Why do you need a private cloud? What could possibly induce you to go to the time and expense of transforming a big chunk of your data center into an environment resembling that of a cloud service provider?
Well, for one thing, you're probably partway there already. According to most surveys, roughly half of the x86 servers operated by enterprises have been virtualized -- and virtualization is the key foundational element of the private cloud.
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But as Matt Prigge observes in his excellent post, "How I learned to stop worrying and love the private cloud," virtualization itself creates a crying need for the chargeback, security, resource allocation, and quality-of-service features of the private cloud. And OpenStack, among other solutions -- notably Eucalyptus, a private cloud platform compatible with Amazon Web Services APIs -- provides the necessary bundle of software to do all that.
In the old IT infrastructure model, physical servers and storage were spec'd and dedicated to specific applications and stakeholders. It was easy to determine what belonged to whom. In a virtualized infrastructure, everything is shared, so you need a way to automatically spec virtual resources, charge back their costs, and secure their workloads. Along the way, the private cloud enables you to create Web portals that business units can use to provision their own resources without pestering IT.