Private cloud transformation equals supplier renewal.

The cloud may be new and disruptive, but its technical and business complexities are driving Fortune 500 CIOs into the arms of familiar vendors.

In recent in-depth interviews with IT executives across key industries, Edge Strategies found significant uncertainty about which vision of the Cloud will deliver the required business value.  Their solution is to rely on large suppliers, who provide enterprise-level professional services, cross-domain management and implementation capabilities.

CIOs cite cost reduction/avoidance and computing investment utilization as key drivers.  The early stages of private cloud solutions deliver these benefits through virtualization and automation, but the business value is less clear when choosing an enterprise cloud model.  Is creating a robust private cloud the best investment, or will a managed service provider offer superior ROI?  Are there commodity services that the organization can safely acquire from public cloud providers?

Most CIOs are addressing these questions in one of two ways:

• Strategically- Which IT model best fits the organization: public, private or hybrid? In other words, is IT a utility, a secure bastion within a commodity environment, or totally sacrosanct within its own private infrastructure.
• Tactically – Which applications benefit from which cloud models?  How should the organization identify and migrate them?  What about data security and information management?

These questions, among others, lead CIOs into renewed dialogue with traditional large suppliers, who are expected to have answers based on direct experience similar problems across the industry.

Although the questions are clear, there is no single, ultimate answer.   Effective use of the Private Cloud remains a joint journey that requires a new level of trust and collaboration between supplier and buyer.