Will CDP Buyers Consider Private Clouds as On-Premise Deployment?

Most Customer Data Platforms are Software as a Service products, meaning they run on servers managed by the vendor. But some clients prefer to keep their data in-house. So before releasing the CDP Vendor Comparison report – now available here – I added a line for on-premises deployment.

This seemed like a perfect fit: a clear yes/no item that some buyers consider essential. But it turned out to raise several issues:

- on-premises vs on-premise. I originally used “on-premise”, which is how the term is typically rendered. One of the commenters noted this is a common error. A bit of research showed it’s been a topic of discussion but on-premise is now more widely used relating to computer systems.  On-premises actually sounds a bit pedantic to me, but I’m using it to avoid annoying people who care. (Interestingly, no one seems too concerned about whether to use the hyphen. I guess even grammar geeks pick their battles.)

- private clouds. Several vendors argued that on-premises is an old-fashioned concept that’s largely been replaced by private clouds as a solution for companies that want to retain direct control over their systems and data. This resonated: I recalled seeing this survey from 451 Research showing that conventional on-premises [they actually used “on-premise”] deployments now account for just one-quarter of enterprise applications and the share is shrinking.

Percentage of Applications by Venue:
24% Conventional (on-premise, non-cloud)
18% on-premise private cloud
15% hosted private cloud
14% public cloud
13% off-premise non-cloud
Source: 451 Research, Strategy Briefing: Success Factors for Managing Hybrid IT, 2017

My initial interpretation of this was the on-premises private clouds meet the same goals as conventional on-premises deployments, in the sense of giving the company’s IT department complete control. But in discussions with CDP vendors, it turned out that they weren’t necessarily differentiating between on-premises private clouds and off-premise private clouds, which might be running on private servers (think: Rackspace) or as “virtual private servers” on public clouds (think: Amazon Web Services). Clearly there are different degrees of control involved in each of these and companies that want an on-premises solution probably have their limits on how far they’ll go in the private cloud direction.

- public clouds. One vendor speculated that most remaining conventional deployments are old systems that can’t be migrated to the cloud. The implication was that buyers who could run a CDP in the cloud would gladly do this instead of insisting on an on-premises configuration. This survey from Denodo suggested otherwise: while it found that 77% of respondents were using a public cloud and 50% were using a virtual private cloud, it also found that 68% are NOT storing “sensitive data” in the public cloud. Presumably the customer data in a CDP qualifies as sensitive. I don't know whether the respondents would consider a “virtual private cloud” as part of the public cloud.  But I think it’s reasonable to assume that a considerable number of buyers reject external servers of any sort as an option for CDP deployment, and that “on-premises” (including on-premises private clouds) is a reasonable term to describe their preferred configuration.