Q: Why would an SMB, with its relatively limited resources and more basic needs, want to build its own private cloud, rather than simply use a public cloud?
A: The most significant reason is that SMBs can now get private clouds in a box from major vendors such as HP and Microsoft. These private cloud solutions feature well-integrated engineering and yet are also scalable and flexible. As a result, SMBs can experience many of the benefits typical of public clouds via these private cloud solutions, while retaining security and control. These are simply the better option for most SMBs.
Although the public cloud might be a cheaper option, the private cloud has been dropping in recent years. For firms that have the money on hand, it is far cheaper to either build a private cloud or obtain an out-of-the-box offering, rather than continue spending out of pocket on public cloud options. For startups that lack sufficient operating capital, begin with the public cloud and then transition to the private cloud once your coffers are less empty.
The private cloud is more stable and reliable than the public cloud, and is really an essential resource for firms of a certain level of complexity and size. Enterprises are generally more interested in reducing their labor. The private cloud serves this purpose by allowing their personnel to perform necessary functions on their own, rather than relying on third parties. For SMBs, this is not really an issue - what is more relevant is the fact that the private cloud makes these operations simpler, thanks to its automated features.
Smaller firms can actually outsource the management of their private cloud. This is particularly true if the private cloud is based in a co-location facility.
Companies can also upgrade out-of-the-box private cloud solutions simply by swapping out racks whenever an improved offering appears on the market. Such improvements are regularly performed at co-location facilities, and can provide major cost-savings for firms as they improve their cloud operations.