For all the agencies across the federal government, IT modernization is more than a goal. It is an imperative. For the past decade, the focus of IT modernization has centered around public cloud. Now, with agencies looking to be cost-effective while optimizing for emerging technologies like AI, they are reassessing how they view cloud: Rather than a destination, cloud is an operating model, with public cloud being one such model – but there is an alternative. Selecting the right cloud model is a critical choice agencies face as they move forward with IT modernization in the most cost-effective way.
Challenges of Public Cloud
Today, most federal agencies are customers of one or more public cloud providers. This situation alone is cause for many challenges as these agencies rely on multiple public cloud providers for different sets of resources. This movement gained momentum during the Covid pandemic. Today though, surveys of private and public sector organizations suggest that the challenges inherent to this piecemeal approach have grown too large to ignore. An in-depth global survey of 1,800 senior IT leaders conducted by Illuminas, in partnership with Broadcom, the Private Cloud Outlook 2025, reveals that 73%of all organizations are considering repatriation of workloads from public cloud to private cloud, with 45% having already repatriated some workloads. These organizations are reconsidering their approach due to what Broadcom President and CEO, Hock Tan, calls the “Three ‘C’s of public cloud”: cost, complexity, and compliance. The Private Cloud Outlook 2025 makes explicit what these challenges represent:
- Out-of-control costs: A majority of organizations report not having control of public cloud costs. Nearly half of organizations (49%) surveyed believe more than a quarter of their public cloud spend is wasted, meaning the spend provides no business value, and 31% think that waste exceeds 50% of their total public cloud spend.
- Complexity: The survey finds that a majority of organizations agree that organizational silos complicate public cloud management, making it difficult to maintain visibility, control, and governance in the public cloud, with 76% reporting that the public cloud is creating new non-core IT silos.
- Compliance: The global and shared nature of public cloud services creates significant concerns about the ability to manage compliance for data stored in public clouds, with 66% of respondents reporting being “very” or “extremely” concerned with storing data in public cloud environments.
The Benefits of Private Cloud
Private cloud offers the ideal operating model for federal IT modernization. It confronts the “three ‘C’s” of public cloud, adding tremendous operational flexibility while lowering costs, reducing complexity, and simplifying compliance issues.
Private cloud is built on a software-defined, virtualized infrastructure that gives it the flexibility to extend various cloud models and services across the enterprise. This same flexibility allows private cloud to offer compute, storage, and networking support in a flexible way so that federal agencies can use resources across multiple clouds, including public cloud, while managing them with their own internal tools and resources with which they are already familiar. A private cloud platform provides the benefit of being consistently delivered across on-premises, public clouds, and distributed edge locations—bringing the cloud and AI to wherever an agency needs to process data.
These and other capabilities allow federal agencies to lower costs and reduce security risks. A recent analyst insights report concluded that a private cloud built on the VMware Cloud Foundation platform can deliver more than 50% hybrid cloud efficiencies, a 42% lower cost of operations over three years, a 10-month payback on investment, and a 564% return on investment (ROI) over three years.
Private cloud gives federal agencies the same ease and control on the user side, providing the same manageability, control, and security for IT administrators. For both the operators and end users internally, it will look, operate, and perform just like a leading public cloud. And in some cases, there are dramatic performance advantages with private cloud, such as superior latency, predictability, and ease-of-use for particular use cases like AI. A real private cloud is not just promising commercial parity with public cloud, it delivers it.
Private cloud also offers data security and privacy advantages over public cloud. Public cloud migrates sensitive data beyond a government agency’s control to computing resources and applications shared with and accessed by other entities. But private cloud brings the agency’s own computing resources and applications to the agency’s data, within its own controlled environment, where no other entity has access. This control allows agencies to maintain security and privacy policies, customizations, and advanced features to better ensure security and compliance.
Cloud is Not a Destination
In any public to private cloud comparison, it’s clear that private cloud is the better model for federal agencies that need to advance modernization objectives, prioritize costs, and ensure the privacy and security of their data. Private cloud can do all of these things because, unlike a public cloud native model, private cloud gives agency CIOs the choice to use the platform model that works best for them, whether it’s on-prem, public or hybrid cloud.
Private cloud represents a return to federal agencies supporting their own workforces and mission with their own resources, under their own management and control, while enjoying the very best-of-breed of cloud computing. It’s also a return to the original definition of cloud computing itself: an operational model for running your enterprise.
Private cloud offers federal agencies the best of all possible worlds: All the benefits of public cloud with the added advantages of private cloud. For federal agencies, it’s clear which cloud model works best: The future of federal IT modernization is private.
Learn more from the Private Cloud Outlook 2025 report