Private vs. Public Cloud: When does Choosing Private give you a Cost-Effective Edge?

Cloud computing has become critically important in today’s business and technology landscape due to several key factors that drive innovation, efficiency, and flexibility. 

When migrating to the cloud, one of the first questions that arises is what type of cloud will align with the specific needs and priorities of a business: public, private, hybrid? (If you want to know more about the different types of cloud, check our article about cloud computing)

Why or when to choose Private Cloud over Public Cloud?

Opting for a private cloud over a public cloud can be driven by several key considerations. 


  • Enhanced security and compliance control are paramount, making private clouds preferable for industries with strict regulatory standards.
  • The ability to customize infrastructure and tailor solutions to specific business needs is a major advantage, providing a level of control and cost predictability not always achievable in public cloud environments.
  • Companies with legacy systems may find the gradual transition offered by private clouds more feasible, and the reduction of external dependencies provides more autonomy.
  • For applications requiring low latency, data locality, or specialized workloads, a private cloud’s dedicated resources and customization options make it a compelling choice due to data sovereignty.


It is clear that enterprises value private cloud for reasons beyond cost-effectiveness. However, under the right circumstances, private cloud can also become a major cost saver. And cost efficiency tends to be one of the major reasons for enterprises opting for a private cloud instead of public.


But, how much cheaper can a private cloud really be? And what conditions need to be met in order for a private cloud to render cost-saving benefits to a company?


While private clouds involve upfront costs, they offer more predictable ongoing expenses and a strategic approach to upgrades and maintenance, making them a suitable option for businesses prioritizing control and customization over the scalability and shared resources provided by the public clouds.


Achieving lower Total Cost of Ownership (TCO) compared to public cloud is feasible for a private cloud, as long as specific benchmarks in labor efficiency and resource utilization are met. Some research suggests that private cloud can reach a break-even point with just 400-500 virtual machines per administrator with a 50% utilization rate.


Earlier this year, X (formerly known as Twitter) claimed to have had a stunning 60% reduction in its monthly cloud expenses by relocating a substantial portion of its workload to on-premises infrastructure. At no surprise, many large enterprises prefer private cloud to well-known public options of AWS, Azure or Google.

How can OpenStack and Kubernetes enhance your Private Cloud Experience even further?

Kubernetes and OpenStack, both well-established open source projects, play important roles in orchestrating and automating infrastructure atop of the underlying bare metal hardware. Both platforms facilitate somewhat a mix of IaaS and PaaS functionalities, especially when used together.

Although Kubernetes and OpenStack can be used independently, each one has their own strengths and when combined, they create a powerful synergy that enables companies to build highly scalable, flexible, and efficient cloud infrastructures.

OpenStack is great for constructing IaaS layers for private and public clouds, and a de facto standard for private clouds today. It offers a diverse set of tools and services for the efficient management of cloud resources on a large scale and has powerful infrastructure management capabilities with support of a wide range of hypervisors and hardware.

Kubernetes is a container orchestration platform originating from Google and the de facto tool for managing containerized applications, serving as the unified control plane for data centers and equipped with formidable application management capabilities.

Let’s see how running Kubernetes on top and also under Openstack can change your Private Cloud experience.

Offering Kubernetes as a service on top of Openstack

Building your private cloud on OpenStack provides an ideal IaaS foundation with managed Kubernetes provided as a service on top of it allows the users to containerize and run their applications efficiently.

OpenStack is responsible for managing the virtualization layer, networking, and storage resources, while Kubernetes is responsible for container orchestration of cloud payloads.

In this setup Kubernetes clusters are deployed onto virtual machines provisioned by OpenStack, and the two systems operate independently, each managing its own set of resources.

Offering managed K8s in Kubernetes can be done with the Openstack Magnum project or with other solutions such as Gardener, which is designed to manage hundreds of Kubernetes clusters across multiple cloud providers (not only Openstack). If you want to know more about Gardener, check our article here!

So what are the benefits of combining both OpenStack and Kubernetes in a private cloud setting?

More Flexibility and Scalability
Companies can create containerized applications and orchestrate them on the OpenStack infrastructure with Kubernetes. OpenStack provides infrastructure as a service capabilities, allowing companies to provision and manage virtual machines, load balancers, shared-, block- and object- storage, managed databases and more. Kubernetes, on the other hand, offers container orchestration, allowing companies to deploy and manage containerized applications seamlessly with the state of the art technology.

OpenStack’s flexibility enables easy scaling of cloud resources and adding new hardware based on demand. While Kubernetes scales applications automatically, making it easier to handle varying and mixed workloads.

Resource Optimization
Through the integration of Kubernetes into OpenStack, resources can be automatically scaled to meet the demands of applications. OpenStack helps optimize resource utilization by allowing companies to consolidate their infrastructure, reducing the need for physical servers and minimizing wasted resources. Kubernetes efficiently utilizes resources by packing containers onto the nodes based on their requirements, improving overall resource utilization and reducing costs. It is like double bin-packing for maximum efficiency.

Cost Savings
OpenStack enables companies to avoid vendor lock-in and reduce costs associated with proprietary solutions such as VMware. Especially at the times of massive acquisitions bringing a lot of uncertainties (VMware has been recently acquired by Broadcom for a whopping 69$ billion dollars).

While Kubernetes helps optimize resource usage, reducing the need for overprovisioning. This efficiency can lead to cost savings in terms of hardware, energy, and operational expenses.

Automation and Orchestration
OpenStack offers automation capabilities, allowing automation of IaaS resource provisioning such as VMs, block storage or load balancers, configuration management, and scaling.

Kubernetes automates the deployment, scaling, and management of containerized applications. This automation enhances operational efficiency, reduces manual intervention, and accelerates application development.

Security and Compliance
OpenStack provides features for securing the infrastructure, including network segmentation, isolation, identity and user management. Companies can implement security policies to meet compliance requirements.

Kubernetes offers security features such as support of different container runtimes, role-based access control (RBAC), network and security policies. It is even possible to run highly-sensitive container workloads in individual VMs with Kata containers (Read more about it in our post). All those mechanisms allow a very fine tuning of permissions and high level of platform and application security.

Multi-Tenancy Support
OpenStack supports multi-tenancy with the concept of projects and domains, allowing companies to create separate environments for different departments or teams while efficiently sharing the underlying infrastructure.

Kubernetes enables multi-tenancy through namespaces, allowing different sub-teams or projects to run applications independently within the same Kubernetes cluster.

High Availability and Disaster Recovery
OpenStack supports features like VM live migration and high availability configurations, minimizing downtime and enhancing the overall reliability of the infrastructure.

Kubernetes offers features such as pod replication, self-healing and automatic scaling improving overall application availability. Kubernetes also facilitates the creation of disaster recovery strategies.

Running OpenStack inside Kubernetes in your private cloud

If you are familiar with OpenStack, you would know that OpenStack is anything but easy. It has so many services, then each of those services has many different components and each one of those components can be configured and connected in many different ways.

Another scenario we are about to describe is to run Openstack on top of a single Kubernetes cluster in containers. Such an approach represents an advantage making running OpenStack easier and more manageable, simplifying its maintenance in the future and making use of the self-healing and scaling capabilities of Kubernetes.

In this approach, each OpenStack service is containerized and deployed into Kubernetes running on baremetal. Ceph – a common choice for storage can also be deployed into Kubernetes with the help of k8s operators such as Rook ( making maintenance and management of another complex project easier.

Deploying OpenStack in containers managed by Kubernetes does not sound like an easy task on its own, but luckily there are a few projects that help doing exactly this: openstack-helm (, YAOOK ( and StarlingX (

The benefits of this approach of OpenStack on Kubernetes are becoming more and more obvious as the cloud grows in size. Updating and maintaining a large scale Openstack deployment with hundreds of hypervisors is something that you want to do in a fully-automated and safe way. Kubernetes becomes very handy with its capabilities of self-healing, rolling updates, rollbacks and flexible scheduling. Complex containerized applications are easier to handle with K8s and OpenStack is no exception here.

Kubernetes on Openstack on Kubernetes?

That’s right, Kubernetes on top of and under Openstack at the same time!
It is possible to offer managed Kubernetes on top of OpenStack, and run OpenStack itself inside Kubernetes cluster “under”. This is a combination of the two approaches described above.

The setup is as follows:

  1. Kubernetes Layer:
    The lowest layer where you run a Kubernetes cluster to manage OpenStack. This one is typically deployed on baremetal.

  2. OpenStack Layer:
    The layer on Kubernetes where OpenStack components are deployed including database and message bus. OpenStack manages the virtualization, networking, and storage resources offered in the cloud.

  3. VMs, Networks, Storage:
    OpenStack manages the virtual machines, networks, and storage resources that are used by the managed Kubernetes clusters created “on top”, inside OpenStack tenant projects. Here, k8s clusters can be provisioned with Magnum or Gardener as mentioned earlier.

This 3-layer setup introduces some complexity to the mix. Each layer adds its own set of technologies and ops works. So let’s take an objective look at some of the benefits and disadvantages of such a setup.

Resource Pooling and Utilization:
Double orchestration can lead to highly efficient resource utilization. OpenStack manages the underlying virtual infrastructure, while Kubernetes manages containers within those VMs allowing double bin-packing.

Flexibility in Infrastructure Choices:
Private cloud environments often offer flexibility in choosing hypervisors, storage solutions, and networking configurations. This flexibility extends to both Kubernetes and OpenStack layers. This makes it possible to tailor the infrastructure to your specific needs.

Private clouds can often be scaled horizontally to accommodate increased demand, making it easier to scale both Kubernetes and OpenStack resources.

Some of the disadvantages of this setup are, as mentioned before, the added layer of complexity in terms of configuration, maintenance, and troubleshooting. A deep expertise in both Kubernetes and Openstack is a must!

The synergy between these two technologies offers the ultimate way of leveraging resources in the cloud and managing them with high efficiency. However, it is important to evaluate your specific use case, scale and team expertise before opting for this layered private cloud setup. At a large scale the savings can be in the range of millions per year compared to public cloud. Where at a very small scale the cost of additional ops and hardware might actually be higher than simply running workloads in one of the public clouds.


In conclusion, the combination of OpenStack and Kubernetes isn’t just a tech upgrade; it’s a strategic move often dictated by economic efficiency at a large scale. From optimizing resource usage to liberating yourself from vendor locks, this open source dynamic duo is empowering leading enterprises to run efficiently and economically.

It’s important to note that the decision between private and public clouds should be based on a careful assessment of specific business requirements, workloads, and budget considerations. In some cases, a hybrid cloud approach that combines elements of both private and public clouds may offer an optimal solution, providing flexibility and scalability while addressing specific business requirements and corner cases.


It’s also important to take into consideration that while there are advantages, the complexity of managing both OpenStack and Kubernetes should be considered. Proper planning, integration, and understanding of both technologies are essential for a successful deployment and operations.


Whether you’re a tech maven or a budget-conscious decision-maker, consider the magic of OpenStack and Kubernetes for your private cloud. It’s not just about running applications; it’s about running a scalable, cost-effective, and future-proof infrastructure.


Cloudification team is here to help you achieve huge savings for your business either by implementing private cloud or by optimizing existing public cloud setup! Give us a call today!