charged back (billed) on paper to the business unit within a larger organisation.

So for example, you might have a situation where the Federal Government operated a private cloud, which was utilised by various agencies, who received a bill for that use at the end of each discrete period. The same situation could occur inside a major bank.

In this phase, Harapin says, other possibilities come in to play — for example, organisations should be able to dynamically utilise resources from public clouds — such as are operated by companies like Microsoft and Amazon — to handle temporary spikes in loud. This technique is known as “cloud-bursting”.

How’s Australia doing?
Harapin says when it comes to the local market, his gut feeling is that the country is probably further ahead than most on that journey to the cloud. Australia is the most virtualised country in the world, he says, with an average of more than 40 percent of resources virtualised in organisations. In addition, recent research released by IDC in collaboration with VMware showed that 72 percent of customers were currently doing what was described as private cloud infrastructure.

Local customers have started to use VMware’s chargeback facility to measure usage, Harapin says — although the internal processes for implementing the billing are often not in place yet.

“Do they send me a purchase order, and do I then deliver them a cloud? No,” says Harapin. “Does it mean they’re on that journey? Yes.”

Image credit: VMware and Tim Wolf, royalty free


  1. This is a vendor who, by all rights provides a great product to automate, centralise and manage x86 infrastructure, trying to dictate what their version of cloud is.

    Cloud computing is about providing ubiquitous access to services contained either internally or externally within an organisation. Access to these resources should be integrated seamlessly into the corporate or users’ current experience. These services are abstract from the infrastructure, and/or the technology used to provide an interface. Cloud services are delivered using a standards, such as web services, are identity driven and provide a service to fulfill a business requirement.

    When a customer wants to buy a cloud service they should not select it whether it runs on VMware, Cisco Servers or EMC hardware, or Dell and Microsoft.

    They should select a cloud service provider it because:-

    1. It meets their business requirement
    2. It has governance built into it to provide support, business continuity and future roadmap to expand the offering
    3. It meets financial metrics that allows the organisation to reduce budget spend, or build a business case to show that adoption of the services will increase revenue.
    4. The services allow integration into their identity environment and support access from multiple interfaces/devices.
    5. Location of the hosted services meet security and regulatory requirements

    If a service provider can do x86 server virtualisation and infrastructure hosting at less cost that an organisation can achieve to host it internally in a data centre, that is a managed service.

    Traditionally, automation, scalability and provisioning in a data centre has been called Utility Computing (refer Intel, IBM, HP and even VMware way back when).

    What cloud is not;

    a virtual machine, a vendor consortium to provide hypervisors, x86 servers and block storage. It’s also not an organisation consolidating to virtual machines, automating provisioning or running their test bed in their own data centres on virtualisation. That’s all Vendor Hyperbole.

    • Hi Michael,

      with the greatest of respect, I feel you have missed the point that is being discussed here.

      What is being discussed is not cloud vendors in general — or even cloud computing in general, but the evolution of advanced virtualisation solutions into private cloud computing in the Australian context.

      As we wrote in our feature article about the definition of private cloud last week, there are two things driving this — a top-down approach, where people are looking at the whole phenomenon of cloud and working out how to apply it to their business, and the bottom-up approach, where people are looking at how they are already using virtualisation in so many ways and how they can extend and enhance that until it becomes something very much like private cloud.

      Your comment is primarily discussing the top-down approach, whereas what Harapin is talking about (because I asked him about it) is the bottom-up approach.

      I hope this makes sense ;)

  2. Renai,
    Um, actually, I think Michael is spot on, and very eloquently put.
    “the evolution of advanced virtualisation solutions into private cloud computing” .. is as Michael put it just outsourcing your server infrastructure to a managed service provider.. but they will call it “cloud” because it’s the buzz word of the moment
    So no, this did read like a vendor advertisement….the paragraph that starts with “How’s Australia doing?” is the clincher…to him simply providing a big ESX farm that internal customers can self provision their own servers and get charged for doing so = cloud
    Don’t get me wrong, in his job I’d be pushing the same line ..

    • Sorry David, private cloud doesn’t usually fit the definition of a managed service. Take Westpac — they are operating an extensible infrastructure inside their own datacentre. It’s not managed by a vendor at all. And the end users within the organisation are becoming disassociated from the management of the platform — they are gaining the ability to provision their own resources.

      Advanced virtualisation systems are gradually evolving into something more inside these large organisations.

      You can be cynical all you want, but the fact is that I have spoken to a number of Australian end users and analysts about this phenomenon, and there is no doubt it is real — not just a buzzword. Private cloud is not just virtualisation writ large — it requires the end user’s systems to be tied together in a more sophisticated and holistic way. As Paul points out, it’s a way of thinking rather than a specific product from a vendor.

      I’ll explore this more in the next three articles in our features — the next article is due on Tuesday 26th.

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