A desire for greater control, security, and cost predictability is leading enterprises to devote more resources to private cloud infrastructure, according to a survey from Broadcom that finds organizations plan to strategically mix private and public cloud usage based on specific workloads.
Broadcom (Nasdaq:AVGO) surveyed approximately 1,800 IT decision-makers globally in early 2025 about their cloud plans over the next several years. The Private Cloud Outlook 2025 report shows that a majority of enterprises will balance a mix of private and public clouds, with an emphasis on building new workloads in private clouds.
“What used to be a public-cloud-first strategy 10 years back, five years back, is now shifting to be where private cloud and a cloud operating model is providing a very good alternative to public cloud,” said Pranshanth Shenoy, vice president of product marketing at the VMware Cloud Foundation (VCF) division at Broadcom, in a call sharing the survey results. “Private cloud is now becoming the platform of choice for security reasons, for modern workloads like [generative AI] and where customers and organizations need a high level of cost predictability.”
Public cloud continues to be a destination for workloads, but the survey reveals that private cloud is gaining popularity for a few reasons. The survey found that 93% deliberately balance a mix of private and public clouds, and their top three-year priority is building new workloads in private clouds. The results also show that 69% are considering repatriating workloads from public cloud to private, with more than one-third (35%) already having done so. In addition, 84% run both traditional and cloud-native applications in private cloud environments.
“These are modern workloads, customer and data-intensive workloads that customers or organizations are actively moving to private cloud,” Shenoy said. “The IT teams and the CIOs are now taking a fresh look at their application landscape and their workload footprint, and say, ‘Are these workloads placed in the right place, not only from a developer experience and a consumption experience, but also from a cost, security, and a compliance perspective?’”
Public cloud cost overruns
At the root of the shift from public and private cloud are concerns around cost, compliance, and security. According to the survey, 92% of respondents said they trust private cloud for security and compliance, and 90% value the financial visibility and predictability of private cloud. When it comes to cost, survey respondents say they:
- Value private cloud’s financial visibility and predictability: 90%
- Report some level of waste on public cloud spend: 94%
- Believe more than 25% of their public cloud spend is wasted: 49%
“Pretty much all of them believe that some of their spend, if not a majority of their spend, is wasted in public cloud. When you look at the survey data, 94% of the survey respondents said that public cloud spend is wasted, of which more than close to 50% believe that 25% of their spend in public cloud has been wasted,” Shenoy said. He explained while public cloud might have been good for agility and developer experience, “the business side of public cloud has hit a roadblock, mainly because of cost concerns.”
Cost management and optimization are now key priorities for survey respondents, and enterprises are looking for more predictable cost structures through private cloud solutions. (See our story about network bloat: AI-driven data movements cause cloud overspend)
Today 92% of enterprises run a mix of private and public clouds, and three-fourths adopted this mix intentionally. The Broadcom survey also shows that new workloads are driving the shift to private cloud. The survey results show that:
- 84% use private cloud for mixed application types
- 66% prefer private cloud for containerized applications
- 55% prefer private cloud for genAI workloads
Looking ahead three years, 53% of organizations said they intend to build new workloads in the cloud. At the same time, 50% reported they are building new workloads in public clouds, and 45% indicated they are making efforts to optimize cost management for those cloud workloads. Forty-four percent said they plan to improve with security and disaster recovery for operational resilience. Another 42% of organizations said they will focus on reducing their environmental impact, according to the survey.
Private cloud challenges
The interest in private cloud isn’t without its challenges, and the report details the concerns enterprises have when considering private cloud. To start, 33% of organizations said that siloed IT teams represent the greatest challenge of private cloud adoption. In response, 81% of respondents are now structuring their technical teams around a platform team rather than in silos.
Skills represent another key challenge to private cloud adoption. Thirty percent of respondents cited a lack of in-house expertise as one barrier to private cloud adoption, and 80% of responding organizations said they depend on professional services for cloud-related needs. Shenoy said that providers such as Broadcom have a responsibility to help organizations overcome skills challenges.
“There needs to be some reskilling and retraining, because a lot of these folks are used to be operating in silos and having their individual experience. They don’t have expertise when it comes to automation, when it comes to orchestration, when it comes to Kubernetes,” Shenoy said.
Source:: Network World