In the collaboration space, cloud has become a very strong trend, but like a lot of game-changing innovations, taking things at face value isn’t such a good idea. Vendors can’t seem to move their UC solutions to the cloud fast enough, and service providers are jumping into the game to compete with them via white labeled hosted offerings. IT has never before faced such a range of choices for something that in earlier times was basically a commodity – phone systems – but is today becoming a highly strategic decision.

I write about cloud regularly, and being an analyst, will look for balance as a matter of course. There are virtues for both premise-based and cloud-based forms of UC, and this time around I’m going to focus on a particular variation of cloud that doesn’t seem to get enough attention these days, namely private cloud.

People often talk about “cloud” in ubiquitous terms, as if it’s been around forever and its dominance over premise-based models is inevitable. Perhaps we’ll get to an all-cloud world someday, but what I and others see in the market is a slower-than-expected takeover. For enterprises in particular, there’s strong interest in cloud, but the favored model has been hybrid, where some elements remain onsite with others being hosted. In time, they may well go all-cloud, but IT will need to ease into it.

The reasons behind that thinking require a separate analysis, but here, my focus is on the growth opportunity I’m seeing with private cloud. Public cloud gets most of the attention, mainly because the big players are so well known – AWS, Azure, Google, Rackspace, etc. – and have the economies of scale to dominate the market. That said, it’s still early days for cloud – especially in the communications space – and IT decision makers are trying to understand where it fits for their needs as well as where the true business value lies.

No doubt, the cost efficiencies and on-demand scalability make public cloud very appealing, but as enterprises consider pushing applications offsite, some realities start to become apparent. One issue is not knowing where your data actually resides once it’s in the cloud; which can be problematic for industry-specific compliance around security. Perhaps more important is losing a sense of privacy when your data is being managed on a multi-tenant platform, shared among other hosted clients – sometimes even your competitors.

Another consideration is the simple fact that having applications hosted in the cloud doesn’t take the problem completely off of IT’s plate. They still have to manage the applications going forward, plus to get this in place effort is required to migrate legacy and premise-based applications off-prem into a cloud environment. All indications tell me this is easier said than done, serving as a deterrent for some companies to using the cloud.

On a more operational level, IT gives up control over company data – which will be the case with any form of outsourcing – and that can limit their ability to customize applications. This is becoming increasingly important for two reasons. First, IT will have customization needs for applications that will be used by everyone company-wide. Second, each line of business will have similar needs that are specific just for their domain. The more extensive these customization needs are, the more challenging a public cloud deployment will turn out to be.

For many companies, the positives about public cloud outweigh these concerns, and clearly this model is gaining traction. However, there is more to the story, and that’s where private cloud comes into the picture. I’m not alone in saying there is a lot of misunderstanding, not just about the cloud concept in general, but also about the various deployment options, namely public, private and hybrid.

When it comes to addressing the above issues, private cloud has a lot to offer. Of course, the cost is higher, as would be anything that’s private instead of public. Every scenario is different, but let me break down some specific use cases where private cloud is a good option, especially for collaboration.

· In cases where the complexity of moving to the cloud in general is a holdback, private cloud overcomes this. When IT doesn’t know what to do to make a cloud transition, they’ll just move on to other priorities that can be addressed right away in order to keep the line moving. Most public clouds are in the business of hosting on a large scale, and otherwise, there’s a lot of DIY as well as BYOA that falls to IT. To overcome this obstacle, private cloud providers can offer onboarding capabilities to make this process easier, and in some cases possible.

· For collaboration in particular, solutions are constantly evolving, with new applications/integrations coming on a regular basis. This translates into an ongoing form of customization, and that’s not what public clouds are really built for. Their ideal customer has a static application where the drivers are low cost hosting and scalability to serve a large user base. In many ways, private clouds offer more control and easier ways to customize platforms. A great example would be enterprises that want to have cloud-based platforms for both UC and contact center. Not only will each platform need to add new applications, but there’s a growing trend for integrating them so employees and agents can share a common directory. These requirements can be complex, but will be much easier to do in a private cloud, especially with a provider that has domain expertise to help IT along the way.

· Within enterprises, another important development is how LOB managers are increasingly undertaking their own initiatives independent of IT. This is becoming more common for business applications like ERP or Dynamics where the LOB wants flexibility and control as well as data security. As they get further along with UC and start realizing its business value, LOBs will want to do the same here. For whatever reason, when LOBs can’t get what they need from IT on this front, the cloud speaks loudly, and running their own cloud infrastructure is the best solution. Since the LOB is funding it, they will determine the right model, and if they feel these applications are too strategic to be housed in a public cloud, going with a private cloud provider will be the right choice.

· Vertical markets provide great use cases, with finance and healthcare being prime examples. Both are highly regulated, and private cloud makes compliance easier, especially around data sovereignty. Supporting multi-site operations is a common need for both, and when it comes to making universal changes across locations, private cloud provides IT with a lot of control and flexibility. Security is another consideration along these lines, whether it be protecting mobile payments or EMRs. On the collaboration front, private cloud makes it easier to implement and support new applications that bring true business value. FinTech is coming into its own now, and UC has a big role to play, especially for customer-facing communication. Healthcare is just as promising, especially telehealth, where there are major benefits to come both for providers and patients, as technology makes care more accessible.

There’s more to consider with private cloud, and as my research continues, I’ll have more to share. At this point, however, I’ll conclude by noting one company from my briefings. That would be Breakthrough Technology Group, a private cloud provider that is very much on the pulse of what IT decision-makers really need. Two things about BTG stand out in terms of what enterprises should be looking for in a private cloud partner.

First would be BTG’s overall capabilities in terms of hosted infrastructure, and that’s self-evident even based on a cursory review of their offerings. Marketed as Adaptable Cloud Services, their model checks many of the boxes cited herein, especially around supporting the needs of both IT for company-wide applications, as well as LOBs for their specific operational needs.

The second item would be their ability to support mid-market IT needs, especially for vertical market scenarios. Whereas large enterprises can afford private cloud as a matter of course, and SMBs will favor more economical public cloud solutions, providers like BTG have developed an attractive value proposition for the mid-market. While their architecture is built to support enterprise-grade requirements, SaaS solutions like UC, CRM, etc. can be scaled to the mid-market with cost-effective licensing that also allows for extensive customization.

Over the course of my research, I’m seeing that this is a difficult balance to strike, but if providers like BTG can do it, then mid-market IT decision makers should expect it. If that’s not your expectation, then you’ve set the bar too low for private cloud. Hopefully my post here will help change your thinking, especially if you’ve only been considering public cloud to this point.