Public Cloud Computing

Tuesday Mar 28th 2017 by Cynthia Harvey
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Everything you need to know about public cloud computing, including the market size, features and benefits, challenges, vendors and more.

Public cloud computing is one of the fastest-growing markets within enterprise IT. It allows anyone to gain immediate access to computing resources via the Internet and pay for those resources based on how much they consume. Since launching around 2006, public cloud has completely reshaped the enterprise IT industry, prompting vast changes in how datacenters are managed.

What is the public cloud?

Gartner defines public cloud computing as "a style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external customers using Internet technologies—i.e., public cloud computing uses cloud computing technologies to support customers that are external to the provider’s organization."

In simple terms, public cloud services are computing resources accessed via the Internet that customers can buy from a third-party provider. That's different from a private cloud, which are services that organizations or individuals set up for their own use, and a hybrid cloud, which is a combination of public and private clouds that are managed together. To help you decide which type of cloud platform is for you, and for help deciding on a specific company for cloud services, read our comprehensive guide to cloud computing.

According to IDC's Worldwide Semiannual Public Cloud Services Spending Guide, the market for public cloud services will likely be worth $122.5 billion in 2017, which is a 24.4 percent increase over 2016. "Over the 2015-2020 forecast period, overall public cloud spending will experience a 21.5 percent compound annual growth rate (CAGR) – nearly seven times the rate of overall IT spending growth," says the report. "By 2020, IDC forecasts public cloud spending will reach $203.4 billion worldwide."

Using a different methodology, Gartner forecasts, "The worldwide public cloud services market is projected to grow 18 percent in 2017 to total $246.8 billion, up from $209.2 billion in 2016." Sid Nag, research director at Gartner, adds, "Through 2020, cloud adoption strategies will influence more than 50 percent of IT outsourcing deals."

Gartner Public CLoud Forecast

And the RightScale 2017 State of the Cloud Report found that 89 percent of enterprises are using the public cloud. In fact, the study showed that the public cloud usage is increasing while private cloud is on the wane.

Cloud Services Use

Enterprises are choosing to use the public cloud because it offers several benefits over other types of cloud computing and traditional data centers.

Public Cloud Features and Benefits

In the early days of public cloud computing, enterprises usually cited costs as their number one reason for using the cloud, but that has changed in recent years. Currently, the top reasons for using the public cloud include the following:

  • Agility: The public cloud gives organizations the ability to provision and deploy new computing resources instantaneously. That's a tremendous benefit compared to private clouds or traditional data centers where it can take up to several months for staff to acquire servers and the other infrastructure necessary for a project. In the RightScale survey, "faster access to infrastructure" was the number one benefit of the cloud, experienced by 62 percent of respondents. Another agility-related benefit, "faster time-to-market" came in fourth, experienced by 51 percent of those surveyed.
  • Scalability: Not only does the public cloud allow organizations to deploy resources quickly, it also allows them to scale up their usage as necessary. This can be tremendously beneficial for organizations that experience surges in demand, such as retailers that see dramatic increases in ecommerce transactions near the holidays. It is also useful for companies or projects that are experiencing rapid growth.
  • Availability: Although cloud outages receive a lot of attention in the press, public cloud computing services are generally much more reliable than in-house data centers. The major services all offer service level agreements (SLAs) that include uptime guarantees. In addition, failover and disaster recovery can be easier to set up and manage with public cloud services, and many enterprises choose to use the public cloud as a key part of their disaster recovery or business continuity plans.
  • Performance: With public cloud services, users can easily select the level of performance they need for various workloads. For example, they can choose a slower public cloud storage service for data that needs to be archived and a service with faster response times for hot data that needs to be accessed regularly. Similarly, they can spin up high-performance computing instances for complex workloads that need to be processed quickly or choose to use lower-cost, lower-performance instances for use cases that don't require the same level of performance.
  • Tool Sets: The leading public cloud providers offer a remarkable menu of additional capabilities to their customers. These include everything from artificial intelligence and machine learning to platforms for app development to Big Data applications to security features. Few, if any, private datacenters can match this huge – and quickly growing – tool set. The trend toward an ever growing cloud-based feature set enables the cloud to offer a critical competitive advantage.
  • Financial Benefits: While they may no longer be the primary driver for enterprise use of the public cloud, the financial benefits of the public cloud are significant. First, the public cloud allows organizations to pay only for what they use, eliminating the need for costly over-provisioning. In addition, it allows organizations to eliminate some capital expenses (the upfront costs of infrastructure) and convert them to operating expenses (in the form of subscriptions), which can look good on an organization's financial statements. And because public cloud providers manage such large data centers, they achieve economies of scale that drive down prices to a level most organizations cannot achieve by managing their own infrastructure. Using the public cloud may also allow organizations to reduce their IT management costs.
  • Location Independence: Because users access public cloud services via the Internet, they can access them from nearly anywhere. That allows organizations to enable a more mobile workforce and to connect offices that are geographically dispersed. The top public cloud providers are actively growing their network of data centers around the globe, with an eye toward offering cloud-based extensive services to a worldwide audience.

Public Cloud Challenges

Despite the numerous benefits of the public cloud, challenges remain. From the earliest days of cloud computing, cloud security has been a major concern for enterprises. Organizations have been hesitant to give up control of sensitive information and entrust it to a vendor. And in some industries, compliance requirements mean that using the public cloud for some data is difficult or impossible.

In recent years, however, a growing chorus of experts has been convincing enterprise IT managers that the public cloud may actually offer superior security to in-house data centers. After all, the thinking goes, the major public cloud vendors have many more security professionals on staff than smaller firms do, so they may do a better job of securing their networks.

In fact, in the 2017 RightScale survey, security was tied with lack of resources/expertise and managing cloud spend as the top challenge experienced by respondents, with quarter of those surveyed said that they had experienced each. Other public cloud challenges affecting quite a few organizations included compliance (23 percent), governance/control (23 percent) and managing multiple cloud services (22 percent).

Over time, the perception of cloud security has largely reversed, with many experts claiming the cloud is actually more secure than private data centers.

Public Cloud Vendors

With organizations citing managing multiple cloud services as a key challenge, it should come as no surprise that most organizations now use more than one public cloud vendor. The “multi-cloud” model is now gaining credence as the accepted model for public cloud use. On average, organizations use 3.6 different public cloud services, according to the RightScale survey.

Companies and organizations have many different vendor options to choose from, most of which offer a free trial period or a free pricing tier for some services. Some of the most popular vendors for infrastructure as a service (IaaS) and platform as a service (PaaS) include the following:

  • Amazon Web Services — Also known as AWS, Amazon Web Services is the undisputed leader in the public cloud computing market. Among its best-known services are Elastic Cloud Compute (EC2) and Simple Storage Service (S3), but it has a very complete line of services related to compute, storage, database, migration, networking and content delivery, developer tools, management tools, security, identity, compliance, analytics, artificial intelligence, mobile services, business productivity, desktop and app streaming, the Internet of Things (IoT), application services, messaging and games development.
  • Microsoft Azure — Microsoft's public cloud has grown quickly, and most market researchers place it in second place behind AWS. Azure is particularly popular among enterprises that use Microsoft technology in-house because it makes it easy to adopt a hybrid cloud computing model. Its extensive lineup of services includes compute, networking, storage, Web and mobile, databases, intelligence and analytics, IoT, enterprise integration, security and identity, developer tools and monitoring and management capabilities.
  • IBM Cloud — Like Azure, IBM's public cloud is popular with organizations that already have significant investments in IBM technology. The company offers tools for building and managing private and hybrid clouds, as well as public cloud services. Its best-known public cloud service is its Bluemix PaaS, which offers a wide variety of tools for developers, including Watson cognitive computing services.
  • Google Cloud Platform— Another of the largest public cloud vendors, Google offers a wide array of public cloud services. Some of the best known include the Compute Engine IaaS and the App Engine PaaS. It's also known for its big data and machine learning services, such as BiqQuery and Cloud Machine Learning Engine. Other public cloud services available include storage, database, networking, identity and security, management tools and developer tools.
  • Oracle Cloud — Oracle's lineup of cloud services includes SaaS, PaaS and IaaS offerings. Its IaaS services include compute, storage, network and container services, as well as its Ravello tools for migrating virtual machines directly to the cloud and its bare metal cloud services. Its PaaS services include tools for data management, infrastructure management, security, application development, content, integration and business analytics.
  • Salesforce— A leader in customer relationship management (CRM) software, Salesforce is best known for its SaaS offerings, but it also has a substantial PaaS lineup that includes its App Cloud, Force.com and Heroku Enterprise services. Many of its cloud-based services are geared toward integrating data from its CRM and other SaaS products.
  • Red Hat — Most of Red Hat's cloud tools are focused on setting up and managing private or hybrid clouds, but it also has a PaaS called OpenShift. It features application development, build, deployment, and hosting capabilities with integrated support for containers.

Public Clouds and Hybrid Clouds

Many enterprises integrate their public and private clouds into hybrid clouds. This allows them to keep some data and applications in their own data centers — often for compliance or security reasons — while integrating with the public cloud services they use. This approach has become very popular, and in the RightScale survey, 58 percent of enterprises said that they were pursuing a hybrid cloud strategy for 2017. And Garter predicts that by 2020, "hybrid will be the most common usage of the cloud."

However, building a hybrid cloud can be challenging as organizations need tools and employees with the ability to manage multiple private and public cloud platforms.

Next Steps

Looking for a puiblic cloud solution? Read our cloud comparison guide.

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